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From Banking and Finance Law Daily, March 17, 2015

CFPB begins biennial review of credit card markets

By John M. Pachkowski, J.D.

The Consumer Financial Protection Bureau is taking the first steps in reviewing how the credit card market is functioning and the impact of credit card protections on consumers and issuers.

The bureau is required by the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act to undertake a review of the consumer credit market every two years. The last review occurred in October 2013 (see Banking and Finance Law DailyOct. 2, 2013).

To begin its latest review, the CFPB has issued a Request for Information to solicit information from the public about a number of aspects of the consumer credit card market.

Some of the specific areas that the bureau is requesting information on include:

  1. How the terms of credit card agreements and practices of credit card issuers changed from its 2013 review. In particular, the bureau wants to know how card issuers may have changed their pricing, marketing, underwriting, or other practices and whether those changes have benefited or harmed consumers.

  2. Information is also being sought on the extent that unfair or deceptive acts or practices still exist in the credit card market and the effects on consumers.

  3. Debt collection practices within the credit card industry is another area that the CFPB is seeking comments with an emphasis on how often card issuers use third-party collection agencies and how those relationships are managed.

  4. Finally, the bureau is seeking information on how well consumers understand rewards products and whether the disclosures for these reward products are being made in a clear and transparent manner. Information is also being sought whether improvements to these disclosures may also benefit consumers.

Commenting on the Request for Information, CFPB Director Richard Cordray stated, “With today’s inquiry, the Bureau is seeking to further understand how the credit card market is working in practice and how credit card protections affect consumers and credit card issuers. As we undertake this review, the Bureau wants to ensure it understands the information that consumers, industry, advocates, and other stakeholders believe is most relevant.”

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