United States: CFPB Releases Fourth Report On The Consumer Credit Card Market

On August 27, 2019, the Consumer Financial Protection Bureau (CFPB or Bureau) released its fourth biennial report on the consumer credit card market (2019 Report or Report). The Report summarizes the CFPB’s views on the impact of the Credit Card Accountability Responsibility and Disclosure Act (CARD Act or Act) on the consumer credit card market. The Report was issued pursuant to Section 502(a) of the Act, which mandates that the CFPB conduct a biennial review of this market.

The 2019 Report updates the results from the CFPB’s 2017 Report and details the CFPB’s most recent review of the consumer credit card market, which covers 2017–2018. The review included responses to the Bureau’s January 2019 request for information (2019 RFI), as well as other data from regulators, industry, and consumers.

In a press release, the CFPB noted that the passage of time since the 2009 enactment of the CARD Act has resulted in challenges in stating how the consumer credit card market continues to be affected by the Act. According to the Report, going forward, while the CFPB will continue to report on the Act’s impact where feasible, future reports will have a greater focus on overall credit card market conditions.

This alert highlights several of the Bureau’s key findings in the 2019 Report, including those related to the cost and availability of credit, issuer practices, debt collection, and product innovation.

Key Findings

  • Use of Credit. The Bureau estimates that 66% of U.S. adults had a credit card account at the end of 2018. Regarding consumers who held at least one general-purpose credit card with a balance, the Report found that the average balance per cardholder was about $5,700 at the end of 2018. This is the highest average balance since mid-2009; however, the Bureau explained that, as a share of disposable income, credit card debt has been relatively flat. Also, according to the Bureau, there have been no significant changes in the average share of accounts revolving a balance over the past few years. General-purpose credit card payment rates have continued to grow since the recession, exceeding 30% at the end of 2018. The Bureau concludes that the rise in payment rates, without a correspondent decline in revolving rates, indicates that consumers using general-purpose credit cards as transaction devices are increasing purchase volume. This trend may be attributable in part to the value that consumers derive from richer rewards products. The Bureau also reports that both delinquency rates and the rate of charged-off balances have been increasing since 2017.
  • Cost of Credit. The Bureau finds that the cost of card credit on revolving accounts has increased since 2017, primarily driven by increases in interest rates tied to changes in the prevailing market interest rates. According to the 2019 Report, fees remain flat or have declined and represent slightly less than one-fifth of the total cost of credit. While fee composition has changed little over the past few years, the Bureau observes an increase in annual fee volume and a decrease in debt suspension fee volume. This increase in annual fee volume likely is driven by the richer rewards card products that have entered the market over the last few years.
  • Availability of Credit. The Bureau notes that in 2018, consumers opened about 106 million new credit card accounts, which is significantly fewer than pre-recession highs and somewhat fewer than the 2016 post-recession high. In addition, the 2019 Report notes that approximately three-quarters of all credit applications were made via digital channels (i.e., smartphone, desktop, tablet). Approval rates on applications for general-purpose credit cards have declined since 2015. For existing accounts, total credit line across all consumer credit cards reached $4.3 trillion in 2018, almost equal to its pre-recession high, although much of this growth is attributable to unused credit lines on superprime accounts.
  • Credit Card Issuer Practices. With respect to rewards, the 2019 Report says that the share of credit card spending via rewards cards has continued to increase over the past few years. However, the share of new accounts with rewards has been falling. The CFPB also acknowledged that issuers are offering digital tools to make rewards easier to use and to increase the transparency of earning and redeeming rewards. It is notable that deferred interest products, which were a focus of prior years’ CARD Act reports, were not addressed in detail in the 2019 Report.
  • Debt Collection. The Bureau found that most issuers supplemented in-house debt collection agents with resources from first-party debt collectors. On average, issuers kept 89% of pre-charge-off debt balances either in house or with first-party collectors and placed the remaining 11% with third-party collectors in 2017 and 2018. The Bureau estimates that credit card issuers placed 28% of overall charged-off inventory with third-party debt collectors in 2018. The 2019 Report indicates that, for credit card issuers that actively sell debt post-charge off, issuers plan to sell less debt in 2019 as part of a strategy to diversify post-charge-off recovery and strengthen financial resiliency. With respect to forbearance programs, the 2019 Report explains that most issuers have stopped offering short-term programs over the last several years and instead offer long-term programs.
  • Product Innovation. The Bureau reports that most basic account servicing functions are now standard in card issuers’ mobile and online platforms, and that consumers are increasingly engaged through those channels. For example, the Bureau states that the share of customers electing to receive statements digitally rather than by mail is continuing to increase significantly. These trends are notable as issuers wrestle with regulatory requirements – including, for example, the E-SIGN Act “reasonable demonstration” requirement – that challenge issuers when meeting their customers in the digital channels that an increasing number of customers prefer. The Report also highlighted enhancements in digital channels, which include letting customers freeze and un-freeze cards within a mobile app, utilizing AI in chatbots for account management functions, allowing customers to load credit cards into digital wallets from the issuer’s app, and providing customers with interactive digital interfaces. In addition, the offering of closed-end unsecured personal loans by fintech lenders and the rise of point-of-sale loans, some of which are interest free, may have led credit card issuers to offer flexible payment options. Innovations in fraud prevention include machine learning and dynamic CVV codes that refresh periodically.

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.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions