The American Bankers Association today urged the current leadership of the Consumer Financial Protection Bureau “to restore balance to the policy conversation about the credit card market” following several actions taken by the prior administration to weaponize the bureau against credit card services and products.
The Credit Card Accountability Responsibility and Disclosure Act, or CARD Act, requires the CFPB to conduct a biennial review of the consumer credit card market. In comments submitted as part of that review, ABA said that in recent years, there were misconceptions about the market that led to misguided regulatory actions and legislative proposals that ultimately harm consumers. The association pointed to actions taken under former CFPB Director Rohit Chopra to characterize credit card late fees and overdraft fees as “junk fees.” Such actions “would only worsen the financial well-being of tens of millions of credit cardholders,” ABA said.
To rebalance the conversation around credit cards, ABA offered three points:
- The credit card industry is highly competitive.
- Credit card rewards benefit all cardholders.
- Price controls — including interest rate/APR caps, interchange caps and other fee limits — lead to worse consumer outcomes.
“We urge the bureau to use this opportunity to reassess its assumptions and pivot to a more even-handed, evidence-based and consumer-centric regulatory approach that ensures cardholders retain access to affordable credit and benefit from rewards programs and other incentives that deliver significant value to all cardholders, across the income spectrum,” ABA said.
