The Consumer Financial Protection Bureau’s (CFPB) final rule
restricting credit card late fees faces a resolution of disapproval aimed at
nullifying the regulation via the Congressional Review Act (CRA). The House
Financial Services Committee (FSC) voted 28-22 along party lines to advance the
measure, which has substantial industry support, to the full House for
consideration, following a hearing called to address concerns about the bureau's transparency and financial reporting.
See what various financial trade associations have to say
about the resolution, as well as other recent regulatory and legislative developments.
CBA president comments on measure to overturn credit card
late fee rule
Consumer Bankers Association (CBA) President and CEO Lindsey
Johnson released a statement noting her organization’s support for Rep. Andy
Barr’s (R-Ky.) measure to overturn the CFPB’s final rule limiting credit card
late fees for large card issuers.
“As we’ve long said, this politically-motivated rule will
increase the costs of credit cards for the vast majority of consumers who pay
their credit cards on time, and it will significantly impact the long-term
financial health of American cardholders who frequently pay late,” Johnson
said. “By passing this resolution to stop the rule from taking effect, the committee
has demonstrated its commitment to protecting consumers who pay on time and
retaining access to credit for low-income and underbanked families. I’m hopeful
that the House will swiftly pass this resolution, and then the Senate, to send
a clear message to the CFPB: financial regulatory policy should be guided by
sound policy, not partisan politics.”
ICBA supports two disapproval measures passed by FSC
Although the CFPB’s credit card late fee rule mainly applies
to large financial institutions, the Independent Community Bankers of America
(ICBA) expressed support for the resolution of disapproval targeting the rule. ICBA
noted in a blog
post that it supports overturning the credit card rule due to concerns
about a potential increase in late payments and additional interest charges for
consumers. The organization also stated its support for a separate resolution
proposing to overturn the Securities and Exchange Commission’s (SEC) mandate
for climate disclosures by publicly held banks, pointing to a point made in its 2022 comment letter on the matter, arguing that it could
drive many SEC-registered community banks away from the public capital markets.
ACU opposes ‘misguided’ credit card late fee rule
America’s Credit Unions (ACU) President and CEO Jim Nussle wrote
to the FSC regarding his organization’s stance on the CFPB’s credit card late
fee rule.
“The CFPB’s misguided final rule on credit card late fees
clearly demonstrates a misunderstanding of how credit cards work,” he wrote.
Nussle also referred to the safe harbor as arbitrary,
unlikely to reduce consumer debt and claimed it would have a disproportionate
impact on low-to-moderate-income borrowers by “limiting the availability of
safe and affordable products because credit unions and other institutions will
be forced to make difficult decisions about their offerings.”
Nussle previously called the rule “laughable” in a blog
post published to the ACU’s website in March.
MBA praises FHA multifamily loan policy updates
The Mortgage Bankers Association (MBA) expressed support for
recent updates to the Department of Housing and Urban Development’s (HUD) wind
and named storm policy for Federal Housing Administration (FHA) multifamily
loans.
“Multifamily property insurance availability and
affordability is becoming a significant hurdle to increasing rental housing
supply, and we have advocated strongly for reforms to the FHA-Insured
Multifamily Program to meet the urgent need for affordable housing,” MBA
President and CEO Bob Broeksmit said in a statement. “Increasing the maximum
deductible level on new deals is a good start that will help reduce financing
costs and make it easier for borrowers to obtain adequate insurance
coverage. However, HUD must extend this policy change to existing
properties immediately.”