Notice2023-01722
Request for Information Regarding Consumer Credit Card Market
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 27, 2023
Issuing agencies
Consumer Financial Protection Bureau
Abstract
Section 502(a) of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act or Act) requires the Consumer Financial Protection Bureau (CFPB) to conduct a review (Review) of the consumer credit card market, within the limits of its existing resources available for reporting purposes. In connection with conducting that Review, and in accordance with section 502(b) of the Act, the CFPB is soliciting information from the public about a number of aspects of the consumer credit card market as described further below.
Full Text
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<title>Federal Register, Volume 88 Issue 18 (Friday, January 27, 2023)</title>
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[Federal Register Volume 88, Number 18 (Friday, January 27, 2023)]
[Notices]
[Pages 5313-5315]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-01722]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
[Docket No. CFPB-2023-0009]
Request for Information Regarding Consumer Credit Card Market
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Notice and request for information.
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SUMMARY: Section 502(a) of the Credit Card Accountability
Responsibility and Disclosure Act of 2009 (CARD Act or Act) requires
the Consumer Financial Protection Bureau (CFPB) to conduct a review
(Review) of the consumer credit card market, within the limits of its
existing resources available for reporting purposes. In connection with
conducting that Review, and in accordance with section 502(b) of the
Act, the CFPB is soliciting information from the public about a number
of aspects of the consumer credit card market as described further
below.
DATES: Comments must be submitted on or before April 24, 2023, to be
assured of consideration.
ADDRESSES: You may submit responsive information and other comments,
identified by the document title and Docket No. CFPB-2023-0009, by any
of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#17252725244827272e4854787964627a7265546572737e63547665735a76657c726345515e577471677539707861"><span class="__cf_email__" data-cfemail="192b292b2a46292920465a76776a6c747c6b5a6b7c7d706d5a786b7d54786b727c6d4b5f50597a7f697b377e766f">[email protected]</span></a>.
Include the document title and Docket No. CFPB-2023-0009 in the subject
line of the message.
<bullet> Mail/Hand Delivery/Courier: Comment Intake, Request for
Information Regarding Consumer Credit Card Market, Consumer Financial
Protection Bureau, c/o Legal Division Docket Manager, 1700 G Street NW,
Washington, DC 20552. Because paper mail in the Washington, DC area and
at the CFPB is subject to delay, commenters are encouraged to submit
comments electronically.
Instructions: The CFPB encourages the early submission of comments.
All submissions should include the agency name and docket number for
this request for information. Please note the number of the topic on
which you are commenting at the top of each response (you do not need
to address all topics). In general, all comments received will be
posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. All comments,
including attachments and other supporting materials, will become part
of the public record and subject to public disclosure. Sensitive
personal information, such as account numbers or Social Security
numbers, should not be included. Comments generally will not be edited
to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Wei Zhang, Consumer Credit, Payments,
and Deposits Markets Section Chief, Division of Research, Markets, and
Regulations, at (202) 435-7700, or <a href="/cdn-cgi/l/email-protection#1562707c3b6f7d747b7255767365773b727a63"><span class="__cf_email__" data-cfemail="d7a0b2bef9adbfb6b9b097b4b1a7b5f9b0b8a1">[email protected]</span></a>. If you require
this document in an alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#a8ebeef8eaf7e9cbcbcddbdbc1cac1c4c1dcd1e8cbced8ca86cfc7de"><span class="__cf_email__" data-cfemail="0a494c5a48554b69696f797963686366637e734a696c7a68246d657c">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Section 502(a) of the CARD Act \1\ requires
the CFPB to conduct a review, within the limits of its existing
resources available for reporting purposes, of the consumer credit card
market every two years. To inform that review, section 502(b) instructs
the CFPB to seek public comment.\2\
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\1\ See 15 U.S.C. 1616(a).
\2\ See 15 U.S.C. 1616(b).
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The CFPB's first such review was published in October 2013; the
CFPB's second such review was published in December 2015; the CFPB's
third such review was published in December 2017; the CFPB's fourth
such review was published in August 2019; the CFPB's fifth such review
was published in September 2021.\3\ To inform the CFPB's next review,
the CFPB hereby invites members of the public, including consumers,
credit card issuers, industry analysts, consumer groups, and other
interested persons to submit information and other comments relevant to
the issues expressly identified in section 2 below, as well as
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any information they believe is relevant to a review of the credit card
market.
