Washington (CNN) - The Federal Reserve is stepping up its effort to protect consumers' credit. The latest move? Today it proposed new rules for limiting fees and extending the expiration date for many gift cards. Under the new rules a gift card could not expire in less than five years. And the issuer couldn't charge more than one fee a month if you don't use the card – and that would apply only if you hadn't used the gift card for a year. "The rules would protect consumers from certain unexpected costs and would require that gift card terms and conditions be clearly stated," the Federal Reserve said in a statement announcing the move.
Don't get too excited – this rule wouldn't go into effect until the middle of next year, and companies have 30 days to submit their comments and try to alter the rule. Bottom line: it won't apply to this year's holiday purchases.
This latest announcement comes as the Fed squares off with senators considering legislation that would effectively strip the Fed of its consumer protection role. Instead, the new legislation would hand that power to a new Consumer Financial Protection Agency whose mission would be overseeing credit cards, mortgages and other financial products marketed to the public. Last week, the Fed proposed restricting overdraft fees on ATM cards - part of an apparent public relations effort to demonstrate its commitment to beefing up its role as a defender of the consumer against bank abuses.
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