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Finance Minister Jim Flaherty tried to cement his image as a consumer advocate yesterday by launching new disclosure rules to protect credit-card users, but his resistance to interest rate controls drew fire from the opposition.

The new measures are designed to provide cardholders with clearer information about the cost of their plastic.

Card issuers will have to tell customers in advance about interest rate increases, for example, and they will have to spell out how long it will take a cardholder to clear off a balance by making only minimum monthly payments.

One measure that will cost the banks a substantial amount of money - "tens of millions of dollars," according to Mr. Flaherty - is an enforced 21-day grace period on new purchases. That means banks will not be able to charge interest on recent purchases, even if the cardholder has a balance carried over from a previous month.

The package is part of an "aggressive agenda to protect consumers of financial products," Mr. Flaherty declared at a press conference in Toronto.

A source in the Finance Department said Mr. Flaherty is keen to cultivate the image of a populist who is on the side of consumers. In the past he has chided banks about the fees charged for automated bank machine transactions; he also urged retailers to drop their prices when the Canadian dollar soared to record levels against its U.S. counterpart.

"The minister sees part of his job as making sure that banks and financial institutions act fairly when they go out and do business," the source said.

Mr. Flaherty's concern about credit cards arose last fall when he became aware of high interest charges on some accounts where minimum payments weren't made. As he investigated, he realized that some banks had failed to fulfill a pledge made to Ottawa to give a 21-day interest-free grace period on new purchases. He discovered that the Finance Department had no power to regulate credit cards and felt this needed to be remedied. So he made the change in the 2009 budget.

Opposition politicians insisted yesterday that the new rules were a capitulation to the banks. "The banks won and the consumers and the middle class lost," NDP Leader Jack Layton said. "Rates of interest have not been brought down."

He argued that banks should be forced to offer low-interest credit cards at prime plus 5 per cent. The new disclosure rules will merely let consumers know "how much they are being gouged," Mr. Layton said.

Mr. Flaherty contends there are enough cards with low interest rates available for those who want them. "There are dozens and dozens of options for consumers," he said.

The Liberals criticized the new rules for ignoring the issue of the "interchange fees" that are charged to merchants for credit-card transactions. Liberal consumer critic Dan McTeague said those fees are putting "extraordinary pressure" on retailers.

Mr. Flaherty said he is watching the interchange fee issue closely, as is a parliamentary committee and the Competition Bureau.

The banks are also unhappy, because they think Ottawa went too far. "The [rules]are so far-reaching and so substantive, they are going to have a huge impact on banks," said Nancy Hughes Anthony, head of the Canadian Bankers Association.

She said banks will need to create a personalized analysis for each customer to disclose how long it will take to pay off debt based on a minimum monthly payment. "Just to do that is a logistical nightmare," she said.

Ms. Hughes Anthony also suggested that Mr. Flaherty might ultimately hurt the flow of credit to Canadians. "Our concern is that these regulations are very burdensome and that they are going to have an impact - potentially unintended consequences - on the choices or availability of credit."

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