[Federal Register Volume 85, Number 167 (Thursday, August 27, 2020)]
[Notices]
[Pages 52958-52965]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18855]


=======================================================================
-----------------------------------------------------------------------

BUREAU OF CONSUMER FINANCIAL PROTECTION

[Docket No. CFPB-2020-0027]


CARD Act Rules Review Pursuant to the Regulatory Flexibility Act; 
Request for Information Regarding Consumer Credit Card Market

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Notice of section 610 review and request for comments; request 
for information regarding consumer credit card market.

-----------------------------------------------------------------------

SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
requesting comment on two related, but separate, reviews. First, the 
Bureau is conducting a review of the Credit Card Accountability 
Responsibility and Disclosure Act of 2009 (CARD Act) Rules consistent 
with the Regulatory Flexibility Act. As part of this review, the Bureau 
is seeking comment on the economic impact of the CARD Act Rules on 
small entities so that it can determine whether the rules should be 
continued without change, or should be amended or rescinded, consistent 
with the stated objectives of applicable statutes, to minimize any 
significant economic impact of the rules upon a substantial number of 
such small entities. Second, the Bureau is conducting a review of the 
consumer credit card market, within the limits of its existing 
resources available for reporting purposes, pursuant to the CARD Act, 
and is seeking comment on a number of aspects of the consumer credit 
card market.

DATES: Comments must be received by October 27, 2020.

ADDRESSES: You may submit responsive information and other comments, 
identified by Docket No. CFPB-2020-0027 by any of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: [email protected]. Include Docket 
No. CFPB-2020-0027 in the subject line of the message.
     Hand Delivery/Mail/Courier: Comment Intake--CARD Act Rules 
RFA Review and Credit Card Market Review, Bureau of Consumer Financial 
Protection, 1700 G Street NW, Washington, DC 20552. Please note that 
due to circumstances associated with the COVID-19 pandemic, the Bureau 
discourages the submission of comments by hand delivery, mail, or 
courier.
    Instructions: The Bureau encourages the early submission of 
comments. All submissions must include the document title and docket 
number. Please note the specific rule or topic on which you are 
commenting at the top of each response (you do not need to address all 
rules or topics). Because paper mail in the Washington, DC area and at 
the Bureau is subject to delay and in light of difficulties associated 
with mail and hand deliveries during the COVID-19 pandemic, commenters 
are encouraged to submit comments electronically. In general, all 
comments received will be posted without change to http://www.regulations.gov. In addition, once the Bureau's headquarters 
reopens, comments will be available for public inspection and copying 
at 1700 G Street NW, Washington, DC 20552, on official business days 
between the hours of 10 a.m. and 5 p.m. eastern time. At that time, you 
can make an appointment to inspect the documents by telephoning 202-
435-9169.
    All submissions in response to this Request for Information (RFI), 
including attachments and other supporting materials, will become part 
of the public record and subject to public disclosure. Proprietary 
information or sensitive personal information, such as account numbers 
or Social Security numbers, or names of other individuals, should not 
be included. Submissions will not be edited to remove any identifying 
or contact information.
    The Bureau is requesting comment on the following two related, but 
separate, reviews: (1) The RFA section 610 review; and (2) the CARD Act 
section 502(a) review. The Bureau requests that when a commenter makes 
a specific comment, the commenter indicates whether that comment 
relates to the RFA section 610 review, the CARD Act section 502(a) 
review, or both.

FOR FURTHER INFORMATION CONTACT: Yaritza Velez, Counsel, or Krista 
Ayoub, Senior Counsel, Office of Regulations, at 202-435-7700. If you 
require this document in an alternative electronic format, please 
contact [email protected].

SUPPLEMENTARY INFORMATION: The Bureau is requesting comment on two 
related, but separate, reviews. Part I sets forth a description of the 
review of the Credit Card Accountability Responsibility and Disclosure 
Act of 2009 (CARD Act) \1\ Rules (as defined below) that the Bureau is 
conducting consistent with section 610 of the Regulatory Flexibility 
Act (RFA).\2\ As discussed below, the CARD Act Rules generally affect 
credit card issuers and other creditors that offer open-end (not home-
secured) credit plans. The CARD Act Rules also affect certain credit 
unions that were offering certain multifeatured plans at the time the 
CARD Act Rules were adopted and were separately approving and 
underwriting certain advances under those plans. As part of this 
review, the Bureau is seeking comment on the economic impact of the 
CARD Act Rules on small entities so that the agency can determine 
whether the rules should be continued without change, or should be 
amended or rescinded, consistent with the stated objectives of 
applicable statutes, to minimize any significant economic impact of the 
rules upon a substantial number of such small entities.
---------------------------------------------------------------------------

    \1\ Public Law 111-24, 123 Stat. 1734 (2009). One purpose of the 
CARD Act is to establish fair and transparent practices relating to 
the extension of open-end consumer credit plans.
    \2\ Public Law 96-354, 94 Stat. 1164 (1980).
---------------------------------------------------------------------------

    Part II discusses the review that the Bureau must conduct of the 
consumer credit card market every two years under section 502(a) of the 
CARD Act.\3\ To inform the Bureau's next review, the Bureau invites 
members of the public, including consumers, credit card issuers, 
industry analysts, consumer groups, and other interested persons to 
submit information and other comments relevant to the issues identified 
in part II, as well as any information they believe is relevant to a 
review of the credit card market. This review relates to the credit 
card market generally, and not just to small entities.
---------------------------------------------------------------------------

    \3\ See 15 U.S.C. 1616(a).
---------------------------------------------------------------------------

    The statutory authorities require these reviews, and these are not 
triggered by the current, COVID-19 related economic conditions, 
although the Bureau recognizes that the information submitted will 
reflect those conditions.
    The Bureau believes that commenters may benefit from the Bureau 
issuing one RFI for the two reviews, because it expects that some 
commenters may wish to comment on both reviews and may find some 
benefit in commenting on both reviews at the same time. The Bureau 
requests that when a commenter makes a specific comment, the commenter 
indicates whether that comment relates to the RFA section 610 review, 
the CARD Act section 502(a) review, or both.

