WASHINGTON–CUNA and NAFCU have joined with the Bank Policy Institute, American Bankers Association and the Consumer Bankers Association in calling on the Consumer Financial Protection Bureau to rethink its proposed rules around credit card penalty fees.
Noting the proposed rulemaking would, among other changes, reduce the credit card late fee safe harbor to $8 from its current levels of $30 for a first violation and $41 for a subsequent violation within the next six billing cycles.
“In support of that dramatic reduction and other proposed changes, the Bureau relies extensively on data from the Federal Reserve Board’s Y-14M data collection and other ‘[i]nformation provided in response to a series of data filing orders made to several industry participants, comprised of two distinct sets’ and refers repeatedly to analyses it conducted using such data,” the letter states. “We support regulatory efforts to promote transparency, consumer choice and competition in the markets for financial products and services, and we intend to comment on the Bureau’s NPR. Yet the Bureau has not released to the public the underlying data and empirical analysis on which the Bureau relies. The Associations understand that releasing the Y-14M data and other data on which the Bureau has relied may raise confidentiality concerns.”
‘Virtually Impossible’
The financial trade groups are requesting the Bureau release such data in a manner that is “anonymized and/or aggregated to the extent necessary to protect confidential bank information.”
“Without this information, it is virtually impossible to understand or replicate the analysis in any meaningful way, significantly hindering the public’s ability to provide thoughtful input,” the letter continues. “The Bureau’s decision to rely on data and analysis that it has not publicly disclosed conflicts with bedrock principles of administrative law.”
The letter cites a D.C. Circuit Court decision that said it “is the agency’s duty to identify and make available technical studies and data that it has employed in reaching the decisions to propose particular rules…An agency commits serious procedural error when…it fails to reveal portions of the technical basis for a proposed rule in time to allow for meaningful commentary.”
In addition, the groups told the Bureau that to comply with its obligations and to ensure that the public has a meaningful opportunity to comment on its sweeping proposal, the CFPB must “expose” its studies and data “to refutation” in the rulemaking proceeding and must further “explain the assumptions and methodology” it used “and, if the methodology is challenged, must provide a complete analytic defense.”
‘Critical Factual Material’
“In short, the Bureau must disclose the ‘most critical factual material’ on which it relied and provide ‘further opportunity to comment’,” the letter states.