CFPB Plans to Revisit the CARD Act, Older Regulations: Chopra

Source: American Banker

Consumer Financial Protection Bureau Director Rohit Chopra told lawmakers Wednesday that the bureau plans to revisit and update older regulations such as the Credit Card Accountability Responsibility and Disclosure Act, known as the CARD Act, to lower credit card fees.

Chopra announced the move at a hearing of the House Financial Services Committee, where he fielded tough questions about the bureau’s plans to collect data on small business loans, crack down on so-called junk fees and address fraud in payment networks.

“We want to make sure that credit cards are a competitive market ... [so] I am asking the [CFPB] staff to look at whether we should reopen the Card Act rules that were promulgated by the Federal Reserve Board over 10 years ago, to be able to look at some of these older rules we inherited, to determine whether there needs to be any changes,” Chopra said.

During a nearly four-hour hearing, lawmakers on both sides of the aisle questioned Chopra on a range of meaty topics including how the CFPB and Congress should deal with fairness in lending algorithms, and if the bureau plans to address scams in peer-to-peer payment networks such as Zelle, which is owned by the seven largest banks.

Several Republican lawmakers pressed Chopra to make changes to the CFPB’s upcoming data collection rule. The CFPB is under a court order to complete a small business data collection rulemaking, which been a decade in the making dating to section 1071 of the Dodd-Frank Act.

Rep. Andy Barr, R-Ky., said community banks in his district have threatened to stop lending to small businesses because of the potential regulatory burdens imposed by the data collection.

Barr and others asked Chopra to exempt small banks from the rule by specifically raising the proposal's loan threshold that would require lenders originating 25 or more small-business loans a year, over a two-year period, to report data on credit applicants, including businesses owned by women and minorities.