[[Page 52959]]

I. RFA Section 610 Review

    The RFA requires each agency to consider the effect on small 
entities for certain rules it promulgates.\4\ Specifically, section 610 
of the RFA \5\ provides that each agency shall publish in the Federal 
Register a plan for the periodic review of the rules issued by the 
agency which have or will have a significant economic impact upon a 
substantial number of small entities.
---------------------------------------------------------------------------

    \4\ The term ``small entity'' is defined in the RFA. See 5 
U.S.C. 601(6).
    \5\ 5 U.S.C. 610(a).
---------------------------------------------------------------------------

    The Bureau has published such a plan in the Federal Register.\6\ 
Section 610 provides that the purpose of the review is to determine 
whether such rules should be continued without change, or should be 
amended or rescinded, consistent with the stated objectives of 
applicable statutes, to minimize any significant economic impact of the 
rules upon a substantial number of such small entities.\7\ As also set 
forth in section 610, in each review the Bureau will consider several 
factors:
---------------------------------------------------------------------------

    \6\ 84 FR 21732 (May 15, 2019).
    \7\ 5 U.S.C. 610(a).
---------------------------------------------------------------------------

    1. The continued need for the rule;
    2. The nature of public complaints or comments on the rule;
    3. The complexity of the rule;
    4. The extent to which the rule overlaps, duplicates, or conflicts 
with Federal, State, or other rules; and
    5. The time since the rule was evaluated or the degree to which 
technology, market conditions, or other factors have changed the 
relevant market.\8\
---------------------------------------------------------------------------

    \8\ 5 U.S.C. 610(b).
---------------------------------------------------------------------------

A. CARD Act Rules

    This section lists and briefly describes the rules that the Bureau 
plans to review in 2020 under the criteria described by section 610 of 
the RFA and pursuant to the Bureau's review plan.\9\
---------------------------------------------------------------------------

    \9\ 84 FR 21732 (May 15, 2019).
---------------------------------------------------------------------------

1. The Rules
    From July 2009 to April 2011, the Board of Governors of the Federal 
Reserve System (Board) published an interim final rule \10\ and three 
final rules,\11\ primarily to implement a number of substantive and 
disclosure provisions required by the CARD Act. This document 
collectively refers to these four rules as the ``CARD Act Rules.'' \12\ 
The CARD Act Rules amended Regulation Z, which implements the Truth in 
Lending Act (TILA),\13\ and the official staff commentary to the 
regulation, which interprets the requirements of Regulation Z.\14\ The 
Board issued the CARD Act Rules pursuant to its authority under section 
2 of the CARD Act \15\ and TILA sections 105(a) and (f), 127(c)(5), 
143, 148(d), and 149(b).\16\
---------------------------------------------------------------------------

    \10\ 74 FR 36077 (July 22, 2009).
    \11\ 75 FR 7658 (Feb. 22, 2010); 75 FR 37526 (June 29, 2010); 76 
FR 22948 (Apr. 25, 2011).
    \12\ The CARD Act Rules also implemented the Credit CARD 
Technical Corrections Act of 2009. Public Law 111-93, 123 Stat. 2998 
(2009); 75 FR 7658 (Feb. 22, 2010).
    \13\ 15 U.S.C. 1601 et seq.
    \14\ The CARD Act Rules were originally adopted by the Board in 
12 CFR part 226 but, upon transfer of authority by the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) to 
implement TILA to the Bureau, were renumbered as 12 CFR part 1026. 
76 FR 79768 (Dec. 22, 2011); see also 81 FR 25323 (Apr. 28, 2016). 
The Bureau subsequently amended some of the provisions in the CARD 
Act Rules. See, e.g., 78 FR 18795 (Mar. 28, 2013); 78 FR 25818 (May 
3, 2013).
    \15\ Section 2 of the CARD Act states that the Board ``may issue 
such rules and publish such model forms as it considers necessary to 
carry out this Act.'' Public Law 111-24, 123 Stat. 1734 (2009).
    \16\ 15 U.S.C. 1604(a) and (f), 1637(c)(5), 1663, 1665c, and 
1665d.
---------------------------------------------------------------------------

    Many of the provisions in the CARD Act Rules apply to a ``card 
issuer,'' as defined in Sec.  1026.2(a)(7),\17\ that extends credit 
under a ``credit card account under an open-end (not home-secured) 
consumer credit plan,'' as defined in Sec.  1026.2(a)(15)(ii). Among 
other things, the CARD Act Rules contain provisions to implement the 
CARD Act that: (1) Prohibit card issuers from extending credit without 
assessing the consumer's ability to pay, with special rules regarding 
the extension of credit to persons under the age of 21; \18\ (2) 
restrict the amount of required fees that a card issuer can charge 
during the first year after an account is opened; \19\ (3) limit the 
amount card issuers can charge for penalty fees, such as when a 
consumer makes a late payment or exceeds his or her credit limit; \20\ 
(4) restrict the circumstances under which card issuers can increase 
interest rates and certain fees on credit card accounts, and require 
subsequent reevaluations of rate increases; \21\ (5) restrict fees for 
over-the-limit transactions to one per billing cycle and require that 
the consumer opt in to payment of such transactions in order for the 
fee to be charged; \22\ (6) restrict how payments in excess of the 
minimum payment may be allocated; \23\ and (7) require card issuers to 
submit to the Bureau agreements for open-end consumer credit card 
plans, and agreements with institutions of higher education (or an 
affiliated organization) regarding the issuance of credit cards to 
students at that institution.\24\
---------------------------------------------------------------------------

    \17\ See also 15 U.S.C. 1602(o).
    \18\ 12 CFR 1026.51.
    \19\ 12 CFR 1026.52(a).
    \20\ 12 CFR 1026.52(b).
    \21\ 12 CFR 1026.55 and 1026.59.
    \22\ 12 CFR 1026.56.
    \23\ 12 CFR 1026.53.
    \24\ 12 CFR 1026.57(d) and 1026.58(c). The CARD Act Rules also 
contained the following other provisions to implement the CARD Act: 
(1) Sec.  1026.5(a)(2)(iii); (2) Sec.  1026.5(b)(2)(ii)(A) and (B); 
(3) Sec.  1026.7(b)(11) and (12); (4) Sec.  1026.9(c)(2), (e), (g), 
and (h); (5) Sec.  1026.10(b)(2)(ii), (b)(3), (d), (e), and (f); (6) 
Sec.  1026.11(c); (7) Sec.  1026.16(f); (8) Sec.  1026.57(a) through 
(c); and (9) Sec.  1026.58(a) through (b) and (d) through (g).
---------------------------------------------------------------------------

    In addition to the provisions that implement the CARD Act, the CARD 
Act Rules also incorporated provisions of (1) a final rule amending 
Regulation Z that the Board adopted in January 2009 (January 2009 
Regulation Z Rule); \25\ and (2) the Board's final rule amending 
Regulation AA under the Federal Trade Commission Act (FTC Act) \26\ to 
protect consumers from unfair acts or practices with respect to 
consumer credit card accounts (January 2009 FTC Act Rule).\27\ The CARD 
Act Rules generally incorporated these provisions, with revisions as 
applicable to be consistent with the CARD Act.\28\ The CARD Act Rules 
also generally finalized provisions of the Board's proposed rules to 
provide clarifications and technical amendments to the January 2009 
Regulation Z Rule and the January 2009 FTC Act Rule (May 2009 Proposed 
Rules), with revisions as applicable to be consistent with the CARD 
Act.\29\
---------------------------------------------------------------------------

