The CFPB has issued another request for information about the credit card market. The request is intended to inform the CFPB’s biennial review of the credit card market mandated by the CARD Act. In October 2013, the CFPB issued its first report to Congress on the results of its first review. … Continue Reading
CARD Act
CFPB Orders Subprime Credit Card Company to Pay Estimated $2.7 Million in Refunds for Alleged Illegal Credit Card Fees
Today, the CFPB entered a consent order that requires subprime credit card company, Continental Finance Company, LLC (“Continental”), to refund an estimated $2.7 million to consumers who were charged alleged illegal credit card fees. The consent order also imposes a civil penalty on Continental in the amount of $250,000.
In the consent order, the CFPB found that Continental required cardholders to pay fees during the credit card account’s first year that exceeded 25% of the account’s initial credit limit, in violation of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (the “CARD Act”).… Continue Reading
CFPB publishes annual CARD Act, HOEPA and QM adjustments
The CFPB has published a final rule 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 made by the final rule are effective January 1, 2015.
The CARD Act requires the CFPB to calculate annual adjustments of (1) the minimum interest charge threshold that triggers disclosure of the minimum interest charge in credit card applications, solicitations and account opening disclosures, and (2) the fee thresholds for the penalty fees safe harbor. … Continue Reading
Credit card issuers can expect continued CFPB scrutiny
The CFPB is keeping the heat on credit card issuers. While subtitled “A review of the impact of the CARD Act on the consumer credit card market,” the CARD Act report issued yesterday by the CFPB contains more than the CFPB’s impact findings. Most notably, the report also describes the CFPB’s plans to scrutinize add-on products, deferred interest programs, rewards programs and other “areas of concern.” … Continue Reading
CFPB wants information about the CARD Act’s impact
The CFPB is seeking information on how the CARD Act amendments to the Truth in Lending Act have impacted consumers and the credit card industry. Signed into law in 2009 and implemented through a series of changes to Regulation Z that became effective in three stages spanning August 2009 to October 2011, the CARD Act imposed significant new restrictions on credit card pricing practices.… Continue Reading
CFPB suggests possible interim fix for credit card ability-to-pay rule concerns
Testimony to Congress earlier this week from Gail Hillebrand, CFPB Associate Director for Consumer Education and Engagement, seems to suggest a way for card issuers to deal with concerns about the Reg. Z rule that the Fed adopted to implement the CARD Act’s ability-to-pay requirement, at least while the CFPB considers whether to change the rule.… Continue Reading
Credit card ability to pay rule draws fire
It’s not often that Barney Frank agrees with the American Bankers Association but, when it comes to Regulation Z’s ability to pay rule for credit cards, it seems that Representative Frank now thinks the ABA got it right and the Fed got it wrong. The Reg. Z rule, adopted by the Fed in final form in March 2011 to implement the Credit CARD Act and effective October 1, requires issuers to consider an applicant’s independent ability to pay, regardless of the applicant’s age.… Continue Reading
Plain language of the CARD Act wins the day on pre-account credit card fees
The CFPB has received its first opinion from a federal court regarding the validity of a rule it was tasked with enforcing. In a September 23, 2011 opinion, the U.S. District Court for the District of South Dakota held that the revised version of Regulation Z, § 226.52, promulgated by the Federal Reserve Board, was likely to be invalid because it conflicted with the plain language of the CARD Act. … Continue Reading