NAFCU urges CU flexibility, level playing field in credit card market
In response to the CFPB's request for information (RFI) regarding the consumer credit card market, NAFCU's Kaley Schafer advocated for more flexibility to allow credit unions to be able to properly serve their members. She noted that credit unions, on average, offer lower interest rates on credit cards than banks: 11.69 percent vs. 13.62 percent, respectively.
In a letter, Schafer, NAFCU regulatory affairs counsel, asked that the bureau:
- encourage effective credit card disclosure use, including giving credit unions flexibility in providing required disclosures using mobile banking platforms;
- recognize the importance of a national data security standard in light of the increased volume of data breaches which poses a safety and soundness concern to credit unions; and
- ensure that a level playing field exists between fintech companies and regulated financial institutions to allow credit unions the opportunity to develop innovative credit card products.
Schafer also reiterated the need to increase access to secured credit cards for "credit invisibles," and urged the bureau to reevaluate the ability to pay requirement of the CARD Act.
"Given that consumer credit card debt is at a record high, it is important the Bureau continue to report on the market to ensure fair and transparent practices are taking place in accordance with the CARD Act's intent. More importantly, the Bureau should entertain changes to the regulations carrying out the CARD Act as the consumer credit card market evolves," Schafer wrote.
To read the full letter, including responses to safety and soundness issues, the effectiveness of disclosures and more, click here. NAFCU will continue to monitor and update on any potential actions taken by the CFPB following the RFI.
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