Dodd-Frank News Center

CFPB issues report on patterns of revolving and repayment of credit card accounts

This story appeared in Bank Digest.                         

The Consumer Financial Protection Bureau has issued the latest in its occasional series of data point reports—this one studying patterns of revolving and repayment of credit card accounts in the United States. Cardholders can either repay their balances in full at the end of a billing cycle or repay only a portion of the balance, borrowing the unpaid portion, in which case they are said to revolve a balance. The current report examines how often balances are revolved (or borrowed) on an account, how long balances are revolved, and how regularly they are paid down.

According to the report, about two-thirds of actively used credit card accounts carry a revolving balance, and once consumers pay less than the balance due and begin to revolve on an account, they do so continuously for about 10 months on average. The report added that the longer a balance is revolved, the higher the chances are that a consumer will continue to revolve a balance on the account.

 

CFPB blog post urges consumers to work with credit card companies on debt

This story appeared in Bank Digest.                                   

Noting that overall credit card debt increased by 13 percent from 2015 to 2017, and by 22 percent for those with very low credit scores, the authors of a Consumer Financial Protection Bureau blog post advise consumers to work with their credit card companies to help address their debt, saying that many companies "will work with you to find a repayment plan that suits your current situation."

The post also discusses the use of debt settlement companies, which "are typically for-profit companies that often state that they can negotiate with your credit card company to reduce the amount you owe." The authors describe certain drawbacks to using such companies, noting that they typically advise consumers to stop making payments, which could negatively affect their creditworthiness. Such companies also often charge large fees, according to the authors, for work that consumers can do themselves.

 In addition, the post says consumers may want to work with a credit counselor to help them manage their money and pay off their debt.

 

CFPB issues Request for Information on consumer credit card market

This story appeared in Bank Digest.                       

The Consumer Financial Protection Bureau has issued a Request for Information regarding a number of aspects of the consumer credit card market. The Bureau said it was requesting this information in connection with a review of the consumer credit card market it is required to conduct under the Credit Card Accountability Responsibility and Disclosure Act of 2009. Comments must be received by May 1, 2019.

CFPB releases report on credit card market

This story appeared in Bank Digest.                                     

The Consumer Financial Protection Bureau has released its biennial report on the state of the credit card market. According to the CFPB's release, the report found that the total amount of credit line, the number of accounts, the average amount of card debt, and enrollment in online services have all increased over the past several years.                                   

The report also found that cardholders average fewer credit cards than before the recession and that more are signing up for secured cards requiring a cash deposit. In addition, the average debt of cardholding consumers overall has increased 9 percent over the last two years, according to the report.

CFPB issues annual dollar amount adjustments under Reg. Z

This story appeared in Bank Digest.                                  

The Consumer Financial Protection Bureau is amending the official interpretations for Reg. Z, which implements the Truth in Lending Act, to revise the dollar amounts for provisions implementing TILA and amendments to TILA, including amendments under the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Home Ownership and Equity Protection Act of 1994, and the Dodd-Frank Act. The Bureau is adjusting these amounts, where appropriate, based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2017.                                  

The CFPB is required to calculate annually the dollar amounts for several provisions in Reg. Z. The final rule implementing the changes takes effect Jan. 1, 2018.

Partial extension of comment deadline on CARD Act request for information

This story appeared in Bank Digest.

The CFPB has issued a notice announcing an extension of the comment deadline for a previously issued request for information. The CFPB had published a Request for Information in the Federal Register on March 19, 2015, soliciting from the public comments on a number of aspects of the consumer credit card market in connection with a review it was conducting under the Credit Card Accountability Responsibility and Disclosure Act of 2009. The request for information provided a 60-day comment period that will end on May 18, 2015.

To allow interested persons additional time to consider and submit their responses, the CFPB is extending the comment period on four of the specific areas of interest noted in the original request for information--online disclosures, grace periods, add-on products, and debt collection—until June 17, 2015. The deadline for responses on all other areas remains unchanged.

 

CFPB proposes federal protections for prepaid products

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau is proposing new federal consumer protections for the prepaid market. The proposal would require prepaid companies to limit consumers' losses when funds are stolen or cards are lost, investigate and resolve errors, provide easy and free access to account information, and adhere to credit card protections if a credit product is offered in connection with a prepaid account. The bureau is also proposing new "Know Before You Owe" prepaid disclosures that would provide consumers with clear information about the costs and risks of prepaid products upfront.

CFPB proposing two new information collections on credit cards, financial education

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau is proposing two new information collections. The first information collection is entitled, "Consumer and College Credit Card Agreements." Sections 204 and 305 of the Credit Card Accountability Responsibility and Disclosure Act require card issuers to submit to the CFPB: agreements between the issuer and a consumer under a credit card account for an open-end consumer credit plan; and any college credit card agreements to which the issuer is a party plus certain additional information regarding those agreements. The data collections enable the CFPB to provide consumers with a centralized depository for consumer and college credit card agreements. They also present information to the public regarding the arrangements between financial institutions and institutions of higher education.

CFPB, Sen. Reed, Rhode Island libraries launch financial literacy partnership

This story appeared in Bank Digest.

Senator Jack Reed (D-RI) joined Consumer Financial Protection Director Richard Cordray and local librarians at the Marian J. Mohr Memorial Library in Johnston, R.I., to announce a new partnership to improve financial literacy in Rhode Island. According to Reed's press release, the partnership, to be run through public libraries across the state, seeks to broaden access to financial education tools and assistance to consumers on topics ranging from managing credit card debt to student loans.

"Whether it is assisting unemployed Rhode Islanders or engaging young people in reading programs, our libraries are always there for us, so I'd like to thank Rhode Island's libraries for once again stepping up to fill a pressing community need," said Reed. "Financial literacy is a lifelong endeavor, and that is why libraries are the perfect partners for expanding access to financial literacy resources in our communities. I commend the Consumer Financial Protection Bureau for having the foresight to partner with them, and I'd like to thank Director Cordray for making Rhode Island part of this important new effort."

CFPB adjusts TILA implementation costs

This story appeared in Bank Digest.

The Consumer Financial Protection Bureau has published a final rule amending the regulatory text and official interpretations for Regulation Z, which implements the Truth in Lending Act effective Jan. 1, 2014. The final rule adjusts the costs for provisions implementing amendments to TILA under the Credit Card Accountability Responsibility and Disclosure Act of 2009 and the Home Ownership and Equity Protection Act of 1994 (HOEPA). These amounts are adjusted based on the annual percentage change reflected in the Consumer Price Index in effect on June 1, 2013. Under the amendments, the minimum interest charge disclosure thresholds will remain unchanged in 2014. The adjusted dollar amount for the penalty fees safe harbor in 2014 is $26 for a first late payment and $37 for each subsequent violation within the following six months. The adjusted statutory fee trigger for HOPEA loans is $632.