Newsroom

The CFPB Wednesday released its biennial report on the state of the consumer credit card market. The report explores credit card trends, differences between consumers based on credit scores, issuer practices, and more.

The bureau’s release on the report focused heavily on the interest rates and fees paid by consumers. CFPB Director Rohit Chopra also noted “with credit card debt crossing the trillion dollar mark, we will be working to prevent bait-and-switch tactics when it comes to rewards and to increase refinancing activity so consumers can get lower rates.”

The report does include some insights into credit unions in the market: “As has been true for the past decade, credit unions represent less than one-tenth of total outstandings, but their share of loans has grown from 6.6 percent of outstandings in 2016 to 7.3 percent in 2022. Some consumers may increasingly choose to open cards at credit unions as the Federal Credit Union Act limits [annual percentage rates (APRs)] to a maximum of 18 percent. Evidence also suggests that smaller issuers may charge lower fees than the top banks.”

In response to the bureau’s request for information (RFI) to inform the report, NAFCU outlined ways to strengthen the consumer credit card market, including more regulatory clarity related to disclosures and fewer rules that jeopardize credit unions’ ability to offer affordable credit card products to underserved communities and special populations. The association also detailed several updates to improve Regulation Z disclosure requirements.

NAFCU and other financial services industry trades also flagged that the bureau’s proposal to reduce the credit card late fee safe harbor and legislative efforts to put restrictions on credit card interchange could negatively impact consumers’ access to credit, strong data security, rewards programs, and more.

NAFCU will continue to fight back against the bureau’s misguided efforts that will restrict access to safe, affordable credit.