Financial trade groups address credit card late fee guidance

The National Association of Federally-Insured Credit Unions (NAFCU) recently joined four financial trade groups in addressing potential Consumer Financial Protection Bureau’s (CFPB) credit card late fees rulemaking.

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The NAFCU joined the American Bankers Association (ABA), the Credit Union National Association (CUNA), the Independent Community Bankers of America (ICBA), and the National Bankers Association (NBA) in forwarding correspondence to CFPB Director Rohit Chopra regarding CFPB planned rulemaking activity concerning credit card penalty fees, reminding the agency of its obligations under the Small Business Regulatory Enforcement Fairness Act (SBREFA) when proceeding with any rulemaking.

“Under SBREFA, the CFPB must convene and chair a Small Business Review Panel if it is considering a proposed rule that could have a significant economic impact on a substantial number of small entities,” the financial trade groups wrote. “Specifically, the Panel is required to collect advice and recommendations from small entities or their representatives (referred to as small entity representatives, or SERs) that are likely to be subject to the regulation that the CFPB is considering proposing. SERs provide the Panel with important and unique perspective on the potential economic impacts of complying with the regulations under consideration and alternatives to minimize these impacts.”

The financial trade groups also maintain SBREFA requires the CFPB to collect the advice and recommendations of SERs regarding whether the proposals under consideration might increase the cost of credit for small businesses and whether alternatives exist that might accomplish the stated objectives of applicable statutes and minimize any such increase.

“Any regulatory change to late fees would ultimately impact the entire card market and bring with it the potential to change the competitive position of small depository institutions in ways that must be explored through the SBREFA process,” the financial trade groups concluded.