The Consumer Credit Market: The CFPB’s 2017 CARD Act Report
The Consumer Financial Protection Bureau recently published its biennial assessment of the consumer credit card market, titled “The Consumer Credit Card Market.” This report is based in part on responses provided by market participants to the CFPB’s request for information on the consumer credit card market, which we discussed here. The CFPB’s report is required by law and provides significant data on the credit card market, including the use, costs, and availability of credit cards across the credit score spectrum. The report also assesses various issuer practices and consumer experiences in the market. In the past, the CFPB’s CARD Act reports have served as a roadmap for the agency’s areas of focus in its supervisory and enforcement activities.
Unlike the CFPB’s 2013 and 2015 CARD Act reports, the 2017 report does not specifically list “areas of concern” that might be the subject of future regulatory scrutiny. However, the CFPB notes continued prevalence of some issues raised in the 2015 report such as whether the terms and conditions for rewards programs are consistently available throughout an account lifecycle. The CFPB also noted recent upticks in delinquencies and charge-offs despite strong macro-economic indicators such as economic growth and unemployment rates (though the CFPB admits that these increases are slight and not necessarily a sign of either an average consumer’s ability to meet card payments or a revision to pre-recession underwriting norms).
The report also explores market topics, including:
- Card issuer practices, including digital account servicing and offering balance transfers;
- The cost of credit, including costs associated with variable rate cards; and
- “Deep dive” assessments of products marketed to “non-prime borrowers,” including “secured” credit cards, and the use of third-party comparison sites.