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MBNA told again to stop charging interest on credit card fees

ARLINGTON, Va. - MBNA, a major credit card issuer and purchaser of credit union card portfolios has been told again to stop charging interest on the fees it charges its credit card account holders. In a July 2 ruling, according to the American Banker, the U.S. Court of Appeals for...

By Staff Writer | Updated on July 16, 2002

ARLINGTON, Va. – MBNA, a major credit card issuer and purchaser of credit union card portfolios has been told again to stop charging interest on the fees it charges its credit card account holders. In a July 2 ruling, according to the American Banker, the U.S. Court of Appeals for the Sixth Circuit reaffirmed a lower court decision that held that the company could not charge interest on its $29 over-the-limit fee. The source of the confusion had been conflicting regulations between the Truth in Lending Act and the Federal Reserve’s Regulation Z. Regulation Z specifically excluded fees from interest charges while the Truth in Lending Act did not. The ruling held that the statutes should be interpreted in a way that was most beneficial to consumers, the paper reported.

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