The Credit Card Accountability, Responsibility and Disclosure Act has been in place for some time now, but there have been many regulatory changes made since it was first put into effect. Those issues, plus others, have a number of major financial institutions saying they’re still struggling to remain in compliance with the consumer protection law’s rules.
At a recent panel at the FICO World conference, several people from the financial industry talked at length about their difficulties in keeping up with federal regulatory changes related to the Credit CARD Act since the law was first passed in 2009, according to a report from FICO’s Banking Analytics Blog. Perhaps the largest of these issues is that the rules designed to protect consumers are constantly being updated by regulators including the Consumer Financial Protection Bureau, which issued two new amendments to those mandates within just a few days of the conference beginning.
However, it should be noted that one of these changes was actually designed to help the card-issuing industry, the report said. It allowed a little more leeway for lending to those over the age of 21, specifically where their abilities to consider income to which they might be expected to have reasonable access, related to an issue for stay-at-home spouses who might have otherwise not been able to get cards in their own names because they didn’t have sufficient personal income. The other regulatory change was related to fee disclosures.
Moreover, though, lenders also say that they’re having difficulties getting their income estimation tools to stay within the lines laid out by regulators, the report said. Instead, the companies say they want to have the ability to simply grant consumers credit cards without determining their salary or other assets as a means of seeing whether they could afford the account in question. To this point, no income calculators submitted to the CFPB have received approval.
The Credit CARD Act put into place a number of rules designed to help shield consumers from racking up a significant amount of credit card debt beyond what they spend. The law reduced fees, and changed the ways in which lenders could alter interest rates on existing accounts, all of which has likely helped consumers to go about the business of getting their credit card debt under control in the last few years.