The Consumer Financial Protection Bureau is proposing to amend Regulation Z, which implements the Truth in Lending Act, so that the limit on fees that a credit card issuer may require a consumer to pay applies only to the one year period after account opening.
Currently, Regulation Z generally limits the total amount of fees that a card issuer may charge a customer to 25 percent of the credit limit in effect when the account is opened, and applies prior to account opening as well as the first year after opening.
In a proposed rule published April 12, 2012 in the Federal Register, the CFPB said it was attempting to “resolve the uncertainty” created by recent litigation surrounding Regulation Z. The CFPB is referring to a preliminary injunction granted by a South Dakota district court last year, which resulted in the Federal Reserve Board’s final rule, which applied Regulation Z to pre-account opening fees, not becoming effective. The CFPB assumed responsibility for regulations pursuant to TILA as a result of the Dodd-Frank Act.
The CFPB acknowledged that if adopted, the proposed rule “may impose potential costs on consumers by permitting covered persons to collect fees that would be disallowed absent the proposal.”