The Independent Community Bankers of America urged the CFPB on Thursday not to impose “additional regulatory burdens” on community banks, following a report by the CFPB that found the 2009 Credit CARD Act cut consumer borrowing costs and fees.
The CFPB report showed that the total cost of credit as a result of the CARD Act fell by two percent between 2008 and 2012, and that consumers paid approximately $2.5 billion less in overlimit fees.
Penalty fees also declined by $6 on average after the legislation took effect, resulting in $1.5 billion in savings for consumers.
Enacted in May 2009, the CARD Act was designed to enhance fee transparency and to establish fair credit card practices. The law prevents unexpected interest rate increases, curbs excessive fees and creates an opt-in requirement for overlimit fees.
The ICBA stressed, however, that community banks were not responsible for the actions that triggered the passage of the legislation, adding that the institutions, nevertheless, “must bear the same costs and regulatory burdens as those firms whose reckless actions triggered the additional costs and burdens.”
“Forcing community banks from the market will put consumers and our financial system at greater risk by further consolidating the credit card market into the hands of a few large issuers,” ICBA President and CEO Camden Fine said. “Such a result disenfranchises millions of consumers and limits their market choices. Minimizing new burdens on the nation’s community banks is essential to promoting economic growth and a safe, reliable and responsible source of credit.”