New credit card rules take effect

MADISON (WPR) Under new federal credit card rules effective Monday (2/22), banks must now comply with fee restrictions, and other regulations.  Also, companies can't actively recruit customers on college campuses.  They’re barred from coming to a college and handing out free t-shirts or other swag to students who sign up.

An advocacy group applauds the rules, but is also pushing for more oversight.   Bruce Speight of the Wisconsin Public Interest Research Group (WISPIRG), says students are lured in with these free gifts and gimmicks, then get mired in credit card debt on top of the debt they incur from paying for college.

Now the rules say anyone under the age of 21 must either prove they have the means to pay back a balance, or have a co-signor.  Banks must also give 40 days notice before raising interest rates.

WISPIRG is pushing for more oversight in the form of a Consumer Financial Protection Agency.  Speight says it would regulate risky financial products similar to how the Consumer Product Safety Commission re-calls faulty things like toasters or kids toys.

The U.S. House of Representatives included such an agency in a banking reform package.  It still needs approval from the Senate. 

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Information from Wisconsin Public Radio, www.wpr.org