CHICAGO (10/3/13)--"The [Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act)] brought better consumer protections and fairness to the marketplace, but we found there is more work to be done," Consumer Financial Protection Bureau Director Richard Cordray said during a Wednesday agency field hearing.
The field hearing followed the release of a CFPB report on the CARD Act's impact on credit markets. (See related story: CUNA's Dunn Outlines CARD Act Challenges For CUs at CFPB Event.)
The CARD Act was enacted in 2009 to prohibit and restrict a number of credit card practices.
While the bureau highlighted some improvements that have been made as a result of the CARD Act, the CFPB said it still has areas of concern, such as optional services that are sold by credit card companies to cardholders, application fees or other fees that are charged before an account is opened and deferred interest products.
Online disclosures, disclosures concerning rewards products, and grace period disclosures are also of interest. The CFPB said it will study some of these areas, and could take future action to address these issues.
According to the CFPB report:
- The total cost of credit, including all fees, interest, and finance charges paid to card issuers, declined by two percentage points between 2008 and 2012;
- Overlimit fees have been effectively eliminated, as consumers have paid about $2.5 billion less in overlimit fees than they paid in 2008; and
- The average late fee declined by $6 since 2008, resulting in a $1.5 billion decrease in late fees paid by consumers in 2012.
The CFPB also reported that the percentage of young adults ages 18-20 that have at least one credit card account has dropped by half. However, overall availability is not an issue: There is still $2 trillion of unused credit for consumers with credit cards in the marketplace, the agency noted.