CARD Act should balance consumer protection, compliance burdens
CUNA supports the intent of the Consumer Financial Protection Bureau (CFPB) to eliminate abusive credit card practices but warns against requirements that would make compliance more cumbersome for credit unions. CUNA wrote to the CFPB Tuesday in response to a request for information on the consumer credit card market, the CARD Act and its implementing regulations.
“While CUNA continues to support the stated intent of the CARD Act, which is to eliminate predatory credit card practices, we caution against any expansion of regulatory requirements that would make CARD Act compliance more cumbersome for member-owned credit unions,” the letter reads. “The Bureau should focus on ensuring its rules provide meaningful consumer protections while minimizing regulatory compliance burdens on credit unions that already offer fair and sound credit card services to their members.”
The CFPB’s review specifically seeks comment on the economic impact of the CARD Act on small entities to determine whether the rules should be continued without change or should be amended or rescinded.
This review marks the fifth such review of the credit card market.
CUNA’s letter highlights credit unions’ continued growth in the credit card marketplace and that credit unions remain responsible card providers, “as evidenced by the industry’s low delinquency and charge-off rates,” which remains lower than bank counterparts.
The letter also notes CUNA’s
- Recommendation that the CFPB study methods to improve and simplify disclosures as they relate not only to the consumer but to affected financial institutions;
- Support for legislative efforts to create a national data security standard to stem losses from breaches that expose credit card information; and
- Support for CFPB’s increased efforts to encourage financial innovation in financial services and reiterates CUNA’s call to ensure credit unions are given equal access to CFPB innovation initiatives.