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Hampel addresses card issues on Bloomberg TV
WASHINGTON (12/19/08)--As federal financial regulators were voting
Click for member-only video CUNA Economist Bill Hampel on Bloomberg TV Thursday. Click for member-only video. (Photo provided by CUNA)
to ban certain unfair and deceptive credit card practices, Bloomberg TV interviewed Credit Union National Association (CUNA) Chief Economist about what it all means for the industry and consumers. Noting that the regulators’ new rules--beginning July 1, 2010—would ban such practices as double-cycle billing and universal default, thereby reducing revenue for some card issuers, Hampel said they may have to return to making money from credit cards “the old fashioned way,” by charging annuals fees and regular interest rates. However, he added, it might not be such a bad thing for consumers if everyone pays a little more for credit card services , rather than profitability being sustained by very high rates and fees paid by just a few card holders. When asked how the new rules might affect credit unions, Hampel said there will be very little effect because credit unions mostly don't engage in the practices that the new rules will prohibit because of a fundamental difference between credit unions and other types of financial institutions. Explained Hampel with a grin, “At credit unions, our members are our owners, so we kinda like to be nice to them.” For more information on new credit cards rule, see “NCUA bans 5 unfair card practices” in today’s edition of News Now.
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