UPDATE 3-Rep. Frank eyes Dec. 1 as credit card rules start date

(Adds ABA comments)

WASHINGTON, Sept 16 (Reuters) - U.S. Rep. Barney Frank may introduce a bill to advance the implementation date to Dec. 1 for new regulations limiting credit card interest rates and fees, a congressional aide told Reuters on Wednesday.

Now set to take full effect in February 2010, the regulations were approved by Congress and signed into law earlier this year by President Barack Obama.

"We are not happy about what we are hearing on what banks and credit card companies are doing in advance of the effective date," said Frank aide Steven Adamske.

Frank, a Massachusetts Democrat, "may be filing a bill soon ... We are looking at Dec. 1, 2009," Adamske said.

The new rules will sharply restrict credit card issuers' powers to raise interest rates on cardholders' existing balances, charge some fees and slap cardholders with unreasonable penalties.

Since the regulations were approved, with the economy in a stubborn recession, card issuers have been closing inactive accounts, cutting credit limits and raising interest rates.

Major credit card issuers with a stake in the matter include Citigroup (C.N), Bank of America (BAC.N), JPMorgan Chase & Co (JPM.N), American Express Co (AXP.N) and Capital One Financial Corp (COF.N).

"We share concerns raised by the Federal Reserve and industry observers that moving too quickly in this area could dramatically reduce the availability of credit to consumers and small businesses at a time when the economy can least afford it," Ken Clayton, senior vice president for card policy at the American Bankers Association, said in a statement.

Capital One Chief Executive Richard Fairbank said at a Barclays Capital conference in New York that he did not see a big impact on the bank's business if the implementation date is changed.