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Implementing tougher new credit card disclosure rules more quickly could help consumers but could also lead to unintended consequences and bank compliance problems, Federal Reserve Chairman Ben Bernanke said on Wednesday.

Bernanke, in a letter to U.S. Rep. Spencer Bachus, said proposed legislation to accelerate the effective date for the Credit Card Accountability Responsibility and Disclosure Act of 2009 to December 1 would force the Fed to implement provisions of the act without adequate public comment.

Moving the date up “could benefit consumers by providing important protections earlier than scheduled (including protections against applying increased rates to existing credit card balances),” Bernanke wrote in response to questions from Bachus. Bachus, of Alabama, is the ranking Republican on the House of Representatives Financial Services Committee.

“However, it would also require the Board to implement the remainder of the act without providing the public with advance notice and the opportunity to comment, which could lead to unintended consequences,” Bernanke wrote no fax payday loan.

Bernanke also said that some financial institutions, particularly smaller institutions, may have difficulty adjusting their systems and business models to implement the rules more quickly.

“Board staff understands that many small institutions (such as community banks and credit unions) rely heavily on third-party vendors to adjust their systems and that these vendors are currently overwhelmed by the demand from all the institutions they service,” he wrote.

The Fed chairman said card issuers “must be afforded sufficient time for implementation to allow for an orderly transition and to avoid unintended consequences, compliance difficulties and potential liabilities.”

(Reporting by David Lawder; Editing by Padraic Cassidy)

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