Without a deep dive into Reg Z, the Schumer Box, or anything official, here’s a Consumer Reports summary of the changes to credit card rules passed by Congress in the last two days.
The President has demanded this action, and he’s promised to sign it, making the changes effective in 2010. The bill doesn’t threaten interchange income as some had feared, but it keeps the issue live by commissioning a study on interchange income from the Government Accountability Office.
Of particular relevance to credit unions looking for younger members is the proposed requirement that borrowers younger than 21 either have a co-signer or verify their income before they can open a card. We’ve been suggesting (here and here) that credit unions market first credit cards as a way to reach late teens and young twentysomethings when they’re much more interested in spending than in saving.
This legislation provides an opportunity for a socially responsible lender like a credit union to tout “responsible” credit cards, and market the first credit card simultaneously to young members and (more importantly) their parents.
(It also could be a good time in general to grab market share as big issuers offer doomsday predictions.)
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