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\3\ CARD Act Report, available at <a href="http://files.consumerfinance.gov/f/201309_cfpb_card-act-report.pdf">http://files.consumerfinance.gov/f/201309_cfpb_card-act-report.pdf</a>; The
Consumer Credit Card Market, available at <a href="http://files.consumerfinance.gov/f/201512_cfpb_report-the-consumer-credit-card-market.pdf">http://files.consumerfinance.gov/f/201512_cfpb_report-the-consumer-credit-card-market.pdf</a>; The Consumer Credit Card Market, available at
<a href="https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2017.pdf">https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2017.pdf</a>; The Consumer Credit Card Market,
available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2019.pdf">https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2019.pdf</a>; The Consumer
Credit Card Market, available at <a href="https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2021.pdf">https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2021.pdf</a>.
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1. Background: The CARD Act
The CARD Act was signed into law in May 2009.\4\ Passage of the Act
was expressly intended to ``establish fair and transparent practices
related to the extension of credit'' in the credit card market.\5\ To
achieve these agreed-upon purposes, the Act changed the requirements
applicable to credit card practices in a number of significant
respects.\6\
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\4\ The CARD Act's provisions took effect in three stages:
August 2009, February 2010, and October 2011.
\5\ Public Law 111-24, 123 Stat. 1734 (2009).
\6\ See CARD Act Report at 10-13, available at <a href="http://files.consumerfinance.gov/f/201309_cfpb_card-act-report.pdf">http://files.consumerfinance.gov/f/201309_cfpb_card-act-report.pdf</a>.
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2. Issues on Which the CFPB Seeks Public Comment for Its Review
In connection with its pending Review, the CFPB seeks information
from members of the public about how the credit card market is
functioning. The CFPB seeks comments on the experiences of consumers
and credit card issuers in the credit card market and on the overall
health of the credit card market, as outlined in section 502(a) and in
(1) through (7) below. While the CFPB identifies specific topics of
interest below, the CFPB also wants to be alerted to and understand the
information that consumers, credit card issuers, industry analysts,
consumer groups, and other interested persons believe is most relevant
to the CFPB's review of the credit card market, so this list of
subjects should not be viewed as exhaustive. Commenters are encouraged
to address any other aspects of the consumer credit card market that
they believe would be of interest or concern to the CFPB.
Please feel free to comment generally or respond to any or all of
the questions below but please indicate in your comments on which topic
areas or questions you are commenting:
(1) The Terms of Credit Card Agreements and the Practices of Credit
Card Issuers
a. How have the substantive terms and conditions of credit card
agreements or the length and complexity of such agreements changed over
the past two years?
b. How have issuers changed their pricing, marketing, underwriting,
or other practices?
c. How are the terms of, and practices related to, major
supplementary credit card features (such as credit card rewards,
deferred interest promotions, balance transfers, and cash advances)
evolving? What are the terms of, practices related to, and prevalence
of emerging supplementary credit card features (such as credit card
installment plans)?
d. How have issuers' marketing practices changed since the CFPB
reported on the credit card market in 2021? Has this impacted
consumers' ability to comparison shop? If so, in what ways?
e. What practices of credit card issuers may uniquely affect
special populations (such as servicemembers and their dependents, low-
and moderate-income consumers, older Americans, and students)? What are
the effects of protections specific to special populations (for
example, the Servicemembers Civil Relief Act or the Military Lending
Act)? How are these changing and what, if any, trends are evolving?
f. How have practices related to collecting on delinquent and
charged-off credit card debt changed over the past two years?
g. Has the use of electronic communication (e.g., email or SMS) by
creditors and debt collectors in connection with credit card debt grown
or otherwise evolved? If so, in what ways?
h. How are the terms of, and practices related to, partnerships
between credit card issuers and merchant partners (such as hospitality,
airline, healthcare, and/or retail companies) evolving?