    \25\ 74 FR 5244 (Jan. 29, 2009).
    \26\ 15 U.S.C. 41-58.
    \27\ See 74 FR 5498 (Jan. 29, 2009). The Board issued this final 
rule jointly with similar rules issued by the Office of Thrift 
Supervision (OTS) and the National Credit Union Administration 
(NCUA).
    \28\ 74 FR 54124, 54125 (Oct. 21, 2009); 75 FR 7658, 7659 (Feb. 
22, 2010). Because the Board incorporated the provisions of the 
January 2009 Regulation Z Rule and the January 2009 FTC Act Rule, as 
amended, into the CARD Act Rules, the Board withdrew the January 
2009 Regulation Z Rule and the January 2009 FTC Act Rule. 75 FR 7925 
(Feb. 22, 2010).
    \29\ 74 FR 20784 (May 5, 2009); 74 FR 20804 (May 5, 2009).
---------------------------------------------------------------------------

    The Board adopted the January 2009 Regulation Z Rule following a 
comprehensive review of TILA's rules for open-end (revolving) credit 
that is not home-secured. The January 2009 Regulation Z Rule amended 
many of the Regulation Z provisions that apply to open-end credit, 
including those in subparts A (General) and B (Open-end Credit), 
appendix G, and related commentary. The January 2009 Regulation Z Rule 
was designed, in part, to improve the effectiveness of the disclosures 
that ``creditors,'' as defined in Sec.  1026.2(a)(17),\30\ must provide 
under Regulation Z to consumers at application and throughout the life 
of an

[[Page 52960]]

open-end account.\31\ The January 2009 Regulation Z Rule provisions, as 
amended, that the Board incorporated into the CARD Act Rules, included 
changes to the format, timing, and content requirements for the five 
main types of disclosures for open-end credit governed by Regulation Z: 
(1) Credit and charge card application and solicitation disclosures; 
\32\ (2) account-opening disclosures; \33\ (3) periodic statement 
disclosures; \34\ (4) subsequent notices such as change-in-terms 
notices; \35\ and (5) advertising provisions.\36\ These revisions to 
the disclosure provisions generally affect creditors that offer open-
end (not home-secured) credit plans (including credit card accounts and 
open-end plans that are not credit card accounts such as overdraft 
lines of credit and other personal lines of credit), and persons 
advertising open-end (not home-secured) credit, whether or not they are 
creditors.\37\
---------------------------------------------------------------------------

    \30\ See also 15 U.S.C. 1602(g).
    \31\ One purpose of TILA is to promote the informed use of 
consumer credit by providing for disclosures about its terms and 
cost. 15 U.S.C. 1601(a).
    \32\ 12 CFR 1026.60.
    \33\ 12 CFR 1026.6(b).
    \34\ 12 CFR 1026.7(b).
    \35\ 12 CFR 1026.9(c)(2) and (g).
    \36\ 12 CFR 1026.16.
    \37\ 74 FR 5244, 5249, 5391 (Jan. 29, 2009).
---------------------------------------------------------------------------

    Among other things, the CARD Act Rules also incorporated provisions 
from the January 2009 Regulation Z Rule that revised commentary to the 
definition of ``open-end credit,'' as defined in Sec.  
1026.2(a)(20).\38\ These revisions clarified that advances that are 
separately underwritten are generally not open-end credit but closed-
end credit for which closed-end disclosures must be given.\39\ The 
Board expected these revisions to primarily impact certain credit 
unions that were at that time offering certain multifeatured plans and 
were separately approving and underwriting certain advances under those 
plans.\40\
---------------------------------------------------------------------------

    \38\ See also 15 U.S.C. 1602(j).
    \39\ Comment 2(a)(20)-5.
    \40\ 74 FR 5244, 5258-60, 5391 (Jan. 29, 2009).
---------------------------------------------------------------------------

    The January 2009 FTC Act Rule contained provisions that are similar 
to several of those adopted in the CARD Act.\41\ The January 2009 FTC 
Act Rule was designed to protect consumers from unfair acts or 
practices with respect to consumer credit card accounts, including (1) 
requiring institutions to provide consumers with a reasonable amount of 
time to make a payment before the institution can consider the consumer 
late in making that payment; (2) requiring institutions to allocate 
amounts paid in excess of the minimum payment in specified ways; (3) 
restricting institutions from increasing rates on existing balances 
except in specified circumstances; (4) prohibiting institutions from 
imposing finance charges based on balances for days in billing cycles 
that precede the most recent billing cycle as a result of the loss of a 
grace period; and (5) limiting the amount of fees for the issuance or 
availability of credit that institutions may charge to an account 
during the first year after account opening. The CARD Act Rules 
generally incorporated these provisions, with revisions as applicable 
to be consistent with the CARD Act.
---------------------------------------------------------------------------

    \41\ See 75 FR 7658, 7661-62, 7666-67 (Feb. 22, 2010).
---------------------------------------------------------------------------

    The May 2009 Proposed Rules generally proposed clarifications and 
technical amendments to the January 2009 Regulation Z Rule and the 
January 2009 FTC Act Rule. The Board proposed these clarifications to 
resolve confusion regarding how institutions would comply with 
particular aspects of those rules. The proposed amendments to the 
January 2009 Regulation Z Rule also included several proposed 
provisions applicable to deferred interest plans, such as plans that 
permit a consumer to avoid interest charges if a purchase balance is 
paid in full by a certain date.\42\ The CARD Act Rules generally 
finalized the provisions in the May 2009 Proposed Rules, with revisions 
as applicable to be consistent with the CARD Act.
---------------------------------------------------------------------------

    \42\ 74 FR 20784, 20786-87, 20788-91 (May 5, 2009); see also 12 
CFR 1026.7(b)(14) and 1026.16(h).
---------------------------------------------------------------------------

    The Bureau recodified Regulation Z, including the amendments made 
by the CARD Act Rules, in 2011 when the Bureau assumed rulemaking 
responsibility under TILA.\43\
---------------------------------------------------------------------------

    \43\ 76 FR 79768 (Dec. 22, 2011); see also 81 FR 25323 (Apr. 28, 
2016).
---------------------------------------------------------------------------

2. The Market
    As discussed above in part I.A.1, the CARD Act Rules primarily 
apply to credit card accounts and other open-end (not home-secured) 
products. The Bureau has monitored the credit card market generally, 
including through biennial reviews and submission of reports to 
Congress pursuant to section 502 of the CARD Act.\44\ To date, the 
Bureau has issued four reports pursuant to that obligation--in 2013, 
2015, 2017, and 2019 (collectively, the Reports).\45\ Several of these 
Reports have examined changes in the credit card market since the CARD 
Act Rules became effective, although data have generally not been 
available to evaluate changes specific to small entities in a 
comparable level of detail as was possible for large entities.\46\
---------------------------------------------------------------------------

