CFPB Seeks Public Comment on Amendment to Credit Card Act Rule
April 24, 2012
April 24, 2012
The Consumer Financial Protection Bureau (CFPB) is seeking public comment on a proposal to revise a 2011 rule that the Federal Reserve Board had issued on credit card fees, in response to a federal court ruling that had granted a preliminary injunction to block the rule from taking effect.
The 2009 Credit CARD Act limited certain fees charged during the first year after the account is opened to 25 percent of the account’s initial credit limit. In April 2011, the Federal Reserve Board amended its rules implementing the CARD Act to extend this limitation to fees that the consumer must pay prior to opening an account, such as an application fee.
On September 23, 2011, the U.S. District Court for South Dakota granted a motion for preliminary injunction preventing the amendment from taking effect, citing the plain language of the statute that applied restrictions on fees only after a credit card account has been opened by a customer.
In order to resolve the litigation, the CFPB is seeking comment on whether it should conform the rule to the court ruling so that it no longer applies to fees charged prior to account opening. The overall 25-percent cap on certain credit card fees charged during the first year, along with the other specific provisions of the CARD Act, would remain in place.
The proposed rule was published in the Federal Register on April 12, 2012. Comments must be received on or before June 11, 2012.
Questions? Contact the Compliance Hotline: 1.800.546.4465, email@example.com.