U.S. consumer chief Chopra to revisit rules around credit card fees, abuses
By Katanga Johnson
WASHINGTON (Reuters) – The U.S. client watchdog will revisit its guidelines round bank card charges in a bid to stamp out abuses, discourage extreme late charges and enhance competitors, the company’s director advised Congress on Wednesday, confirming a Reuters April report.
“I’m asking the employees to have a look at whether or not we must always reopen the CARD Act guidelines … to find out whether or not there must be any adjustments,” mentioned Shopper Monetary Safety Bureau (CFPB) Director Rohit Chopra.
“We need to make certain … that bank cards are a aggressive market that individuals can use to seek out decrease charges,” he added, highlighting the necessity to particularly deal with late charges.
Chopra was responding to a lawmaker’s query in regards to the Credit score Card Accountability Accountability and Disclosure Act, a measure enacted in 2009 to curb abuses following the worldwide monetary disaster.
His assertion to members of the Home Monetary Companies Committee comes after Reuters reported this month that the company would ramp up enforcement actions towards lenders that illegally cost bank card late-payment charges and should rewrite its guidelines that set thresholds for such charges.
The event additionally marks an escalation of a broader crackdown by the CFPB on what it calls “junk charges,” a catch-all for overdraft, bank card late-payment charges, bounced examine charges, and different prices.
Banks and credit score unions pulled in additional than $15 billion inoverdraft and associated charges in 2019 and $12 billion in latecredit card charges in 2020, in response to CFPB estimates.
Chopra, who was sworn in as CFPB director in October, testified to lawmakers for a second day on Wednesday after spelling out his company’s coverage instructions and enforcement actions to the Senate Banking panel a day prior.
“The bank card market is essential to the U.S. and we want to verify we’re residing as much as the beliefs that Congress has set out within the CARD Act,” Chopra added.
(Reporting by Katanga Johnson in Washington; Modifying by Michelle Value and Richard Pullin)
