NAFCU hits back at CFPB’s ‘onerous’ credit card late fees proposal

NAFCU Vice President of Regulatory Affairs Ann Petros called on the CFPB to rescind its proposed rule to reduce the credit card late fees safe harbor, outlining more than 20 pages of concerns about the rule’s “onerous” impact on credit unions and their 135 million members. NAFCU has led the charge against the bureau’s proposal and mischaracterization of “junk fees” in financial services from the start, with NAFCU President and CEO Dan Berger calling for an end to the CFPB’s “war on Main Street.”

In addition, the Small Business Administration’s (SBA) Office of Advocacy submitted a comment letter criticizing the bureau for disregarding its obligation to analyze the rule’s impact on small businesses and dismissing valid concerns raised by small institutions.

NAFCU has consistently shared concerns about how quickly the bureau has moved through this rulemaking process, skipping important required steps such as convening a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel to fully understand how reducing the safe harbor will impact the industry. NAFCU, as well as the SBA, emphasized the proposal may force some credit unions to reevaluate their credit card offerings and lead to smaller credit unions exiting the credit card market altogether.

“This proposed rule will not lead to the Bureau’s intended outcome,” Petros wrote. “Rather, it will reduce competition in the credit card market, as only the largest credit card issuers will be able to absorb the resultant losses. Consequently, this will lead to further consolidation among our nation’s community-based financial institutions and reduced access to credit for consumers.”


continue reading »