Category Archives: Credit Cards

7th Circuit Holds Time and Money to Send Debt Validation Request Supports Standing

Yvonne Mack received a debt collection notice, referring to a US Bank credit card she had held. She was uncertain that the debt amount was accurate, and thus a submitted a request for validation of the debt via certified mail. She received no response. She then received a second debt collection notice. Confused, she went […]

Citizens Bank settles CFPB lawsuit over credit card disputes

Yesterday, the CFPB announced that it has reached a settlement of a lawsuit filed in 2020 against Citizens Bank. The agency alleged that the bank failed to properly manage and respond to customers’ credit card disputes and fraud claims. The settlement includes a $9 million civil penalty, and an agreement that the bank will fix […]

CFPB improves survey on credit cards to promote competition and comparison shopping

The Consumer Financial Protection Bureau this week “launched an improved survey of credit card issuers that can help consumers and families compare interest rates and other features when shopping for a new credit card.” The agency explained that the [u]pgrades to the CFPB’s terms of credit card plans survey are designed to increase price competition […]

Casting doubt on availability of service awards, 2nd Circuit affirms massive interchange-fee settlement

Almost twenty years ago, various groups of merchants filed antitrust litigation against Visa, Mastercard, and banks that serve as payment-card issuers for those networks, tied to the “interchange fees” charged for each transaction. (In full disclosure, I worked on one of the district court cases over a decade ago. I remember close-to-nothing about the case.)  […]

NYT Op-Ed: Lower-income consumers subsidize credit card rewards programs for the more affluent

It’s headlined The Dirty Little Secret of Credit Card Rewards Programs, by Chenzi Xu and Jeffrey Reppucci. After referring to a study that found that when rewards go up, so do the fees merchants pay for credit card processing, the op-ed explains: The vast majority of merchants pass these costs on to consumers by charging more for their products […]

Consumer law returns to the State of the Union Address!

Here is the section on consumer protection in President Biden’s speech: My administration is also taking on “junk” fees, those hidden surcharges too many businesses use to make you pay more. For example, we’re making airlines show you the full ticket price upfront and refund your money if your flight is cancelled or delayed. We’ve […]

Are banks right that if banks charge less for late fees, consumers will pay more overall?

As Richard and Allison posted, the CFPB has proposed a new rule limiting the credit card late fee safe harbor to $8. And as is perfectly predictable, banks are angry about facing a restriction on late fee revenue. I want to comment on their arguments against the proposed rule. First some background: the Credit CARD […]

DC Circuit finds CFPB Prepaid Rule did not violate ban on model clauses

In 2016, the CFPB issued a rule requiring certain disclosures for digital wallets and other prepaid accounts. Paypal challenged the rule as contrary to statute, unconstitutional, and arbitrary and capricious. The district court agreed with Paypal that the disclosure rules violated the EFTA ban on mandatory model clauses, and thus did not reach the other […]

American Banker reports CFPB will cut credit card late fees to $8

The Consumer Financial Protection Bureau plans to cut credit card late fees to $8, wiping out up to $9 billion a year in fees that have become highly profitable for banks and credit card companies. CFPB Director Rohit Chopra plans to propose a rule on Wednesday that would slash late fees from the current $30 […]