Credit and Prepaid Card News
The latest news on the credit card and prepaid card industry from the Center for Responsible Lending.
- FTC Tussles With a Florida Telemarketer -- Again
Cleveland Plain Dealer (OH) 10 Sep 2013
Brett Fisher, whom the Federal Trade Commission (FTC) has just hit with a $25 million penalty for preying on consumers, is no stranger to the agency. It previously sued the Florida man and his company at the time, Group One Networks, over an advance-fee credit card scheme. A January 2010 settlement drew a $17 million fine -- of which the defendant was able to pay only $21,000 -- and prevented Fisher, among other restrictions, from marketing interest-rate reduction services. Undeterred by his legal loss, Fisher reportedly launched a new scheme almost immediately.
- Regulators Ramping Up Fair Lending Enforcement
Credit Union Times 09 Sep 2013
With the National Credit Union Administration and the Consumer Financial Protection Bureau (CFPB) zeroing in on Fair Lending laws and Home Mortgage Disclosure Act (HMDA) data collection this year, credit unions can expect to see additional rules and exams in 2014.
- A Secret That Credit Card Companies Don't Want Pa. Debtors to Know
Johnstown Tribune-Democrat 02 Sep 2013
Under Pennsylvania law, credit card companies must take action on a debt within four years. After that, the law dictates, the debt is no longer collectible. State Rep. Pete Daley (D-Allegheny) has proposed legislation that would force collection agencies to tell consumers if the debt they are pursuing is too old to legally claim and also would require the agencies to put in writing the amount they claim the consumer owes.
- Many Customers Don’t Understand Their Credit Card Rewards
Credit.com 28 Aug 2013
More than one-third of credit card users are either unaware of the benefits connected with their cards or do not completely understand them, according to the J.D. Power 2013 U.S. Credit Card Satisfaction Study.
- Zero Worship: Credit-Card Firms Compete With No-Interest Transfers
Wall Street Journal 27 Aug 2013
U.S. credit card companies, eager for new customers, are flooding mailboxes and email inboxes with offers that allow new cardholders to transfer their existing card balances from other institutions with zero interest for up to two years.
- Direct Mail Offers for Credit Cards Are on the Rise
Pittsburgh Post-Gazette 26 Aug 2013
Direct-mail solicitations from credit card issuers are on the rise this year, up by 22 percent through June compared with the same stretch of 2012, according to the market research company Mintel.
- Many Americans Don't Understand Fine Print of Credit Cards
Los Angeles Times 22 Aug 2013
A J.D. Power survey of 14,000 credit card users found that just 47 percent of those polled completely understand their credit card terms, and only 59 percent completely understand their cards' reward programs
- Ranking the States: Credit Card Debt
Washington Post 20 Aug 2013
Data compiled by credit rating agency TransUnion shows that Alaska has the highest rate of credit card debt in the United States, owing an average of $6,910 -- nearly $2,000 more than the national average.
- Credit Card Debt and Overdue Payments Both Low
Associated Press 14 Aug 2013
American consumers are doing a better job of paying their credit card bills on time, bringing the rate of late payments to the lowest level since 1994, according to credit reporting agency TransUnion.
- First Horizon, Sovereign Bank Introduce Simplified Fee Disclosures
American Banker 02 Aug 2013
Sovereign Bank in Boston and the First Tennessee unit of Memphis-based First Horizon National have joined more than 20 rival institutions in making it easier for customers to understand the terms and fees on their checking accounts. Both banks were near the bottom of Pew Charitable Trusts' ratings last week of account disclosures; but both have now adopted Pew's model, plain-language disclosure practices.
- CRL Report Targets Bank, CU Overdraft Fees
Credit Union Times 01 Aug 2013
Banks and credit unions are still charging abusive overdraft fees, the Center for Responsible Lending (CRL) declares in its report, “High Cost Overdraft Practices.” In 2010, the FDIC suggested to financial institutions that more than six overdraft charges per year is excessive.
- Judge Rejects Fed’s Cap on Debit Card Fees
New York Times DealBook Blog 31 Jul 2013
Richard J. Leon, a district court judge in Washington, has ruled that the Federal Reserve failed to follow lawmakers' intention of capping fees that banks earn from consumers' use of debit cards.
