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June 8, 2012 – NAFCU supports removing fees charged prior to the opening of a consumer's new credit card account from the scope of a Regulation Z provision limiting fees under the 2009 Credit CARD Act, Dillon Shea, the association's regulatory affairs counsel, said Thursday.

Writing to the Consumer Financial Protection Bureau, Shea said the CFPB's proposed revision to the rule, originally set by the Federal Reserve Board, would better reflect the provisions of the CARD Act.

The CARD Act limits the fees a card issuer can charge in the first year a credit card account is opened; the limit is equal to 25 percent of the person's credit limit. The Fed later applied the rule also to fees assessed prior to account opening, which would include application and processing fees. A bank filed suit last July and later won a preliminary injunction, so this provision has yet to be put into practice.

Shea only had one issue with the proposal, and that has to do with an example in the original rule that may be based on faulty math. The example applies to fee adjustments that would be required if a person's credit limit is reduced in the first year the account is opened.