    \44\ See 15 U.S.C. 1616.
    \45\ See Bureau of Consumer Fin. Prot., CARD Act Report, (Oct. 
1, 2013) (2013 Report), https://files.consumerfinance.gov/f/201309_cfpb_card-act-report.pdf; Bureau of Consumer Fin. Prot., The 
Consumer Credit Card Market, (Dec. 2015) (2015 Report), https://files.consumerfinance.gov/f/201512_cfpb_report-the-consumer-credit-card-market.pdf; Bureau of Consumer Fin. Prot., The Consumer Credit 
Card Market, (Dec. 2017) (2017 Report), https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2017.pdf; Bureau of Consumer Fin. Prot., The Consumer 
Credit Card Market, (Aug. 2019) (2019 Report), https://files.consumerfinance.gov/f/documents/cfpb_consumer-credit-card-market-report_2019.pdf.
    \46\ See 2017 Report at 19 n.13.
---------------------------------------------------------------------------

a. Credit Card Market
i. Market Structure and Participants
    The credit card market is one of the United States' largest 
consumer financial markets, with nearly 170 million Americans having at 
least one credit card and collectively carrying nearly $1 trillion in 
total credit card debt.\47\ The market has been growing in recent years 
by most measures, with diverse participation from the largest banks to 
small community banks, from credit unions to non-bank program managers, 
and from servicers to fintech startups. The market is highly 
concentrated, with the 10 largest issuers consistently representing the 
majority of total credit card balances, while many smaller providers 
account for a smaller share of balances.
---------------------------------------------------------------------------

    \47\ See 2019 Report at 6, 11.
---------------------------------------------------------------------------

    In 2010, there were 4,642 banks, thrifts, and credit unions that 
offered credit cards and as a result were affected by the CARD Act.\48\ 
Of these affected entities, 4,044 were small entities as defined by the 
current SBA threshold of $600 million or less in total assets.\49\ The 
trend toward bank and credit union consolidation was present prior to 
the CARD Act and has continued, which has reduced the number of small 
entities participating in the credit card

[[Page 52961]]

market. As of 2019, 4,305 banks, thrifts, and credit unions offered 
credit cards, of which 3,437 were considered small entities.\50\
---------------------------------------------------------------------------

    \48\ This analysis considers data reported through the Federal 
Financial Institutions Examination Council (FFIEC) Call Report and 
NCUA Call Report to determine the number of banks, thrifts, and 
credit unions that participate in the credit card market. Call 
Report data are matched to data on institution characteristics and 
banking structure from the Board's National Information Center. 
Prior to the first quarter of 2012, thrifts were not required to 
file a Call Report, likely resulting in an underestimate of the 
number of thrifts operating in the credit card market prior to 2012. 
To determine whether an entity is considered small according to the 
Small Business Administration (SBA) definition, this analysis uses 
average assets across the calendar year.
    \49\ U.S. Small Bus. Admin., Table of Small Business Size 
Standards Matched to North American Industry Classification System 
Codes, effective Aug. 19, 2019, Sector 52 (Finance and Insurance), 
https://www.sba.gov/document/support--table-size-standards.
    \50\ Other potentially affected small entities include non-
depository institutions that issue credit cards, though data are 
currently too limited to assess the number of such entities.
---------------------------------------------------------------------------

    Consumer credit cards generally can be divided into two distinct 
segments: General purpose cards and private label cards. General 
purpose cards are credit cards that can be used to purchase goods and 
services at a wide range of merchants. These cards display the brand of 
a major payment card network, most commonly American Express, Discover, 
Mastercard, or Visa. General purpose cards are offered by many banks, 
credit unions, and community banks. Some card issuers specialize in 
offering credit cards to consumers with subprime credit scores, while 
others may offer credit cards to consumers with prime or non-prime 
scores.
    In contrast, private label cards--sometimes called ``store 
cards''--do not carry a network brand. Consumers can use these cards 
only at the particular merchant or affiliated group of merchants 
associated with the card. This segment is highly concentrated, with 
only a handful of providers representing the overwhelming share of 
private label credit card balances. Deferred interest is a notable 
feature with this kind of card.
ii. Credit Card Pricing Structure and Credit Availability
    Credit card pricing is fairly complex and involves different 
components, such as interest rates and fees. The cost to the consumer 
also depends on a number of consumer-dependent factors, such as the 
cardholder's creditworthiness, usage of features and rewards, and 
repayment behavior.
    Consumers who utilize a credit card may pay for that credit in a 
number of different ways. Consumers may be charged an annual (or 
monthly) fee. They may incur penalty fees if they violate the account 
terms, most commonly by making a payment late. They may be charged a 
variety of other fees relating to specific features or usages of the 
account, such as cash advance fees, balance transfer fees, or foreign 
transaction fees. Finally, consumers may pay interest charges if, for 
example, consumers carry a balance from month-to-month or utilize a 
cash advance.
    As discussed above, pursuant to the CARD Act,\51\ the Bureau has 
published four Reports detailing its reviews of the state of the credit 
card market in which it examines, among other things, the cost and 
availability of card credit and recent innovations in the market. 
Several of these Reports have also examined changes in the credit card 
market since the CARD Act Rules became effective, although data have 
generally not been available to evaluate changes specific to small 
entities in a comparable level of detail as was possible for large 
entities.\52\ The Bureau's Reports observed the following changes in 
terms of credit card pricing following the implementation of the CARD 
Act: (1) Over-the-limit fees declined sharply, to a nearly non-existent 
level, after the effective date of the CARD Act opt-in rule in February 
2010; (2) The average late fee declined from the fourth quarter of 2009 
to the same quarter in 2010, following the effective date of the CARD 
Act Rules' safe harbors for penalty fee amounts; (3) There has been an 
increase in the amount and prevalence of annual fees following the CARD 
Act's implementation; \53\ and (4) The total fees, as a share of cycle 
ending balance, however, were 180 basis points (43 percent) lower in 
the fourth quarter of 2010 than the same quarter of 2008, prior to the 
implementation of the CARD Act. This effect was most noticeable for the 
deep subprime segment, which may be correlated with the 25 percent fee 
cap for cards in their first year as set forth in the CARD Act.
---------------------------------------------------------------------------

    \51\ 15 U.S.C. 1616.
    \52\ See 2017 Report at 19 n.13.
    \53\ Rewards cards may be a reason for the increase in credit 
card annual fees. See 2019 Report at 12. Credit card rewards 
programs have rapidly increased in prevalence over the past decade. 
Issuers are offering a greater diversity of rewards programs--and in 
many cases more compelling value propositions--to match the 
increasing popularity of these products with consumers. For many 
consumers, rewards have become central to the decision of which 
credit cards to acquire and how to use them. See 2015 Report at 263; 
2017 Report at 60; 2019 Report at 100-101.
---------------------------------------------------------------------------

