CFPB Chopra Remarks on Credit Cards

On Mar. 27, CFPB issued remarks on industry issues and competition.

  • CFPB published prepared remarks of CFPB Director Rohit Chopra for CBA live.
  • Shared his thoughts on competition in one of most important and ubiquitous consumer finance markets, credit cards, and why the CFPB is sharpening its focus and attention.
  • Follows DoJ lawsuit charging Apple re practices with respect to tap-to-pay, #205678.
  • Credit Card Industry
  • Chopra noted that credit card fees and interest have never been higher for consumers.
  • Data, research has raised serious questions about how competition is working, or not.
  • Margin between prime and average APR has sharply increased over the past decade.
  • Pricing data submitted to the CFPB by 150 banks and credit unions shows that smaller institutions tend to offer lower interest rates compared to the largest 25 card issuers.
  • It is very difficult for consumers to shop for credit cards by comparing interest rates.
  • CFPB is in the process of assembling a pricing data set for third-party comparison websites and others to use to help consumers find best deal for them, more to come.
  • Concerned providers using bait-and-switch tactics to make rewards programs work.
  • Competition
  • CFPB working to finalize rule that will jumpstart competition in banking, see #188830.
  • Expects changes will help create more competition, similar to what happened with wireless phone service after FCC required number portability, no longer be locked in.
  • Will help accelerate shift to what is known as open banking, decentralized structure.

Regulators CFPB
Entity Types Bank; CNSM; CU; MSB; Thrift
Reference Sp, 3/27/2024
Functions Compliance; Financial; Legal; Market Conduct; Product Administration; Research; Underwriting
Countries United States of America
Category National Regulator
Products Banking; Cards; Loan
Regions Am
Rule Type Guidance
Rule Date 3/27/2024
Effective Date 3/27/2024
Rule Id 206429
Linked to Rule :205678
Reg. Last Update 3/27/2024
Report Section US Consumer

Last substantive update on 04/01/2024