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ABA Releases Statement on CFPB CARD Act Report


Oct 3 - The following statement was provided by Kenneth Clayton, the American Bankers Association’s chief counsel, regarding the Consumer Financial Protection Bureau's release of a report on the effect of the Card Act.

“The CARD Act has provided significant benefits, including consumer protections and tools that allow people to better manage their accounts. But the CARD Act has also come with unintended consequences that have raised contract interest rates and reduced access to credit. Regulatory limits on banks’ ability to manage risk have created a roadblock for people who are new to credit or who have struggled in the past and want a second chance. This has a significant, real-world impact not only on those consumers, but also on the broader economy. 

“The first edition of ABA’s Credit Card Market Monitor found that a change in consumer behavior, along with a shift in the risk profile of bank portfolios, means that overall consumers are paying less in credit-card interest. At the same time, outstanding credit card credit has declined more than any other major form of credit, including mortgages. While consumers are paying less interest on credit cards, that’s only to the degree they have access. Unfortunately, the CARD Act has contributed to a reduction in the availability of credit cards, particularly for those who have imperfect credit histories or no credit history at all.

“We’re concerned about the bureau’s hesitation to recognize that policy decisions like the CARD Act have unintended consequences for consumers. We urge the CFPB to be sensitive to potential negative consequences that future regulatory initiatives – like the CARD Act that came before them – could have on hundreds of millions of Americans who enjoy the many benefits that come with their credit cards.”