    In addition, the Reports also found that, beginning in the first 
quarter of 2009 and continuing through the second quarter of 2010, the 
first full quarter after most of the provisions of the CARD Act took 
effect in February 2010, the account-weighted average retail annual 
percentage rate (APR) \54\ increased by 230 basis points. The increase 
was more modest among accounts with deep subprime credit scores and 
highest among accounts held by consumers with prime and superprime 
credit scores. However, for accounts with deep subprime credit scores, 
the effective interest rate fell by 200 basis points from the fourth 
quarter of 2008 to the same quarter in 2012, with much of that decline 
occurring during the period prior to when most of the CARD Act 
provisions became effective in February 2010 when retail APRs were 
increasing. Also, the incidence of repricing \55\ has come down 
significantly and has remained at very low levels since the CARD Act's 
February 2010 effective date of limitations on repricing activity.
---------------------------------------------------------------------------

    \54\ Discussions of credit card interest rates often focus on 
the APR as it is the interest rate charged on balances (the ``retail 
APR''). The APR is often used as shorthand for expressing the costs 
associated with using a credit card. However, for several reasons, 
the retail APR may not provide an accurate indication of the 
effective interest rates paid by consumers. The effective interest 
rate is defined as total interest charges for a period of time, 
stated as a percent of average cycle-ending balance for the same 
period of time. 2013 Report at 29.
    \55\ Repricing is a practice in which an issuer increases a 
consumer's APR.
---------------------------------------------------------------------------

    The Reports also found changes related to credit availability. 
First, the Reports found that there has been a reduction in the 
availability of credit for consumers with subprime scores as well as 
for students and young adults, the latter a direct effect of the CARD 
Act's restrictions on issuing cards to students and individuals under 
the age of 21. Second, a small but discernible percentage of applicants 
that issuers deemed otherwise creditworthy were declined as a result of 
insufficient income to satisfy the CARD Act's ability-to-pay 
requirement. Third, there has been a marked decline in the percentage 
of consumers receiving credit line increases on their accounts, also 
possibly due to the ability-to-pay requirement. Fourth, the Bureau 
reviewed evidence that suggested issuers might be using line management 
as a means of responding to revealed risk post-origination, in place of 
repricing balances in ways restricted by the CARD Act.
    The Bureau's 2019 Report included a review of academic scholarship 
examining the CARD Act's effects. In many cases, these academic 
analyses corroborate the Bureau's findings from prior years' card 
market reports including, for example, findings that the CARD Act led 
to reductions in consumers' total payments toward certain fees such as 
late fees and over-limit fees. However, across the methodologies and 
analyses reviewed, a consistent theme is the challenge of disentangling 
the effects of the CARD Act itself, rather than the effects of other 
market changes such as the Great Recession. Overall, the scholarship 
review suggests that the CARD Act's effect on consumer welfare is 
mixed, with some scholarship suggesting the CARD Act may have had 
unintended consequences.\56\
---------------------------------------------------------------------------

    \56\ See 2019 Report at 13.

---------------------------------------------------------------------------

[[Page 52962]]

iii. Other Developments and Innovation
    The Reports also discuss new developments and innovation in the 
credit card market since the CARD Act Rules became effective. The 
following section discusses: (1) Credit card agreements; (2) use of 
digital account servicing platforms; (3) new fixed payment features 
being offered; and (4) credit card payment rates.
    The Bureau's 2013 Report found that credit card agreements became 
simpler and shorter after the CARD Act Rules became effective.\57\ 
However, the Bureau's 2015 Report noted that card agreements became 
longer, but not more complex, from 2012 to 2014.\58\ The Bureau's 2017 
Report noted declines in the complexity level of credit card pricing 
disclosures from 2009 to 2010, and that the level of complexity had 
remained stable.\59\ These agreements remain complex documents.
---------------------------------------------------------------------------

    \57\ 2013 Report at 5, 63-66.
    \58\ 2015 Report at 119-23.
    \59\ See 2017 Report at 195-205.
---------------------------------------------------------------------------

    Consumers are increasingly relying on digital account servicing 
platforms, such as websites or mobile applications, where consumers can 
view and manage account activity. As of 2018, 78 percent of active 
accounts were enrolled in online portals for general purpose cards, as 
compared to 55 percent in 2014.\60\ The share of accounts held by 
consumers who opt out of paper billing statements has risen by more 
than one-third since 2014,\61\ and the share of accounts held by 
consumers who make payments against their accounts using digital 
channels has risen from 38 percent reported in 2013 \62\ to 55 percent 
in 2018.\63\
---------------------------------------------------------------------------

    \60\ 2019 Report at 48.
    \61\ 2019 Report at 49.
    \62\ 2013 Report at 68.
    \63\ 2019 Report at 53.
---------------------------------------------------------------------------

    A few issuers have begun offering a feature that leverages a card's 
existing credit line to provide a fixed repayment plan that is separate 
from payments made toward the revolving balance on the account. Issuers 
have implemented a variety of these types of payment options into the 
card servicing platform for easier signup. New flexible payment 
features of credit card accounts fall into two categories: Those that 
provide a payment plan for existing purchases and those that provide a 
payment plan for future purchases.\64\
---------------------------------------------------------------------------

    \64\ Id. at 177.
---------------------------------------------------------------------------

    Fixed payment plans for existing purchases allow certain individual 
purchases made on a credit card to be paid off using fixed monthly 
payments over a set period of time. Issuers that offer this type of 
feature let consumers select eligible transactions through the card's 
mobile app or online portal for fixed monthly payments. The issuers' 
products (or announced products) differ slightly but, in general, 
purchases over a certain dollar threshold are eligible.\65\
---------------------------------------------------------------------------

    \65\ Id. at 178.
---------------------------------------------------------------------------

    Credit repayment flexibility is not new, but today's options differ 
in their use of credit card mobile apps. One issuer launched a credit 
card balance management platform in 2009, but it was delivered 
separately from the primary account interaction. Today's repayment 
flexibility products are presented to the consumer in the flow of 
viewing his or her transaction history. Eligible transactions are 
denoted with an icon that links to the product terms. A range of 
repayment periods and corresponding costs are offered (e.g., three 
payments, six payments, or 12 payments). In addition, one issuer 
provides a corresponding feature through which cardholders may pay down 
the account balance in an amount equal to a specific transaction's 
dollar amount.\66\
---------------------------------------------------------------------------

    \66\ Id.
---------------------------------------------------------------------------

    The second set of flexible repayment options for credit card 
accounts consists of features that provide a payment plan for purchases 
yet to be made. Multiple issuers offer cardholders the opportunity to 
receive a cash disbursement from an unused portion of their credit 
line, which is repaid in equal monthly payments over a set period of 
time. These initiatives allow the issuers to increase consumer use of 
portions of credit line that are not currently being used. A card 
issuer may offer this feature to cardholders that meet certain basic 
eligibility checks, such as satisfactory payment history on the card 
and meaningful unused line size. Cardholders may be able to select 
different lengths of repayment, depending on their eligibility. The 
transactions extended under this feature are repaid using equal monthly 
payments for a set period of time.\67\
---------------------------------------------------------------------------

    \67\ Id. at 179.
---------------------------------------------------------------------------

