On Tuesday, March 17, the Consumer Financial Protection Bureau (CFPB) announced a "Request for Information Regarding Credit Card Market." It follows the 2009 CARD Act's requirement that the CFPB conduct a review of the consumer credit market every two years. This time, the Bureau is focused on:
- The continuing impact of the CARD Act on the credit card market, including the adequacy of disclosures and protections against UDAAP violations and discrimination, as well as changes in terms, conditions, pricing, and underwriting, and the cost and availability of credit.
- Six areas the Bureau outlined in its 2013 report, including add-on, reward, and deferred-interest products; fee harvester cards; online disclosures; and grace periods.
- Two new "areas of interest":
Debt collection practices, including supervision of third party debt collectors; and
Ability to pay implementation, i.e., how card issuers are implementing the CARD Act's ATR standards in deciding whether to approve applications, the amount of credit to extend, and whether to increase a credit line.
The request signals, among other things, the Bureau's continued focus on potential UDAAP and ECOA violations by lenders, particularly with respect to newer products, as well as its increasing attention to debt collection issues.
The CFPB invites comments from members of the public including consumers, card issuers, industry analysts, and consumer advocates. They're due within 60 days.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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