(2) The Effectiveness of Disclosure of Terms, Fees, and Other Expenses
of Credit Card Plans
a. How effective are current disclosures of rates, fees, and other
cost terms of credit card accounts in conveying to consumers the costs
of credit card plans?
b. What further improvements in disclosure, if any, would benefit
consumers and what costs would card issuers or others incur in
providing such disclosures?
c. How well are current credit card disclosure rules and practices
adapted to the digital environment? What adaptations to credit card
disclosure regimes in the digital environment would better serve
consumers or reduce industry compliance burden?
(3) The Adequacy of Protections Against Unfair, Deceptive, or Abusive
Acts or Practices Relating to Credit Card Plans
a. What unfair, deceptive, or abusive acts and practices exist in
the credit card market? How prevalent are these acts and practices and
what effect do they have? With regard to any unfair, deceptive, or
abusive acts and practices that exist in the credit card market, how
might any such conduct be prevented and at what cost?
(4) The Cost and Availability of Consumer Credit Cards
a. How have the cost and availability of consumer credit cards
(including with respect to non-prime borrowers) changed since the CFPB
reported on the credit card market in 2021? What is responsible for
changes (or absence of changes) in cost and availability? Has the
impact of the CARD Act on cost and availability changed over the past
two years?
b. How, if at all, are the characteristics of consumers with lower
credit scores changing? How are groups of consumers in different score
tiers faring in the market? How do other factors relating to consumer
demographics or financial lives affect consumers' ability to
successfully obtain and use credit cards?
(5) The Safety and Soundness of Credit Card Issuers
a. What, if any, safety and soundness risks related to the credit
cycle are present or growing in this market, and which entities are
disproportionately affected by these risks? Has the impact of the CARD
Act on safety and soundness changed over the past two years?
b. How have current dynamics related to funding sources (such as
asset-backed securities or deposits) for credit card receivables
affected issuers' profitability and lending operations? What changes,
if any, in capital markets for credit cards have there been since the
last biennial report? How do capital requirements for different types
of institutions affect competition in the credit card market or
consumer's access to and cost of credit? How might these trends
positively or negatively impact consumers?
(6) The Use of Risk-Based Pricing for Consumer Credit Cards
a. How has the use of risk-based pricing for consumer credit cards
changed since the CFPB reported on the credit card market in 2021? What
has driven those changes or lack of changes? Has the impact of the CARD
Act on risk-based pricing changed over the past two years?
b. How have CARD Act provisions relating to risk-based pricing
impacted (positively or negatively) the evolution of practices in this
market?
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(7) Consumer Credit Card Product Innovation and Competition
a. How has credit card product innovation changed since the CFPB
reported on the credit card market in 2021? What has driven those
changes or lack of changes? Has the impact of the CARD Act on product
innovation changed over the past two years?
b. How is competition in the consumer credit card market changing?
How has the CARD Act (positively or negatively) impacted competition
between credit card issuers? How, if at all, do these changes and
impacts relate to the cost or availability of consumer credit cards?
c. What barriers to entry, if any, exist in the consumer credit
market? What obstacles may smaller financial institutions face when
launching a credit card product? How are these impediments changing and
what, if any, trends are evolving? To what extent are financial
institutions adopting ``credit card-as-a-service'' offerings? How might
these changes affect competition, promote innovation, or introduce
risk, if at all?
d. How have broader innovations in finance, such as (but not
limited to) new products and entrants offering unique features (like
rewards redemption for cryptocurrency, environmental causes, and other
categories beyond cash-back or points), evolving digital tools, greater
availability of and new applications for consumer data, and new
technological tools (like machine learning), impacted the consumer
credit card market, either directly or indirectly? In what ways do CARD
Act provisions encourage or discourage innovation? In what ways do
innovations increase or decrease the impact of certain CARD Act
provisions, or change the nature of those impacts?
e. How do innovations by firms offering other consumer financial
products and services (such as buy-now-pay-later credit, mobile
payments, or non-card point-of-sale loans) compete with credit cards,
and to what extent do consumers view them as effective alternatives to
or substitutes for credit cards?
Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2023-01722 Filed 1-26-23; 8:45 am]
BILLING CODE 4810-AM-P
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