CFPB Proposes Narrowing Application of Credit Card Fee Limit
On April 12, the CFPB published a proposed rule that would lift the current limit on credit card fees charged prior to account opening. Under the current rule, as adopted by the Federal Reserve Board (FRB) in April 2011, card issuers are limited to charging fees up to 25 percent of the credit limit in effect when the account is opened. The FRB rule applies this fee limit prior to account opening and during the first year after account opening. The CFPB proposal would limit the application of this fee restriction to only during the first year after account opening. This proposal addresses a legal challenge to restricting the amount of fees charged prior to account opening, which resulted in a court issuing a preliminary injunction to halt the implementation of the FRBs broader application of the fee limit. The CFPB is accepting comments on the proposal through June 11, 2012.