CREDIT CARDS: Crackdown coming

  WASHINGTON _ The Federal Reserve and other regulators are moving Friday to crack down on ``unfair and deceptive'' practices in the credit card industry that have added billions in debt to people already struggling to cope with the economic downturn.

    In the most far-reaching crackdown on the credit industry in decades, the Fed and two government agencies are proposing rules that would stop credit card companies from unfairly raising interest rates and make sure they give people enough time to pay
their bills.

    Travis Plunkett, legislative director for the Consumer Federation of America, said that while he hadn't yet seen the details, the rules ``appear to address some of the most significant abuses in the credit card marketplace right now.''

    Rep. Carolyn Maloney, D-N.Y., who has introduced legislation to protect consumers from credit card abuse, said in a statement that she was pleased the Fed had adopted some aspects of her legislation.

    But she also expressed concern that ``by the time the Fed gets around to finalizing these credit card reform proposals, they will be watered down and come too little too late for consumers who need relief now.''

    The Fed has been criticized for moving too slowly to respond to abuses leading to the subprime mortgage crisis.

    The agencies said the new regulations could be finalized by the end of the year.

    Plunkett said his group estimates that credit card debt is now about $850 billion, with households that don't pay their credit card bills in full every month owing an average $17,000.

    The proposed new rules that would prohibit:
    _Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay;

    _Unfairly allocating payments among balances with different interest rates;   

 _ Unfairly raising annual percentage rates on outstanding balances;

    _Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account;

   _Unfairly computing balances;

    _Unfairly adding security deposits and fees for issuing credit or making credit available;

   _Making deceptive offers of credit.

    In news releases, the agencies said the proposed rules also would require federal credit unions to give consumers a chance to opt out of an overdraft protection program. And they would prohibit those institutions from charging a fee for an overdraft caused by a hold placed on consumer's funds when a person uses a debit card.

    The Fed, which is expected to vote Friday afternoon on its approval of the proposed rules, is acting in conjunction with the National Credit Union Administration and the Office of Thrift Supervision.

    The banking industry was expected to fight the new rules.