American consumers pay about 2 percentage points less on credit card finance charges than before the enactment of the Credit CARD Act, according to a report issued by the Consumer Financial Protection Bureau. In a statement to reporters, CFPB officials expressed continued concern about bank disclosures, "fee harvester" credit cards for bad credit, and add-on products. However, officials noted that the 2009 legislation had achieved many of its intended goals.
Reviewing data collected in 2008 and 2012, the CFPB confirmed that overlimit fees have been "effectively eliminated" from the credit card market. Because consumers rarely opt-in to paying fees when they exceed their credit limits, Americans paid $2.5 billion less in overlimit penalties in 2012 than they did in 2008. Many credit card issuers have even embraced the rule as part of their marketing campaigns, touting the lack of overlimit fees as a customer benefit.
The CFPB report also addressed a concern that critics of the Credit CARD Act raised during its evolution on Capitol Hill. Tighter lending rules have not significantly reduced Americans' access to revolving credit, officials said. While available credit has not yet reached the record levels reached before the 2008 financial crisis, banks still have as much as $2 trillion in unused credit ready for American consumers. CFPB explained the gap as a result of rules that require consumers to request credit line increases instead of automatically receiving extra credit from banks.
CFPB officials pointed out that the legislative changes have helped banks improve their customer satisfaction rankings. When researchers at J.D. Power released results from their annual U.S. Credit Card Satisfaction Study, they tracked the highest consumer ratings since they started their analysis in 2007. Still, officials put lenders on notice for permitted practices that generate consumer complaints, such as:
- Bad-credit credit cards that require significant processing and application fees before opening a new account, skirting the Credit CARD Act's restrictions on credit card service charges.
- Aggressive marketing of add-on services, such as debt cancellation, identity theft protection and credit monitoring programs.
- Reduced communication with customers who prefer to review bills online, bypassing the typical mode of receiving important account disclosures.
With funding from the Federal Reserve, the CFPB continued to process consumer complaints and operate educational outreach programs during October's government shutdown.