Tuesday, August 17, 2010


The Credit Card Accountability Responsibility and Disclosure Act of 2009 (that’s right, no commas in there) included a 1,118-word provision on gift certificates, store gift cards and general-use prepaid cards. The section prohibits dormancy fees, inactivity charges and service fees unless:

(1) the consumer hasn’t used the card in the past year;
(2) specified disclosures have been given;
(3) not more than one fee is charged in any given month; and
(4) any additional requirements set by the Federal Reserve Board have been satisfied.

The section also prohibits expiration dates, unless the date is at least 5 years after issuance and the terms of expiration are clearly disclosed.

The Act gave the Fed until February 22, 2010 to finalize regulations, and specified an effective date of August 22, 2010.

The Federal Register on April 1, 2010 (Happy Fool’s Day!) included the Fed’s final regulations, about a month late – except they weren’t really final because the Federal Register for this morning, August 17, 2010, amended those final regulations, all of these effective five days from now, on August 22, 2010. Let's be fair to the Fed. In the meantime, Congress had changed the rules for applying the August 22 effective date (in a statute the President signed on July 27).

Guess how many words are in the regulations?

11,684, ten times the number in the statute. That is, 3 pages in the Act, 21 pages in the regulations.

“What on earth took nearly 12 thousand words to say?” asks Virginia.

Let’s see:

-- About 6,250 words to define 4 types of gift cards and exclusions.
-- About 1,550 words to describe the required disclosures.
-- About 1,375 words to address the prohibition on fees.
-- About 1,680 words to explain a limited prohibition on expiration dates.
-- About 810 words to tell when the regulations take effect.

“I think I know where you’re headed,” Virginia reads my mind. “How many words are in the financial reform bill?”

“I’ve estimated 340,000,” I say.

“So you only have 3,400,000 words left to analyze, interpret and explain,” she says.

At least 6,110 pages. Sigh.

“Brighten up,” she says. “It’s lifetime employment.”

Hey, my life’s going to continue longer than that, if I have anything to say about it.

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