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Request for Information Regarding Credit Card Market
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G Street NW
Washington, DC 20552
Re: Request for Information Regarding Credit Card Market
Docket No. CFPB-2017-0006
Dear Ms. Jackson:
The Financial Services Roundtable1 and the Consumer Bankers Association2 (the “Associations”) appreciate the opportunity to provide comments on the Consumer Financial Protection Bureau’s (the “Bureau”) request for information on the credit card market.3 We strongly support the Bureau’s efforts to gather data on the credit card market and to make evidence-based, incremental improvements to the Bureau’s operations and issuances in order to enhance consumer protection. Our comments focus on the specific issues relevant to our members.
The consumer credit card market has almost returned to its pre-2008 economic recession volumes. Total outstanding revolving consumer credit was just over $1 trillion in 2008, reached a low of $840 billion in 2010, rose to $891.1 billion in 2014, and nearly returned to pre-recession volume of $1 trillion in 2016. While this slow recovery is due to many factors, one is the CARD Act and its implementing regulations.
This letter addresses the following issues related to the credit card market.
- Risk-based pricing (Section D). Restrictions on rate increases for outstanding balances have caused banks to adopt variable interest rates in order to maintain consumer access to credit consistent with safety and soundness principles.
- Deferred interest products (Section E). These products are valuable to consumers and small businesses alike. Existing disclosure requirements and substantive consumer protections sufficiently regulate deferred interest products and negate the need for further regulatory action.
- Third-party comparison sites (Section G). While credit card issuers may set certain minimum standards for third-party comparison sites, the sites should bear responsibility for their interactions with consumers.
- Innovation (Section H). Innovations in the credit card market include new technologies, data aggregation activities, credit card debt consolidation loans offered by non-banks, and alternative data and modeling techniques. We also identify roadblocks to innovation.
- Online and mobile account servicing (Section J). Mobile banking allows consumers to obtain more account information faster, and via a device that the consumer finds most convenient. We urge the Bureau to support electronic banking and make it easier for consumers to elect to receive electronic disclosures.
- Rewards products (Section K). Credit card rewards programs are an example of effective self-regulation that negates the need for regulatory intervention.
- Variable interest rates (Section L). We note the general awareness of a rising interest rate environment to conclude that there is no need for additional regulatory action with respect to variable interest rates.
- Debt collection (Section M). Debt collection rules should ensure that consumers only pay the debts they owe and are treated fairly but not unduly restrict the ability of issuers to communicate with delinquent borrowers.