In response to a request for comment, CRL offered feedback to the Consumer Financial Protection Bureau about the agency's proposed rule addressing prepaid cards . The CFPB's proposed rule would expand consumer protections on prepaid cards in significant respects. The CRL comment focuses on credit products associated with prepaid cards – with a particular focus on overdraft fees. The CRL comment strongly urges the CFPB prohibit any overdraft charges on prepaid cards. CRL's comment supports that CFPB's proposal would apply stronger regulations to overdraft fees on prepaid cards than the wholly...
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This is CRL's comment to the CFPB in response to the Consumer Financial Protection Bureau's Request for Information Regarding Credit Card Market. In this response, CRL argues that the Credit CARD Act of 2009 has made pricing clearer without restricting credit, raising its cost or curbing the ability of card issuers to price for risk. Contrary to curbing risk-based pricing, the CARD Act encourages risk-based pricing.
Credit cards are one of the most common purchasing tools used by Americans, and total U.S. credit card debt has increased $172 billion since 2000. This doesn't mean Americans are living beyond their means--a recent study found that many low- and middle-income households rely on credit cards to pay for basic living costs or weather medical expenses and unemployment. In the past, credit card companies took advantage of this reliance on credit cards by engaging in unfair and deceptive practices. This chapter illustrates some of these abusive practices, and describes how the Credit CARD Act of...
This infographic shows the changes in the use of plastic payments, including credit cards, debit cards, and prepaid cards. To embed our infographic to your site, simply just cut and paste the code below <a href="http://www.responsiblelending.org/state-of-lending/credit-cards/growth-…" data-mce-href="http://www.responsiblelending.org/state-of-lending/credit-cards/growth-…"><img alt="Growth in Plastic Payment Methods - Infographic" src="http://www.responsiblelending.org/state-of-lending/images/growth-in-pla…...
Prepaid cards can be useful, but they carry risks as well. Use these tips to help determine the best prepaid card for you. To embed our infographic to your site, simply cut and paste the code below <a href="http://www.responsiblelending.org/state-of-lending/credit-cards/best-pr…" data-mce-href="http://www.responsiblelending.org/state-of-lending/credit-cards/best-pr…"><img alt="Prepaid Cards: Which is Best for You? - Infographic" src="http://www.responsiblelending.org/state-of-lending/images/prepaid-card-… " title="Prepaid Cards: Which is...
Credit cards are one of the most common purchasing tools used by Americans, with many households relying on credit cards to pay for basic living costs. In the past, credit card companies took advantage of this reliance by engaging in unfair and deceptive practices such as complicated pricing and high fees. This chapter describes these abusive practices and the reforms instituted by the Credit CARD Act of 2009. These reforms made credit card pricing clearer and banned many deceptive practices, without leading to higher interest rates or reduced access to credit. Read this chapter below or...
This chapter in the State of Lending report series presents a picture of the overall financial status of U.S. consumers today. It is based on data from the Consumer Expenditure survey, the Survey of Consumer Finances, and other national data sources. These sources reveal that, since 2000, American families have faced declining real incomes,a higher cost of living, greater debt levels, and declining asset values and wealth. Rebuilding the tenuous balance sheets of American households will require access to safe and affordable credit, along with strong protections to prevent predatory lending...
Prepaid cards are an important new financial product that holds the promise of expanding access to modern electronic transactions to millions of consumers. However, prepaid cards lack consumer protections and some have features that expose consumers to unnecessary dangers. The most important step that the CFPB can take to ensure that prepaid cards fulfill their promise, and to prevent unfair, deceptive or abusive practices, is to ensure that prepaid cards are true to their essence as a prepaid transaction product. Overdraft and credit features must be prohibited on prepaid cards.
Good afternoon. The Center for Responsible Lending is a non-profit research and policy organization dedicated to protecting home-ownership and family wealth. Let's begin with the following premise: In terms of technology and hence core product costs, general purpose reloadable prepaid cards are indistinguishable from debit cards associated with checkless checking accounts. Both prepaid and debit cards must maintain a database of individual account records; both access the same payments system through a bank member of a funds transfer network such as Visa or MasterCard. Both prepaid and debit...
What hurts consumers financially also hurts business Watch report author and CRL Senior Researcher Josh Frank discuss the report findings. Read the full report >> Read the executive summary >> CRL research shows losses on credit cards in the current downturn rose faster at banks using unfair, deceptive practices. High-cost penalty fees and interest rates didn't mitigate risk—as credit card issuers claimed—but instead were the risk that pushed consumers into hardship and default. The same holds true for high-cost fees and interest banks charge for overdraft and payday loans. Reforms have ended...