MCUL Submits Comments on CFPB's Proposed Rule on Credit Card Penalty Fees
On May 3, MCUL submitted comments in response to the CFPB’s Proposed Rule on credit card penalty fees. As proposed, this rule would reduce the late payment safe harbor amount to $8 for all violations, from the current levels of $30 for first violations and $41 for subsequent late payments and it would reduce the fee allowance from 100% of the violation amount to 25% of the violation amount.
Along with a majority of the industry, we oppose this proposed rule. Our letter to the CFPB includes the following discussions:
- The CFPB’s messaging on “junk fees” does not align with the reality of the credit union system.
- Credit unions provide a wealth of financial education and support to their membership.
- Credit unions return profits to their membership in the form of lower interest rates and lower fees.
- The CFPB did not include meaningful information regarding credit unions or other small FI’s when determining their regulatory adjustments.
- Credit unions are not taking advantage of consumers.
- Due to the reasoning above, proposed regulatory action is misguided.
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