- Blog: Over a Million Are Denied Bank Accounts for Past Errors
New York Times 30 Jul 2013
Institutions like Bank of America, Citibank, and Wells Fargo insist that the use of databases that record individuals' banking mistakes, such as bounced checks or minor overdrafts, help them weed out risky customers and fight fraud.
- ATM Misusers Get Most Bang for Overdraft Fee Bucks
NorthJersey.com 29 Jul 2013
A new study commissioned by the Center for Responsible Lending (CRL) examined data from 2011 to see how banks apply overdraft fees to various types of transactions. Overdrafts from debit card purchases generated a median fee of $1.75 for every dollar overdrawn.
- Credit Card Delinquencies Reach 18-Year Low
CNN Money 02 Apr 2013
Delinquencies on credit cards issued by banks hit the lowest point in 18 years after plummeting to 2.47 percent in the fourth quarter, reports the American Bankers Association (ABA). The decline throughout 2012 sends a signal that consumers are attempting to get debt under control...
- Credit Card Users Smarten Up
U.S. News & World Report 13 Mar 2013
Americans are becoming more thrifty, according to new data from rating agency Fitch. The share of delinquent accounts is at the lowest level since 1991, with more credit card borrowers paying off their balance in full each month and fewer carrying a balance. The typical credit card charge-off rate peaked at 11.4 percent in early 2010 but began to fall abruptly by 2011. The Federal Reserve recently reported that the total number of credit card accounts fell from nearly 500 million in 2008 to 380 million now. Two area where Americans are not deleveraging are student loans and federal debt. Total student loan balances are nearly $1 trillion, with default rates exceeding any other type of debt. Americans' savings rates also continue to decline.
- Capital One to Refund $150 Million to Credit Card Customers
Los Angeles Times 18 Jul 2012
In the Consumer Financial Protection Bureau's first major enforcement action since the agency went live last July, it has ordered Capital One Bank to refund $140 million to credit card consumers for questionable marketing of add-on products. At the same time, the federal Office of the Comptroller of the Currency hit Capital One with its own $10 million consent order tied to unfair billing practices from May 2002 to June 2011, for total refunds of $150 million. Additionally, Capital One must pay $60 million combined in civil penalties for the practices. CFPB director Richard Cordray said the bank's call center operators tricked customers with low credit scores or credit limits into buying "products they didn't understand, didn't want, or in some cases, couldn't even use" -- such as payment protection and credit monitoring -- when they activated their credit cards. As part of the consent orders, Capital One has agreed to refund the full amount of add-on products, plus interest, to customers who enrolled in them or tried unsuccessfully to cancel them on or after Aug. 1, 2010. Finance charges and other associated fees will be refunded as well. "We are putting companies on notice that these deceptive practices are against the law and will not be tolerated," Cordray declared.
- Prepaid Debit Cards Scrutinized by Regulators
Raleigh News & Observer (NC) 19 May 2012
As free checking accounts become more scarce, prepaid debit cards are taking the spotlight. The reloadable cards have been one of the fastest-growing bank products for years as lower-income customers look to avoid overdraft charges and fees. According to a new survey by the National Foundation for Consumer Credit Counseling, there are currently more than 30 million Americans using such cards. Adam Rust of Reinvestment Partners said approximately $300 billion was put on the prepaid cards last year, up from $30 billion in 2006. However, many say the cards carry high fees of their own. Now, the Consumer Financial Protection Bureau (CFPB) is getting involved. The agency recently announced that it will hold a hearing about the cards in Durham, N.C. It is seeking consumer feedback. Those in attendance will include CFPB director Richard Cordray and Martin Eakes with the Center for Responsible Lending.
- Returning Veterans Can Lower Credit Card Interest Rates
KSTP Eyewitness News ABC 5 (Minnesota) 16 May 2012
Although not widely known, the 2003 Servicemembers Civil Relief Act (SCRA) offers valuable protections for current and past members of the U.S. military. Under it, deployed veterans can serve out their missions overseas without worrying about finances. For example, the law prevents banks from foreclosing on veterans who are deployed. This applies not only during the active-duty period but also for nine months after. During this time, creditors cannot foreclose or repossess items from veterans without a court order allowing them to do so. The SCRA also caps loan interest rates at 6 percent while enlisted persons are on active duty, a limit that also applies to credit cards, auto loans, and business financing. Veterans who send a letter to lenders to request the 6 percent cap, within 180 days of coming home, are entitled to a credit or refund if their loan is fully paid.