In order to protect the rights of consumers, credit card companies must abide by rules and regulations set by several governing bodies. Those bodies include the Federal Trade Commission, the Federal Reserve Board and the National Credit Union Administration.
The Federal Trade Commission
As an independent agency of the federal government, the Federal Trade Commission (FTC) is considered to be the nation’s consumer protection agency. On its website, the agency touts itself as being able to help prevent fraudulent, deceptive and unfair business practices in the marketplace. It also notes that it provides information to help consumers spot, stop and avoid these practices. All of these responsibilities tie directly into governing credit card companies.
The FTC makes sure that credit card companies follow the dozens of rules that are in place to protect consumers. For example, credit card companies must send you a statement outlining these rules when you open an account, and then, at least once a year while your account is open. Failing to do so could land a credit card company in violation of the law and subject to the penalties of the FTC.
The Federal Reserve Board
This board oversees the Federal Reserve System, which is the country’s central banking system. It issues notices that amend or clarify laws passed by Congress and signed into law by the President. And when it comes to credit card companies, the federal reserve board has been active in continuing to make sure that the fees credit card companies charge cardholders are fair.
For example, in 2009, President Barack Obama signed into law the Credit Card Accountability Responsibility Disclosure Act. After it was signed into law, the Federal Reserve released several notices to clarify some of the language of the new legislation. That included provisions regarding fees credit card companies could charge its customers.
The Federal Reserve also conducts periodic surveys of the credit card industry to determine what areas should be addressed. In one of its surveys in 2011, it found that credit card companies were willing to loosen some of their credit restrictions to allow more consumers the chance to qualify.
Treasury Office of the Thrift
The Treasury's Office of the Thrift is charged with overseeing the nation's thrift industry, which basically helps people obtain affordable home loans. However, another duty adds another layer of protection for credit cardholders, which makes the agency another key component of credit card governing. In recent years, it has implemented policies intended to help consumers make informed decisions about the use of credit card accounts. For example, it makes thrift businesses that issue credit cards disclose the annual percentage rate when the account is opened, and that card issuer can't increase that rate arbitrarily.
National Credit Union Association
Although the National Credit Union Association is primarily charged with overseeing credit unions, it has played a substantial role in the oversight of the credit card industry as well. In 2011, it went along with the Federal Reserve and the Treasury Department’s Office of the Thrift in agreeing with regulations that add another layer of protection for credit card users. Specifically, the new regulations restrict credit card companies’ ability to raise rates and by forcing them to give credit card holders reasonable time to pay their balances.