Canadian Finance Minister Jim Flaherty on Thursday unveiled a set of new regulations for the credit card industry, including a minimum 21-day interest-free period on all new transactions.

At a press conference in Toronto, Flaherty announced nine new proposed regulations designed to make the industry more transparent and fairer to consumers. But the bill will have to be passed by the parliament before becoming law.

The main change would be the mandated minimum 21-day interest-free grace period on all new transactions when consumers pay their balance in full by the due date. Currently, there is no mandatory grace period.

The new regulations would also require card issuers to clearly display information about grace periods and interest rates in a summary box on bills.

In addition, the regulations would require bills to give a clear indication of how long it would take people to pay off their balances in full if they only made the minimum payments every month.

Card issuers would be required to give advance notice if interest rates were going to increase during the next payment period, and consumers would be informed in advance if a rate was set to expire or if a penalty for missed payments was to be imposed.

Card issuers would also be forbidden from increasing credit limits without expressed written consent of cardholders.

The regulations will also prohibit over-the-limit fees solely arising from holds placed by merchants, and limit debt collection practices that financial institutions use in contacting a consumerto collect on a debt. Financial institutions would no longer be allowed to contact customers outside specific hours on weekdays and weekends, for example, Flaherty said.

But the opposition parties and some people have criticized the government for not imposing a firm limit on the interest rates credit card companies charge on consumers.

"[This government] believes in consumer choice. We are not interested, like some parties, in nationalizing banks," Flaherty said. "If someone wants a lower interest rate on a card, then they have choices and they can do that."

(Xinhua News Agency May 22, 2009)