CFPB keeps and eye on credit card purchases

by. Jeff Falk

The Consumer Financial Protection Bureau (CFPB) recently released the “CARD Act Report,” summarizing the impact of the 2009 CARD Act on the consumer credit card market. The report draws upon publicly and commercially available data, as well as data obtained by the CFPB through its supervision of large credit card issuers.

This report reiterates the importance of credit card issuers continuing to provide clearly disclosed fees and practices to consumers and of keeping in close contact with regulatory experts to ensure compliance. This is something many issuers and financial institutions (FIs) are clearly doing well already as very few community FIs have historically appeared on the CFPB’s complaints database.

According to the report, the CFPB calculates American credit cardholders would have paid $2.5 billion more in over-limit fees in 2012 had the CARD Act not been in place. As well, the CFPB found consumers saved around $1.5 billion in late fees, with the average late fee dropping by $6 in the years since the law was enacted.

The study also identified a few areas on which the CFPB is keeping a particularly close eye. These include deferred interest programs, online disclosures, rewards programs, grace periods, add-on products and pre-account opening fees. During a CARD Act Field Hearing in early October, CFPB Director Richard Cordray said, “The CARD Act brought better consumer protections and fairness to the marketplace, but we found there is more work to be done.” Cordray indicated the agency would remain vigilant about existing concerns.

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