Nearly two months after it was issued on February 1, the CFPB’s proposal to make significant changes to the Regulation Z rules for credit card late fees was published in today’s Federal Register. The changes include a substantial reduction in the safe harbor amounts and the elimination of the annual inflation adjustments. … Continue Reading
Credit Cards
CFPB announces changes to semi-annual survey of credit card terms
By John L. Culhane, Jr. & Loran Kilson on
The CFPB has announced that it has made changes to its semi-annual survey of credit card terms. According to the CFPB, the changes are “designed to increase price competition in the credit card market by allowing people to comparison shop for the best prices and products.”
The Fair Credit and Charge Card Disclosure Act of 1988 requires the CFPB to collect data semi-annually from the largest 25 credit card issuers and at least 125 additional issuers selected by the CFPB based on geography and other considerations. … Continue Reading
“Life takes Visa” but debt collectors don’t? New debt repayment rules are coming for collection agencies on April 15, 2023
By Abigail S. Pressler on
Posted in Credit Cards, Debt Collection
Move over, Tax Day! This year, April 15 falls on a Saturday so the IRS moved the tax filing deadline to April 18. What will you do with all that extra time? Don’t worry, Visa’s got you covered.
Visa recently notified its business network that new rules for debt repayment are coming on April 15, 2023. … Continue Reading
This week’s podcast episode: A close look at the Consumer Financial Protection Bureau’s credit card late fees proposal, with special guest Todd J. Zywicki, Professor of Law, George Mason University Antonin Scalia Law School
By Barbara S. Mishkin on
The CFPB has issued a proposal that would make significant changes to the current rules for credit card late fees, including substantially reducing the safe harbor late fee amounts that card issuers can charge and eliminating annual inflation adjustments. After reviewing the legislative and regulatory history of the current rules, we look at the CFPB’s flawed rationale for reducing the safe harbor to a flat $8 for all late payments, identify the serious flaws in its economic analysis of the likely effects of the reduction, and discuss how the proposal relates to the Biden Administration’s junk fees initiative. … Continue Reading
CFPB issues findings on “suppression” of actual payment data by major credit card issuers
By John L. Culhane, Jr. on
In May 2022, the CFPB sent letters to the chief executive officers of six major credit card issuers regarding their companies’ payment furnishing practices. On February 16, the CFPB published a blog post about its key findings based on the issuers’ responses to those letters and released the letter it sent to the issuers summarizing its key findings.… Continue Reading
ABA files amicus brief in support of bank’s position that TILA credit card offset prohibition does not apply to amounts owed on a HELOC
By John L. Culhane, Jr. on
The issue of whether a home equity line of credit (HELOC) that can be accessed using a credit card is a “credit card plan” subject to the Truth in Lending Act’s setoff prohibition is currently before the U.S. Court of Appeals for the Fourth Circuit. The American Bankers Association recently filed an amicus brief in the case in support of the appellee bank’s position that the prohibition does not apply to HELOCs. … Continue Reading
CFPB proposes significant changes to credit card late fee rules, including reduction in late fee safe harbor amounts and elimination of annual inflation adjustments
We suspected something was afoot when December 2022 came and went without the CFPB announcing its annual inflation adjustments to the credit card late fee safe harbor amounts set forth in Regulation Z (which implements the Truth in Lending Act). With the CFPB’s issuance yesterday of a proposal to substantially reduce the safe harbor amounts, eliminate the annual inflation adjustments, and make other significant changes to the Regulation Z rules for credit card late fees, we now know the reason for the CFPB’s inaction on the adjustments.… Continue Reading
Banking trade groups highlight CFPB SBREFA obligations for credit card penalty fees rulemaking
By John L. Culhane, Jr. on
In a letter to Director Chopra, five banking trade groups address the CFPB’s obligation to comply with the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) before proposing a rule on credit card late fees and late payments. The groups are the American Bankers Association, Credit Union National Association, Independent Community Bankers of America, National Association of Federally-Insured Credit Unions, and National Bankers Association.… Continue Reading
CFPB issues request for information on consumer credit card market
By John L. Culhane, Jr. on
The CFPB has issued a new request for information (RFI) to inform its biennial review of the credit card market mandated by the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). Comments on the RFI must be received by April 24, 2023.
The CFPB’s first CARD Act report was published in October 2013, its second report was published in December 2015, its third report was published in December 2017, its fourth report was published in August 2019, and its fifth report was published in September 2021.… Continue Reading
CFPB annual CARD Act, HOEPA, QM adjustments do not include credit card penalty fees safe harbors
On December 23, the CFPB published a final rule in the Federal Register regarding various annual adjustments it is required to make under provisions of Regulation Z (TILA) that implement the CARD Act, HOEPA, and the ability to repay/qualified mortgage provisions of Dodd-Frank. The adjustments reflect changes in the Consumer Price Index (CPI) in effect on June 1, 2022 and will take effect January 1, 2023.… Continue Reading