Weekly RoundUp
March 7, 2024

CFPB Issues Guidance Regarding Comparison-Shopping Results for Credit Cards and Other Financial Products

In this Issue. The Consumer Financial Protection Bureau (CFPB) issued guidance regarding comparison-shopping results for credit cards and other financial products, and capped credit card late fees. These and other developments are discussed in more detail below.

Regulatory Developments

CFPB Issues Guidance Regarding Comparison-Shopping Results for Credit Cards and Other Financial Products

On February 29, the CFPB issued a circular to law enforcement agencies and regulators, explaining how digital comparison-shopping tools, which allow consumers to compare financial products, and lead generators, who help connect consumers to lenders, may violate the Dodd-Frank Act’s prohibition on unfair, deceptive, or abusive acts or practices by representing that they are acting in a consumer’s best interest, or otherwise taking unreasonable advantage of a consumer’s trust, while steering consumers toward financial products or services for which the digital comparison-shopping tool or lead generator receives a kickback – for example, presenting certain products as a “match” or “featured” to consumers in exchange for a kickback. While the CFPB previously issued guidance for mortgage kickbacks, this new circular addresses kickbacks in relation to other financial products and services, including credit cards.

The CFPB is working to ensure that digital advertisements for financial products are not disguised as unbiased and objective advice.

‒ Rohit Chopra, Director, Consumer Financial Protection Bureau

CFPB Caps Credit Card Late Fees, Lowers Typical Fee from $32 to $8

On March 5, the CFPB issued a final rule amending Regulation Z, which implements the Truth in Lending Act, to require credit card issuers with 1 million or more open accounts to reduce their maximum late fee to $8 or justify a higher amount by demonstrating the need to charge more to cover actual collection costs. The rule also removes automatic annual inflation adjustment for late fees. The rule does not change a credit card issuer’s ability to raise interest rates, reduce credit lines, and take other actions to deter consumers from paying late.

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