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Financial Services Law Insights and Observations


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  • CFPB reports “all-time high” interest rate margins on credit cards

    Federal Issues

    On February 22, the CFPB released a blog post on credit card interest rates stating that the interest rate margins are at an all-time high. According to the Bureau, the margin is the difference between the average APR and the prime rate. The blog post notes that both the average APR and the margin between the average APR and the prime rate have reached record highs. Specifically, the Bureau noted that, over the last 10 years, the average APR on credit cards interest has nearly doubled from 12.9 percent in 2013 to 22.8 percent in 2023. Likewise, the average APR margin has increased from 3.3 percent in 2013 to 8.5 percent in 2023. According to the Bureau, this change has been brought on by banks and issuers who have raised their APR margins to increase profits. The CFPB noted that, although the CARD Act of 2009 kept APR margins lower throughout the 2010s, issuers began to increase the APR in 2016. The Bureau intends to take steps to ensure a fair market and to “help consumers avoid debt spirals.”

    Federal Issues Credit Cards CFPB Interest Rate APR CARD Act Debt Management

  • Mississippi passes debt management provisions

    Recently, the Mississippi governor signed HB 687, which establishes debt management services and licensing requirements. According to the bill, debt management service is defined as “[t]he receiving of money from a consumer for the purpose of distributing one or more payments to or among one or more creditors of the consumer in full or partial payment of the consumer's obligation,” among other things. A debt management service provider is “a person that provides or offers to provide to a consumer in this state any debt management services, in return for a fee or other consideration.” A debt management service provider does not include “[a]ny institution that is regulated, supervised or licensed by the department or any out-of-state institution that is insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration,” among other things. Additionally, one cannot operate as a debt management service provider with respect to consumers who are residents of this state without a license. The bill is effective July 1.

    Licensing Mississippi State Legislation Debt Management State Issues

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