Restrictions on how credit card issuers manage their customers' over-limit spending and make offers of credit limit increases are now law, following the passage this week of the National Consumer Credit Protection Amendment (Home Loans and Credit Cards) Bill 2011.The new law also regulates the application of payments, so a payment must be applied against that part of the outstanding balance on which the cardholder is being charged the highest rate of interest. Standard industry practice has been for payments to be applied to any low rate parts of the balance first.The law also introduces a requirement that lenders must provide a key facts statement with credit card contracts that sets out pricing and other information in a standardised format so consumers can compare products.The credit card changes will apply from July next year.The most controversial part of the amendment deals with over-limit spending. The original bill featured a complicated arrangement of mandatory default buffers. These measures have been simplified in the final version.The rules are that the card issuer must notify the consumer if a card is used in excess of its limit. Credit providers are prohibited from imposing any fees or charges, or a higher interest rate, on consumers who go over the limit, unless the consumer has previously consented to this.The new law does not place any restriction on credit providers approving transactions above the credit limit. On the issue of credit limit increases, car issuers must not make limit increase offers, except where they have obtained the express consent of the consumer to do so. The consumer may withdraw this consent at any time. The credit card issuer must keep a record of these consents.Commonwealth Bank chief executive Ralph Norris took a swipe at the Government yesterday for its constant tinkering with the financial system.Norris said: "In the last year, CBA has written submissions to eight major inquiries and participated in 44 others, together with the Australian Bankers Association."The amount of regulatory change is staggering, so is the cost. It's cost us well over $100 million a year to redesign systems and processes to meet the new regulations. One really has to ask whether all these changes meet any reasonable social benefit cost analysis. "While the system may become safer and more secure, there is a trade-off that financial services may become less innovative, less productive and less efficient in the future."