    These fixed payment plans and their structures involve a broad 
array of regulatory provisions adopted in the CARD Act Rules, such as 
limitations on APR and fee increases, payment allocation rules, and 
ability to pay.\68\
---------------------------------------------------------------------------

    \68\ Id.
---------------------------------------------------------------------------

    Credit card payment rates have been increasing since 2010, as 
measured by total payments as a share of total statement balances. It 
is unclear precisely what combination of factors has contributed to 
this change. However, increases in payment rates have coincided with 
some of the regulatory changes created by the CARD Act, such as clearer 
due dates, new ability-to-pay rules, and payment disclosure 
requirements, along with the improvement in macroeconomic conditions 
and changes in consumer profiles.\69\
---------------------------------------------------------------------------

    \69\ See 2015 Report at 49-50.
---------------------------------------------------------------------------

b. Other Open-End (Not Home-Secured) Products
    As discussed in part I.A.1, the CARD Act Rules include some 
provisions that apply to open-end (not home-secured) plans generally, 
including open-end plans that are not credit card accounts, such as 
overdraft lines of credit and other personal lines of credit. The 
Bureau is aware, through its market monitoring function, of the growth 
of open-end personal lines of credit. Several non-depository lenders 
offer small-dollar open-end personal lines of credit in amounts ranging 
from approximately $500 to $4,500. Some States specifically authorize 
personal small-dollar lines of credit. For example, the Tennessee 
Flexible Credit Act allows licensed lenders to make open-end lines of 
credit, unsecured or secured by personal property, with an outstanding 
principal balance of no more than $4,000.\70\ Even with this market 
monitoring, the Bureau does not know with certainty the total number of 
small entities that offer open-end (not home-secured) products that are 
not credit card accounts. Individuals and businesses may extend small 
amounts of consumer credit covered by TILA and Regulation Z without the 
Bureau's awareness.\71\
---------------------------------------------------------------------------

    \70\ Tenn. Code Ann. sec. 45-12-101, 45-12-102, and 45-12-111.
    \71\ See 12 CFR 1026.1(c)(1). Regulation Z generally applies to 
each individual or business that offers or extends credit when four 
conditions are met: (i) The credit is offered or extended to 
consumers; (ii) the offering or extension of credit is done 
regularly; (iii) the credit is subject to a finance charge or is 
payable by a written agreement in more than four installments; and 
(iv) the credit is primarily for personal, family, or household 
purposes.
---------------------------------------------------------------------------

    As discussed in part I.A.1, the CARD Act Rules also had an impact 
on certain multifeatured plans that were being offered by credit unions 
at the time the CARD Act Rules were adopted. Some reports suggest these 
plans were offered by over 3,000 credit unions prior to the adoption of 
the CARD Act Rules,\72\ with

[[Page 52963]]

others citing a number just under 2,000,\73\ although more recent data 
appear to be unavailable.
---------------------------------------------------------------------------

    \72\ Nicole Kellner-Swick & Ashley L. Sweeney, Multi-Featured 
Open-End Lending: The Past, Present and Future, That Credit Union 
Blog (Jan. 23, 2013), https://thatcreditunionblog.wordpress.com/2013/01/23/multi-featured-open-end-lending-the-past-present-and-future/; Michelle A. Samaad, Open-End Lending Drop Blamed on Regs, 
Confusion, Credit Union Times (Aug. 5, 2012), https://www.cutimes.com/2012/08/05/open-end-lending-drop-blamed-on-regs-confusion/?slreturn=20180603145338.
    \73\ In response to the initial regulatory flexibility analysis 
in relation to the January 2009 Regulation Z Rule, a commenter that 
provides insurance and related financial services to credit unions 
reported that based on internal records, over 1,900 credit unions 
with assets under $50 million and that offer multifeatured plans 
would incur an average cost of $100,000 per credit union to switch 
to closed-end disclosures if clarifications related to the 
definition of open-end credit were adopted as proposed. 74 FR 5244, 
5391 (Jan. 29, 2009).
---------------------------------------------------------------------------

    The NCUA in July 2012 issued a supervisory letter to provide 
guidance to federal credit unions on a permissible blended approach to 
multifeatured lending that is consistent with the CARD Act Rules.\74\ 
In preparing this letter, NCUA consulted with the Bureau on the 
interpretation of Regulation Z as it relates to multifeatured open-end 
lending. Among other things, this letter discussed a permissible 
blended approach to multifeatured lending that has a single loan 
agreement with both open-end and closed-end credit subaccounts. NCUA 
indicated that this blended approach is consistent with Regulation Z, 
provided the credit union complies with the requirements under 12 CFR 
part 1026, subpart B for open-end credit and 12 CFR part 1026, subpart 
C, for each closed-end loan transaction under the single plan.
---------------------------------------------------------------------------

    \74\ Nat'l Credit Union Admin., Multi-Featured Open-End Lending 
(MFOEL) (July 2012), https://www.ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/multi-featured-open-end-lending-mfoel-0.
---------------------------------------------------------------------------

3. Bureau Resources and Analysis
    Since 2011, the Bureau has published various reports and other 
materials about the credit card market. As discussed in part I.A.2 and 
pursuant to the CARD Act, the Bureau has published four Reports 
detailing its reviews of the state of the credit card market in which 
it examines, among other things, the cost and availability of card 
credit and recent innovations in the market. In 2011, the Bureau 
published findings from a Bureau-convened conference on the effects of 
the CARD Act.\75\ Pursuant to the CARD Act,\76\ the Bureau publishes 
annually a report that discusses agreements between card issuers and 
institutions of higher education (or certain organizations affiliated 
with such institutions) in connection with the issuance of credit 
cards. To date, the Bureau has published eight of these reports.\77\ 
Other Bureau reports specific to the credit card market have generally 
focused on consumer behaviors in the market, including end-of-year 
credit card borrowing and patterns of revolving and repayment.\78\
---------------------------------------------------------------------------

    \75\ See Press Release, Bureau of Consumer Fin. Prot., CFPB 
Launches Public Inquiry on the Impact of the Card Act (Dec. 19, 
2012), https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-launches-public-inquiry-on-the-impact-of-the-card-act/.
    \76\ 15 U.S.C. 1637(r)(3).
    \77\ Bureau of Consumer Fin. Prot., Student banking reports to 
Congress, https://www.consumerfinance.gov/data-research/student-banking/student-banking-reports-congress/ (last visited July 29, 
2020). The Board published two such reports subsequent to the 
passage of the CARD Act but prior to the transfer of this CARD Act 
mandate to the Bureau.
    \78\ See Bureau of Consumer Fin. Prot., Quarterly consumer 
credit trends: End-of-year credit card borrowing (June 2018), 
https://www.consumerfinance.gov/data-research/research-reports/quarterly-consumer-credit-trends-end-year-credit-card-borrowing/; 
Bureau of Consumer Fin. Prot., Data point: Credit card revolvers 
(July 2019), https://www.consumerfinance.gov/data-research/research-reports/data-point-credit-card-revolvers/.
---------------------------------------------------------------------------

