The CFPB has proposed a safe harbor for credit card late-payment fees at $8. What are the consequences to banks and consumers if this is the final rule? We’d gone through a rigorous exercise with policymakers to set the fees where they are today. Then the CFPB came out with its proposal, and President Biden said during the State of the Union — before the ink had even dried — that the fees would be lowered to $8, presupposing this rule. Which makes it extremely difficult to have a productive discussion about what the fees should be. If this is the final rule, the implications for banks and consumers would be huge. The administration seems to be telling consumers that they don’t need to pay their credit card bills, basically. But that will affect consumers in other ways. Their credit scores could drop; they may even lose access to credit. About 74% of borrowers, even those who pay their credit card bills on time, will see their costs increase. We also don’t think the CFPB did the cost-benefit analysis to justify how they got to $8 or took into account the full costs to a bank of managing late fees. There’s a litany of post-charge off costs, pre-charge off costs and other costs that they didn’t consider. What will be the impact of 1071, the CFPB’s rule on small-business data collection? Our banks support the intent of 1071. We’ve had significant concerns about some of its elements, and we actually did achieve certain things that are reflected in the final rule, but one of the things we didn’t achieve was a phase-in approach for 1071. We just need more time to implement it. The largest banks in the country don’t have the systems in place to collect and report this data from small businesses. If it’s going to be difficult for them, I can’t imagine the challenge facing smaller institutions. The Supreme Court is due to weigh in on the funding structure of the CFPB. How do you see that playing out? It’s obviously a really important case. The CBA believes in having a strong regulator overseeing consumer protection. Agencies should be able to operate and issue regulations without reproach. But we don’t see that happening today, and we want more stability, transparency and oversight of the CFPB. If the Supreme Court does rule that the bureau’s funding structure is unconstitutional and that Congress needs to make it constitutional and fund the CFPB, there are a number of bills that have passed committee that would do just that. Anne Benigsen President SOCIAL ENGINEERING NETWORK MONITORING BY COMMUNITY BANKERS FOR COMMUNITY BANKS www.acivitas.com VULNERABILITY SCANS PENETRATION TESTING Chris Tuzeneu VP – Information Security To listen to the full conversation, visit https://bankingwithinterest.libsyn.com/ cbas-johnson-on-ma-credit-card-late-fees- and-cfpbs-future. 32 | INDEPENDENT REPORT
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