* Cardholder confusion still high
* Amount of penalty fees charged have been reduced
* Industry had done good job so far, Warren (Rewrites throughout, adds Warren and ABA comments)
WASHINGTON/NEW YORK, Feb 22 (Reuters) - U.S. consumer regulator Elizabeth Warren warned the credit card industry of further reforms, even while praising it for going beyond the requirements of last year's crackdown on fees and interest rate increases.
Warren, speaking on Tuesday at the Treasury Department on the anniversary of the so-called CARD Act, displayed her balancing act with the financial industry -- working with firms to enact reforms, and threatening further action for those trying to skirt new rules.
"The data we have assembled indicate that much of the industry has gone further than the law requires in curbing re-pricing and overlimit fees," Warren said, citing a government survey of the impact of the CARD Act, which became effective on Feb. 22, 2010.
Among the findings is that the amount of late fees paid by card holders dropped to $427 million in November 2010 from $901 million in January 2010.
Warren peppered her praise with caveats, saying "significant confusion remains" with the terms of credit cards and regulators are ready to thwart any attempts to exploit loopholes.
Warren did not detail what rules, if any, may be necessary to get clearer terms and thwart industry evasion, but she said the administration wants "to work collaboratively with all parties."
However, the call for more reform is unwelcome to an industry still reeling from the CARD Act and prepping for a fresh Federal Reserve proposal to cap debit processing fees, mandated by last year's Dodd-Frank financial reform law. [ID:nN17133315]
Robert Hammer, who brokers card portfolio sales as head of R.K. Hammer Investment Bankers, estimates that the credit card industry lost about $11 billion in annual revenue as a result of the CARD Act, mostly from its restrictions on how lenders can raise or change interest rates.
Banks have tried to add new fees to make up for the lost interest income, with varying levels of success in off-setting their lost revenue, he said.
Bank of America Corp (BAC.N), the largest U.S. bank by assets, on Monday said it had amended the results of its main credit card unit for the last two years, applying a $20.3 billion goodwill writedown.
The bank said the writedown -- which will not affect its overall capital levels or cause it to restate earnings -- was caused by "deteriorating credit quality and the adverse impact from The CARD Act on Bank of America's credit card operations in 2009." [ID:nSGE71K0AG]
UNDER WARREN'S WATCH
Warren is heading the effort to create the new Consumer Financial Protection Bureau, which will oversee the credit card law when the bureau begins operating in July.
She said on Tuesday that a "top priority" for the bureau is making sure credit card products are easier to understand so that consumers can do comparison shopping.
Discover Financial Services (DFS.N) Chief Operating Officer Roger Hochschild said last week that the company is working with Warren and the consumer protection agency to develop clearer disclosures.
However, he also said he hopes the consumer agency will turn its attention elsewhere.
"I hope they focus a little more on mortgages and other financial products, given the amount of change that has already occurred in the credit card industry," he said during his presentation at a Keefe Bruyette & Woods card industry conference.
Industry groups this week acknowledged the increased transparency brought about by the card law, but the American Bankers Association said it has also led to less credit availability.
"Recent data indicates that the cost of credit and its availability have been negatively impacted by the act, particularly for working-class Americans, many of whom have been edged out of the marketplace or are facing higher upfront rates and tougher credit terms," Kenneth Clayton, the group's chief counsel, said in a statement on Tuesday. (Reporting by Dave Clarke in Washington and Maria Aspan in New York; Editing by Andrew Hay and Tim Dobbyn)