    Pursuant to the CARD Act and TILA, the Bureau collects various 
information from card issuers. The Bureau collects credit card 
agreements from card issuers on a quarterly basis.\79\ The Bureau 
publishes the agreements on its website in the credit card agreement 
database.\80\ In addition, the Bureau collects annually and publishes 
on its website college credit card marketing agreement data and credit 
card issuers' marketing agreements with colleges, universities, and 
their affiliates, as well as the number of cards covered by, and the 
amount of payments made by issuers under these agreements.\81\ The 
Bureau also collects information semi-annually from certain card 
issuers through its terms of credit card plans (TCCP) survey and 
publishes these data on its website.\82\ These data show features of 
the most commonly held (i.e., modal) credit card for issuers that 
report such information. Other previously collected data include the 
credit card database, which shows monthly account-level aggregates for 
credit cards from several large issuers, and surveys of several credit 
card issuers including questions regarding card application and 
approval, digital account servicing, deferred interest, and loan 
performance.\83\ Other data similar to these monthly account-level 
aggregates are also shared with the Bureau via memoranda of 
understanding (MOUs) with other bank regulators.
---------------------------------------------------------------------------

    \79\ 15 U.S.C. 1632(d)(2) and (3).
    \80\ Bureau of Consumer Fin. Prot., Credit card agreement 
database, https://www.consumerfinance.gov/credit-cards/agreements/ 
(last visited July 29, 2020).
    \81\ 15 U.S.C. 1637(r)(2); Bureau of Consumer Fin. Prot., 
College credit card marketing agreements and data, https://www.consumerfinance.gov/data-research/student-banking/marketing-agreements-and-data/ (last visited July 29, 2020).
    \82\ 15 U.S.C. 1646; Bureau of Consumer Fin. Prot., Terms of 
credit card plans (TCCP) survey, https://www.consumerfinance.gov/data-research/credit-card-data/terms-credit-card-plans-survey/ (last 
visited July 29, 2020).
    \83\ 12 U.S.C. 5512(c)(4).
---------------------------------------------------------------------------

4. Previous Input to the Bureau
    In 2011, the Bureau issued an RFI related to streamlining 
regulatory requirements (2011 RFI).\84\ The 2011 RFI asked the public 
to identify provisions of the inherited regulations that the Bureau 
should make the highest priority for updating, modifying, or 
eliminating because they are outdated, unduly burdensome, or 
unnecessary. The 2011 RFI also discussed several specific requirements 
that may warrant review, such as the ability-to-pay rules. It also 
sought suggestions for practical measures to make complying with the 
regulations easier. The Bureau received around 10 letters that included 
information about credit card accounts and open-end (not home-secured) 
credit generally. These comments came from a variety of stakeholders, 
including trade groups and other market participants, card issuers, and 
consumer advocacy groups.
---------------------------------------------------------------------------

    \84\ 76 FR 75825 (Dec. 5, 2011).
---------------------------------------------------------------------------

    Also, as discussed in part I.A.2 and pursuant to the CARD Act, the 
Bureau has published four biennial Reports on the state of the credit 
card market that examine, among other things, the cost and availability 
of card credit and recent innovations in the market. In connection with 
these Reports, the CARD Act requires the Bureau to ``solicit comment 
from consumers, credit card issuers, and other interested parties.'' 
\85\ For each of the four Reports, the Bureau has done so through a RFI 
published in the Federal Register.\86\ In these RFIs, the Bureau sought 
comment on various topics, including the terms of credit card 
agreements and practices of credit card issuers, the effectiveness of 
credit card disclosures, the adequacy of protection from unfair or 
deceptive acts or practices, whether the CARD Act affects the cost and 
availability of credit, whether the CARD Act has had an impact on 
issuer safety and soundness, whether the CARD Act had any effect on the 
use of risk-based pricing, and whether the CARD Act had any impact on 
credit card innovation. In response to the RFIs, comments were 
submitted by a variety of stakeholders, including trade groups 
representing credit card issuers and other market participants, card 
issuers, other industry-side market participants, individual consumers, 
and consumer advocacy groups. Each of the four Reports discussed the 
comments

[[Page 52964]]

received, as applicable, in response to the relevant RFI.
---------------------------------------------------------------------------

    \85\ 15 U.S.C. 1616(b).
    \86\ 77 FR 75410 (Dec. 20, 2012); 80 FR 14365 (Mar. 19, 2015); 
82 FR 13313 (Mar. 10, 2017); 84 FR 647 (Jan. 31, 2019).
---------------------------------------------------------------------------

    The Bureau also received information about credit card accounts and 
open-end (not home-secured) credit generally in response to the 
Bureau's 2018 Call for Evidence Initiative, which included requesting 
input on all inherited regulations and rulemaking authorities.\87\ The 
Bureau received 13 comments that included information about credit card 
accounts and open-end (not home-secured) credit generally. These 
comments came from a variety of stakeholders, including trade groups 
representing credit card issuers and other market participants, card 
issuers, and consumer advocacy groups.
---------------------------------------------------------------------------

    \87\ 83 FR 12881 (Mar. 26, 2018).
---------------------------------------------------------------------------

    Through the RFIs discussed above, market monitoring, and other 
measures, the Bureau has heard concerns expressed by some card issuers 
and trade groups about several of the CARD Act Rules' provisions and 
how they apply to credit card accounts, such as concerns about (1) 
application, account-opening, periodic statement, and advertising 
disclosure rules; (2) format and font size requirements for 
disclosures; (3) change-in-terms notice and penalty rate notice 
requirements; (4) billing error rights and procedures; (5) ability-to-
pay requirements; (6) restrictions on rate and fee increases; (7) 
restrictions on certain fees imposed during the first year after 
account opening; (8) restrictions on penalty fees; (9) rules for 
reevaluating rate increases; (10) restrictions on how payments may be 
allocated; and (11) submission of account agreements to the Bureau.
    The Bureau's experience suggests there is little overlap, 
duplication, or conflict between the CARD Act Rules and Federal, State, 
or other rules. The Bureau has not received any requests for a 
determination that the CARD Act Rules preempt State law.

B. Request for Comment

    Consistent with the section 610 review plan, the Bureau asks the 
public to comment on the CARD Act Rules, including the following 
topics:
    (1) The current scale of the economic impacts of the rules as a 
whole on small entities and of their major components on small 
entities, including impacts on reporting, recordkeeping, and other 
compliance requirements.
    (2) Whether and how those impacts on small entities could be 
reduced, consistent with the stated objectives of applicable statutes 
and the rules.
    (3) Current information relevant to the factors that the Bureau is 
required to consider in completing a section 610 review under the RFA, 
as described above.
    Where possible, please submit detailed comments, data, and other 
information to support any submitted positions.

