Consumer Financial Protection Bureau (“CFPB”) Director Rohit Chopra shared his insights at Consumer Bankers Association Live industry conference in Washington D.C. Reuters reported that Chopra told sideline reporters, “We are going to be looking into the credit card rewards market due to an increase in consumer complaints. What the marketing gurus and consultants are telling credit card issuers is that they should focus consumers’ attention on splashy rewards, but then withhold information from them when they’re paying lots of interest and could switch to a lower-rate card, even within the same bank.”… Continue Reading

Rhode Island, Minnesota, and Nevada have joined the list of jurisdictions considering proposals to legislatively opt out of federal interest rate preemption established under the federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA). Although the legal effect remains unclear, the apparent objective of these proposed laws is to prevent interest rate “exportation” by state-chartered financial institutions.… Continue Reading

After targeting credit card late fees in its proposed rule, the CFPB has set its sights on further attacking credit card pricing through interest rates. The CFPB published a blog late last month stating that credit card interest rate margins are at an all-time high, with an average 14.3% margin in 2023 compared to 9.6% margin in 2013, and have fueled the profitability of revolving balances.… Continue Reading

In a new data spotlight issued last week, the Consumer Financial Protection Bureau (“CFPB”) found that interest rates charged on credit cards issued by large banks are higher than interest rates charged on credit cards issued by smaller banks and credit unions. In a press release about the report, CFPB Director Rohit Chopra states that “the CFPB will be accelerating its efforts to ensure that consumers can access better rates that can save families billions of dollars per year.”… Continue Reading

In a blog post that appeared last week, the CFPB reported on research into various factors considered significant in explaining current credit card interest rates.  The CFPB reported that over 175 million Americans have at least one credit card, half of which carry a balance that continues to accrue increasingly high interest rates. … Continue Reading

A federal district court judge in the Southern District of New York ruled late last week that three credit unions had successfully established a likelihood of success on their claims that the retroactive application of New York’s recently-passed rate reduction law constitutes a regulatory taking in violation of the U.S. Constitution and preliminarily enjoined state sheriffs’ offices from enforcing the law.… Continue Reading

Three credit unions have filed a federal class action lawsuit in the Southern District of New York seeking to halt the enforcement or implementation of New York’s recently passed S.B. 5724A which would retroactively and prospectively lower the statutory annual interest rate on  consumer debt judgments from 9% to 2%.  The credit unions allege that the change in rates – set to take effect April 30, 2022 – violates the United States Constitution’s due process and property protections and should be struck down in its entirety.… Continue Reading

The New Mexico House and Senate have both passed House Bill 132 which would create a 36% annual percentage rate (APR) cap on loans up to $10,000 made under the New Mexico Bank Installment Loan Act of 1959 (BILA) and the New Mexico Small Loan Act (SLA).  In an apparent effort to reach non-bank participants in bank-model programs, the bill would also expand the SLA’s anti-evasion provision. … Continue Reading

A recently-released Federal Reserve Board article, “The Cost Structure of Consumer Finance Companies and Its Implications for Interest Rates: Evidence from the Federal Reserve Board’s 2015 Survey of Finance Companies,” provides strong support for industry’s position that interest rate caps can be harmful to consumers by limiting the availability of small dollar loans.… Continue Reading

There was movement last week on two California bills that we have been tracking closely and which could substantially alter the lending and brokering landscape under the California Financing Law (“CFL”).

On July 9th, AB-539, which proposes to cap interest rates at 36% plus the federal funds rate on CFL loans of $2,500 to $10,000, passed the Senate Committee on Judiciary and was sent to the Appropriations Committee where we believe the bill will be heard around the end of August.… Continue Reading