US consumer chief Chopra to review rules on credit card fees and abuse

The seal of the Consumer Financial Protection Bureau (CFPB) is seen at its headquarters in Washington, DC, U.S., May 14, 2021. REUTERS/Andrew Kelly

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WASHINGTON, April 27 (Reuters) – The U.S. consumer watchdog will revise its rules on credit card fees in a bid to stamp out abuse, discourage excessive late fees and spur competition, a the agency’s director told Congress on Wednesday, confirming a Reuters report from April.

“I’m asking staff to consider whether we should reopen the CARD Act rules … to determine if there needs to be any changes,” Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra said.

“We want to make sure … that credit cards are a competitive marketplace that people can use to find lower rates,” he added, stressing the need to specifically address credit card fees. delay.

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Chopra was responding to a lawmaker’s question about the Credit Card Accountability and Disclosure Act, a measure enacted in 2009 to combat abuse in the wake of the global financial crisis.

His statement to members of the House Financial Services Committee comes after Reuters reported this month that the agency would step up enforcement action against lenders who illegally charge credit card late payment fees and may rewrite its rules that set thresholds for these fees. Read more

The development also marks an escalation of a broader crackdown by the CFPB on what it calls “junk fees,” a catch-all for overdrafts, credit card late payment fees, check fees NSF and other charges.

Banks and credit unions took in more than $15 billion in overdraft and related fees in 2019 and $12 billion in late credit card fees in 2020, according to CFPB estimates.

Chopra, who was sworn in as CFPB director in October, testified before lawmakers for a second day on Wednesday after explaining his agency’s policy directions and enforcement actions to the Senate banking panel the day before.

“The credit card market is critical in the United States, and we need to make sure we live up to the ideals that Congress enshrined in the CARD Act,” Chopra added.

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Reporting by Katanga Johnson in Washington; Editing by Michelle Price and Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

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