II. CARD Act Section 502(a) Review

    As discussed in part I.A.2, section 502(a) of the CARD Act \88\ 
requires the Bureau to conduct a review, within the limits of its 
existing resources available for reporting purposes, of the consumer 
credit card market every two years. As discussed in part I.A.4, to 
inform that review, CARD Act section 502(b) instructs the Bureau to 
seek public comment.\89\
---------------------------------------------------------------------------

    \88\ See 15 U.S.C. 1616(a).
    \89\ See 15 U.S.C. 1616(b).
---------------------------------------------------------------------------

    As discussed in part I.A.2, the Bureau has issued four Reports in 
relation to these reviews. The Bureau's first Report describing this 
review was published in October 2013; the Bureau's second such Report 
was published in December 2015; the Bureau's third such Report was 
published in December 2017; and the Bureau's fourth such Report was 
published in August 2019. To inform the Bureau's next review, the 
Bureau invites members of the public, including consumers, credit card 
issuers, industry analysts, consumer groups, and other interested 
persons to submit information and other comments relevant to the issues 
expressly identified in part II.B below, as well as any information 
they believe is relevant to a review of the credit card market.

A. Background: The CARD Act

    The CARD Act was signed into law in May 2009.\90\ Passage of the 
CARD Act was expressly intended to ``establish fair and transparent 
practices related to the extension of credit'' in the credit card 
market.\91\ As discussed in part I.A.1, to achieve these agreed-upon 
purposes, the CARD Act changed the requirements applicable to credit 
card practices in a number of significant respects.\92\
---------------------------------------------------------------------------

    \90\ The CARD Act's provisions took effect in three stages: 
August 2009, February 2010, and October 2011.
    \91\ Public Law 111-24, 123 Stat. 1734 (2009).
    \92\ See also 2013 Report at 10-13.
---------------------------------------------------------------------------

B. Request for Comment

    In connection with its pending review, the Bureau seeks information 
from members of the public about how the credit card market is 
functioning. The Bureau seeks comments on the experiences of consumers 
and providers in the credit card market and on the overall health of 
the credit card market, as outlined in CARD Act section 502(a) and in 
(1) through (7) below. As noted above, while the Bureau identifies 
specific topics of interest below, the Bureau wants to be alerted to 
and understand the information that consumers, credit card issuers, 
industry analysts, consumer groups, and other interested persons 
believe is most relevant to the Bureau's review of the credit card 
market, so this list of subjects should not be viewed as exhaustive. 
Commenters are encouraged to address any other aspects of the consumer 
credit card market that they consider would be of interest or concern 
to the Bureau.
    Please feel free to comment generally and/or respond to any or all 
of the questions below but please indicate in your comments on which 
topic areas or questions you are commenting:
    (1) The terms of credit card agreements and the practices of credit 
card issuers.
    a. How have the substantive terms and conditions of credit card 
agreements or the length and complexity of such agreements changed over 
the past two years?
    b. How have issuers changed their pricing, marketing, underwriting, 
or other practices?
    c. How are the terms of, and practices related to, major 
supplementary credit card features (such as credit card rewards, 
deferred interest promotions, balance transfers, and cash advances) 
evolving?
    d. How have issuers changed their practices related to deferment, 
forbearance, or other forms of debt relief or assistance offered to 
consumers?
    e. How have creditors as well as third-party collectors changed 
their practices over the past two years of collecting on delinquent and 
charged-off credit card debt?
    f. Has the use of electronic communication (e.g., email or SMS) by 
creditors and debt collectors in connection with credit card debt grown 
or otherwise evolved?
    g. How are the practices of for-profit debt settlement companies 
changing and what trends are occurring in the debt settlement industry? 
How are creditors and non-profit credit counseling agencies responding 
to these changes and trends?
    (2) The effectiveness of disclosure of terms, fees, and other 
expenses of credit card plans.
    a. How effective are current disclosures of rates, fees, and other 
cost terms of credit card accounts in conveying to consumers the costs 
of credit card plans?
    b. What further improvements in disclosure, if any, would benefit 
consumers and what costs would card

[[Page 52965]]

issuers or others incur in providing such disclosures?
    c. How well are current credit card disclosure rules and practices 
adapted to the digital environment? What adaptations to credit card 
disclosure regimes in the digital environment would better serve 
consumers or reduce industry compliance burden?
    (3) The adequacy of protections against unfair or deceptive acts or 
practices relating to credit card plans.
    a. What unfair, deceptive, or abusive acts and practices exist in 
the credit card market? How prevalent are these acts and practices and 
what effect do they have? How might any such conduct be prevented and 
at what cost?
    (4) The cost and availability of consumer credit cards.
    a. How have the cost and availability of consumer credit cards 
(including with respect to non-prime borrowers) changed since the 
Bureau reported on the credit card market in 2019? What is responsible 
for changes (or absence of changes) in cost and availability? Has the 
impact of the CARD Act on cost and availability changed over the past 
two years?
    b. How, if at all, are the characteristics of consumers with lower 
credit scores changing? How are groups of consumers in different score 
tiers faring in the market? How do other factors relating to consumer 
demographics or financial lives affect consumers' ability to 
successfully obtain and use card credit?
    (5) The safety and soundness of credit card issuers.
    a. How is the credit cycle evolving? What, if any, safety and 
soundness risks are present or growing in this market, and which 
entities are disproportionately affected by these risks? How, if at 
all, do these safety and soundness risks to entities relate to long-
term indebtedness on the part of some consumers, or changes in 
consumers' ability to manage and pay their debts? Has the impact of the 
CARD Act on safety and soundness changed over the past two years?
    (6) The use of risk-based pricing for consumer credit cards.
    a. How has the use of risk-based pricing for consumer credit cards 
changed since the Bureau reported on the credit card market in 2019? 
What has driven those changes or lack of changes? Has the impact of the 
CARD Act on risk-based pricing changed over the past two years?
    b. How have CARD Act provisions relating to risk-based pricing 
impacted (positively or negatively) the evolution of practices in this 
market?
    (7) Consumer credit card product innovation.
    a. How has credit card product innovation changed since the Bureau 
reported on the credit card market in 2019? What has driven those 
changes or lack of changes? Has the impact of the CARD Act on product 
innovation changed over the past two years?
    b. How have broader innovations in finance, such as (but not 
limited to) new products and entrants, evolving digital tools, greater 
availability of and new applications for consumer data, and new 
technological tools (like machine learning), impacted the consumer 
credit card market, either directly or indirectly? In what ways do CARD 
Act provisions or its implementing regulations encourage or discourage 
innovation? In what ways do innovations increase or decrease the impact 
of certain CARD Act provisions, or change the nature of those impacts?

Signing Authority

    The Director of the Bureau, having reviewed and approved this 
document, is delegating the authority to electronically sign this 
document to Laura Galban, a Bureau Federal Register Liaison, for 
purposes of publication in the Federal Register.

    Dated: August 24, 2020.
Laura Galban,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2020-18855 Filed 8-26-20; 8:45 am]
BILLING CODE 4810-AM-P