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Friday, April 13, 2012

CFPB Proposes Revisions to Credit Card Act

The CFPB issued a proposal -- in response to a U.S. District Court injunction -- that would revise a Federal Reserve rule limiting credit card fees consumers must pay before opening an account.

The Fed issued the rule last April to amend Credit Card Act regulations that limit certain credit card fees to 25% of an account’s initial credit limit during the first year. The rule, now under the CFPB’s jurisdiction, would have extended the cap to fees -- an application fee, for example -- charged before an account opening.

On Sept. 23, U.S. District Court Judge Karen Schreier granted a motion for a preliminary injunction preventing the rule from taking effect stating the statute restricted fees only after an account had been opened.

The CFPB has requested comments on whether it should conform the rule to the court ruling so that it no longer applies to fees charged prior to account opening. The overall 25% cap on certain credit card fees charged during the first year, along with the other specific provisions of the Credit Card Act, would remain in place.

Comments are due June 11th, 2012.
Read more.
Read the proposed rule.

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