WASHINGTON – Federal credit unions and other credit card issuers would be banned from charging interest on repaid debt and not providing adequate notice on when payments are due, under regulations approved today by the NCUA and two other regulatory agencies.

Credit card issuers must apply payments to the highest outstanding balance if a cardholder had more than one balance. Credit card issuers can't increase the rate within the first year unless it was disclosed when the customer received the credit card unless the consumer makes a late payment. A credit union must give 45-day notice of any subsequent rate increases.

On subprime credit cards-those aimed at people with low credit scores–card issuers can't assesses fees totaling more than 50% of the credit limit during the first year.

The rules, which were issued by NCUA, the Federal Reserve and the Office of Thrift Supervision, take effect in 2010. They don't apply to state-chartered credit unions which are regulated by the Federal Trade Commission.

The agencies received a great deal of comment from credit unions and other financial institutions about proposed rules regulating overdrafts and decided to postpone consideration of that. A source of concern was a proposal to require debit card holders to opt out of overdraft protection and require the card issuer to inform the consumer that they have that option.

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