Yesterday, the Texas federal district court entered an order reopening the case challenging the CFPB’s final credit card late fee rule (Rule) which it had transferred to the U.S. District Court for the District of Columbia and providing notice to the D.C. court that “the transfer was without jurisdiction and should be disregarded.”… Continue Reading

On February 29, 2024, the Consumer Financial Protection Bureau (“CFPB”) issued Consumer Financial Protection Circular 2024-01, Preferencing and steering practices by digital intermediaries for consumer financial products or services. The Circular advised that: “[o]perators of digital comparison-shopping tools can violate the [Consumer Financial Protection Act (CFPA)] prohibition on abusive acts or practices if they distort the shopping experience by steering consumers to certain products or services based on remuneration to the operator;” and “lead generators can violate the prohibition on abusive practices if they steer consumers to one participating financial services provider instead of another based on compensation received.”… Continue Reading

Last week, the CFPB released its twelfth annual report to Congress on college credit card agreements.  The annual report is mandated by the CARD Act.

The CARD Act requires mandatory reporting to the CFPB by card issuers on agreements with institutions of higher learning or certain affiliated organizations (such as alumni associations). … Continue Reading

The Consumer Bankers Association has issued the second blog post of its four-part “Facts Matter” blog series.  In the second blog post, CBA “explains how the [CFPB’s] public statements can mislead market observers by painting an inaccurate picture of the credit card marketplace.”  CBA identifies various ways in which the CFPB’s October 2023 report (Report) under the Credit Card Accountability Responsibility and Disclosure Act tells “a different, richer, story about credit card fees” than the story told by the CFPB’s press releases and speechwriters. … Continue Reading

The Consumer Bankers Association has launched a four-part blog series “Facts Matter” to counter what it calls “misinformation conveyed by the CFPB” in its press release about the CFPB’s October 2023 report (Report) under the Credit Card Accountability Responsibility and Disclosure Act (CARD Act).  The CARD Act requires the CFPB to issue a biennial report to Congress on the consumer credit card market.… Continue Reading

The CFPB and the OCC announced that they have each entered into a consent order with Bank of America, N.A. for alleged violations arising from the Bank’s representment fee practices (“Fee Consent Orders”).  The CFPB also announced that it has entered into a second consent order with the Bank for alleged violations arising from certain of the Bank’s credit card-related practices. … Continue Reading

On April 17, the Consumer Bankers Association (CBA) issued a news release responding to the CFPB’s proposal to lower the credit card late fee safe harbor amount to $8.  The CFPB claims that, even though Congress banned excessive credit card late fees, credit card companies have exploited a regulatory loophole “to escape scrutiny for charging an otherwise illegal junk fee.” … Continue Reading

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

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

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