Ben Bernanke's Fed Tries To Reinvent Itself As A Pro-Consumer Watchdog

Reported by Business Insider on Monday, 16 November 2009 (on November 16, 2009)

It looks as though Ben Bernanke knows the wirting is on the wall for the Fed, and he's trying to fight it. Few outside the administration are eager to see the Fed get expanded powers.
The ideas brewing in congress all envision some kind of consumer-based regulatory agency keep an eye on the banking industry -- traditionally the Fed's perview.
So it seems as though the agency is trying to head off the momenum, and become a consumer agency in its own right. Last week it finally made some noises about overdraft fees.
And today the Fed has announced rules on... gift cards! Just in time for the holidays, too.
The Federal Reserve Board on Monday announced proposed rules that would restrict the fees and expiration dates that may apply to gift cards. The rules would protect consumers from certain unexpected costs and would require that gift card terms and conditions be clearly stated.
The proposed rules would prohibit dormancy, inactivity, and service fees on gift cards unless: (1) there has been at least one year of inactivity on the certificate or card; (2) no more than one such fee is charged per month; and (3) the consumer is given clear and conspicuous disclosures about the fees. Expiration dates for funds underlying gift cards must be at least five years after the date of issuance, or five years after the date when funds were last loaded.
The Board's proposed rules generally cover retail gift cards, which can be used to buy goods or services at a single merchant or affiliated group of merchants, and network-branded gift cards, which are redeemable at any merchant that accepts the card brand.
The proposed rules are issued under Regulation E (Electronic Fund Transfers) to implement the gift card provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009.
The Board's notice is attached. Comments on the proposal must be submitted within 30 days after publication in the Federal Register, which is expected shortly.Join the conversation about this story �See Also:The Fed Blocks Nasty ATM, Debit Overdraft FeesConsumer Financial Protection Remains A Top PriorityWhy Community Bankers Oppose The CFPA

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