On Friday, the Consumer Financial Protection Bureau (CFPB) published a request for information about the credit card market. The CFPB uses responses to those requests, in conjunction with other data and research, to publish the biennial consumer Credit Card Market Report required by the Credit Card Accountability Responsibility and Disclosure Act (CARD). The CFPB issued its first Credit Card Market Report in October 2013 and its second report in December 2015. The 2015 report focused on costs and availability of card credit, issuer practices, product innovation, deferred interest cards, rewards programs, and debt collection efforts.
The CFPB has specifically requested information relating to the following areas:
- Terms of Credit Card Agreements and Issuer Practices – Substantive changes to the terms and conditions of credit card agreements, including the ways in which issuers have changed their pricing, marketing, underwriting, or other practices;
- Effectiveness of Disclosures – The effectiveness of current disclosures regarding rates, fees, and other costs and terms of credit card accounts, methods to improve those disclosures, and the costs associated with improvements;
- Adequacy of UDAAP Protections – The existence and frequency of unfair, deceptive, or abusive acts and practices, or unlawful discrimination and methods to reduce these practices;
- Cost and Availability of Consumer Credit Cards – Changes in the cost and availability of consumer credit cards and the factors that have driven any changes;
- Deferred Interest Products – Market trends regarding deferred interest products and methods to address risks associated with deferred interest products;
- Subprime Specialist Products – The differences in consumer experience when using a subprime specialist product rather than a mass market credit card;
- Third-Party Comparison Sites – The degree to which consumers understand the risks and benefits of third-party comparison sites and the degree to which current standards protect consumers from unfair, deceptive, or abusive acts and practices;
- Innovation – The impact of advances in payment security technology and new consumer lending models on consumers;
- Secured Credit Cards – The current state of the secured credit card market and potential risks that consumers should consider when choosing secured cards;
- Online and Mobile Account Servicing – Information about the degree to which a shift towards electronic billing decreases the likelihood that consumers will actually see required disclosures and the obstacles, including regulatory obstacles, that inhibit innovation in mobile and online account servicing;
- Rewards Products – Information regarding market trends and potential risks to consumers associated with rewards programs;
- Variable Interest Rates – The extent to which consumers are aware that interest rate increases could increase borrowing costs for funds borrowed prior to the increase and the practices issuers use to inform consumers of rate increases; and
- Debt Collection – Changes in policies and practices of credit card issuers’ collection and debt sale practices.
The CFPB identified the role of subprime specialists, deferred interest products, and variable interest rates as areas of consumer concern in the 2015 Credit Card Market Report. Therefore, responses in these areas may be especially likely to influence future rulemaking and/or regulatory enforcement action. Additionally, the specific solicitation regarding information related to third-party comparison sites could signal that the CFPB plans to enhance its focus on the relationships between issuers and these sites.
Interested parties must submit comments prior to June 8, 2017. If you have any questions about the comment process, please contact the authors of this article for further information.