The CFPB has issued a new request for information about the credit card market that seeks comment on two related, but separate, reviews. One review is a review of CARD Act rules pursuant to Section 610 of the Regulatory Flexibility Act, which requires the CFPB to review certain rules within 10 years of their publication and consider the rules’ effect on small entities. The second review is the CFPB’s biennial review of the credit card market mandated by the CARD Act. Comments on the RFI must be received by 60 days after the date it is published in the Federal Register. (The RFI is scheduled to be published in tomorrow’s Federal Register.)
Section 610 Review. The CARD Act rules to be reviewed consist of an interim final rule and three final rules adopted by the Federal Reserve Board from July 2009 to April 2011 to implement a number of substantive and disclosure provisions of the CARD Act. These rules also incorporated provisions of the Fed’s January 2009 final rules that amended many Regulation Z provisions applicable to open-end credit that is not home secured and amended Regulation AA under the FTC Act to protect consumers from unfair acts and practices with respect to credit card accounts. (The RFI includes citations to each of the CARD Act rules and further information about their content.)
Through the RFI, the CFPB asks for comment on the CARD Act rules, including:
- The current scale of the rules’ economic impact as a whole, and of their major components, on small entities, including impacts on reporting, recordkeeping, and other compliance requirements
- Whether and how those impacts could be reduced, consistent with the stated objectives of applicable statutes and rules
- Current information relevant to the factors that the CFPB is required to consider in completing a Section 610 review
CARD Act Review. In addition to seeking information on topics and issues that the CFPB is required by the CARD Act to consider in its review, the RFI seeks information on the following topics and issues:
- Supplementary card features. The CFPB asks how the terms of, and practices related to, major supplementary card features (such as credit card rewards, deferred interest promotions, balance transfers, and cash transfers) are evolving.
- Debt relief and settlement. The CFPB asks:
- how issuers have changed their practices related to deferment, forbearance, or other forms of debt relief offered to consumers
- how the practices of for-profit debt settlement companies are changing, what trends are occurring in the debt settlement industry, and what has been the response of creditors and non-profit counseling agencies
- Collections. The CFPB asks:
- how creditors and third party collectors have changed their practices over the past two years in collecting on delinquent or charged-off accounts
- whether the use of electronic communication by creditors and debt collectors in connection with credit card debt has grown or otherwise evolved
- Disclosures. The CFPB asks how well current disclosure rules and practices are adapted to the digital environment and what adaptations would better serve consumers or reduce industry compliance burden.
- Cost and availability of credit cards. The CFPB asks how the characteristics of consumers with lower credit scores are changing, how groups of consumers in different score tiers are faring in the market, and how other facts relating to consumer demographics or financial lives affect consumers’ ability to successfully obtain and use credit cards.
- Issuer safety and soundness. The CFPB asks what safety and soundness risks are present or growing in the market and which entities are disproportionably affected by such risks, and how such risks relate to long-term consumer indebtedness or changes in consumers’ ability to manage and pay their debts.
- Risk-based pricing. The CFPB asks how the use of risk-based pricing has changed since the Bureau’s 2019 report on the credit card market and what has driven those changes.
- Innovation. The CFPB asks how credit card product innovation has changed since the Bureau’s 2019 report, what has driven those changes, and how broader innovations in finance (such as greater availability of and new applications for consumer data, machine learning and other technological tools) have impacted the credit card market.
These additional topics and issues were also identified in the CFPB’s previous CARD Act review RFI issued in 2019.