WASHINGTON (1/26/10)--A Federal Reserve representative recently informed the Credit Union National Association (CUNA) that the Fed is formulating its thoughts on recently introduced variable rate credit restrictions, and expects to provide CUNA with further guidance by the end of this week. Under provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act), which will be effective as of Feb. 22, card issuers will only be able to raise their credit card rates under specific circumstances. One of these is when there is a variable rate and the increase is based on a change in a publicly-available index that is not under the card issuer's control. However, the Fed indicated that the ability to raise rates under these circumstances will not apply if the issuer imposes a floor that will not permit the rate to decrease at all times in a manner consistent with reductions in the index. Credit unions that use floors for their variable rate cards have expressed significant concerns as to impact of these new provisions and that the public did not have an opportunity to comment on this new restriction during the rulemaking process. CUNA and representatives from leagues and credit unions discussed this issue in a conference call with Fed officials held last week. Fed staff and CUNA will also address this issue and other provisions of the final rule, via an audio conference call on Feb. 2nd at 2 pm ET.