The Consumer Credit Market: A Report from the CFPB

PLA today posts “The Consumer Credit Card Market,” the Consumer Financial Protection Bureau’s biennial report on the consumer credit card market.  The CFPB’s report, required by the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), provides significant data on the credit card market, including the use, costs, and availability of credit cards across the credit score spectrum.  Like the CFPB’s 2013 CARD Act report, this year’s report identifies “areas of concern” that might be the subject of future regulatory scrutiny, including the costs of deferred interest products, as well as the disclosures for those products, subprime card costs, and the impact of market-based rate increases on credit card balances subject to variable interest rates.

The report explores a number of other card issuer practices, including:

• The design of cardholder agreements, assessing the length and readability of the agreements;
• Pricing terms and disclosures, particularly challenges with online access to account information and disclosures;
• Ability to pay practices;
• Rewards program disclosures, terms governing rewards revaluations, forfeiture and expiration, and challenges with third-party involvement;
• Debt collection practices; and
• Credit card innovation, including security, mobile payments, and online-based competition.

The DWT Payments Team will be publishing more detailed discussions of this latest CARD Act report and will host a webinar to discuss its implications in the coming weeks—details will follow soon.