The American Bankers Association and six banking and credit union associations on Tuesday requested that the CFPB extend by at least 60 days the comment period for a proposed rulemaking on credit card penalty fees. The agency in February proposed adjusting the safe harbor dollar amount for late fees to $8 and capping fee amounts to no more than 25% of the required payment, among other changes. Public comments on the proposal are due Friday.
In a letter, the trade groups noted that the Regulation Z penalty fee provisions in the Truth in Lending Act have not been substantively amended since 2010. They requested pushing back the comment deadline by 60 days to June 3 or 90 days after publication in the Federal Register. “Failure to provide sufficient time for industry to consider the proposed rule’s impact on consumers would result in an incomplete administrative record and arbitrary agency action, and likely would result in unintended consequences, adverse consumer and small business impact, and ultimately create flawed public policy,” the groups said.
ABA and the other associations said the CFPB’s error is compounded by the fact that, despite industry feedback and data to the contrary, it did not convene a small business review panel for the proposed changes. “A rush to finalize significant changes to a long-standing rule that has endured through CFPB leadership appointed by both political parties, without providing sufficient time for commenters to provide data and other information on consumer and market impacts, would invite scrutiny and the likelihood of future revision, which would not benefit anyone,” they said.