It has been reported that the U. S. Federal Reserve's governing board has approved new credit card rules limiting late fees and mandating a review of recent interest rate changes.

Federal Reserve Governor Elizabeth A. Duke said in a statement, "The new rules require that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers."

The Fed also said that the rules include a cap on late fees that is limited to the size of the late payment. For example, a fee cannot exceed $20 for a late payment on a bill with a minimum due amount of $20. Late fees or other penalties, also cannot exceed $25 unless costs to the card issuer exceed $25 or the card holder is a repeat offender.

The rules also prohibit fees for leaving a credit card account dormant or unused for a length of time.

The rules, in addition, include a ban on repeated fees for the same violation of the credit card terms.

The Fed further said that the rules are the third stage of the Fed's obligations for compliance with the Credit Card Accountability Responsibility and Disclosure Act of 2009 and go into effect Aug. 22. (With Inputs from Agencies)