United States: CFPB Releases The 2017 CARD Act Report: Early Takeaways From The New CFPB's First Report On The Consumer Credit Card Market

Yesterday, the Consumer Financial Protection Bureau ("CFPB" or "Bureau") released its biennial report on the consumer credit card market ("2017 Report" or "Report"), which summarizes its views on the state of the consumer credit card market over the past two years. The Report is particularly noteworthy because it provides the first insight into the post-Cordray CFPB's views on the state of the consumer credit card market.

The Report was issued pursuant to Section 502(a) of the CARD Act ("CARD Act"),1 which directs the CFPB to review and report on the consumer credit card market. The CARD Act requires the CFPB's report to review certain specific topics, including terms of credit card agreements and issuer practices, the effectiveness of disclosures, the adequacy of consumer protections, and whether the CARD Act has impacted any of these areas. Prior CARD Act reports also have addressed other market developments, and the 2017 Report continues this trend.

The 2017 Report is informed by public responses to the Bureau's March 2017 request for information ("RFI"),2as well as a number of other data sources, including data from the Bureau's Consumer Credit Panel and de-identified data collected by the Federal Reserve Board from bank holding companies.

In contrast with prior CARD Act reports, the 2017 Report is more neutral in tone and does not identify supervisory or enforcement priorities, specify CFPB policy, or list "areas of potential concern."3In general, the 2017 Report states that "[t]he quantitative and qualitative indicators outlined generally suggest a positive picture for consumers in the credit card market." The 2017 Report provides in-depth analyses on several of the "deep-dive" topics introduced in the 2015 Report, as well as two new topics affecting the credit card market: products developed for consumers with "non-prime" credit scores and third-party credit card comparison ("TPC") websites.

This alert highlights a few early takeaways from the 2017 Report. We will continue to unpack the 350+ page report—the 2017 Report is the longest CARD Act report to date—and will follow up with a more detailed analysis the coming days.


  • Cost and Availability of Credit. The Report finds that the cost of card credit has remained stable since 2015; however, the Bureau noted the cost increase for variable rate accounts due to increases in the index rate. Despite indicating that credit availability is difficult to measure, the 2017 Report states that "credit availability is significant and increasing." According to the Bureau, steady increases in the number of accounts originated and the volume of credit originated on those accounts indicate an increase in the availability of credit.
  • Credit Card Issuer Practices. The 2017 Report analyzes select credit card issuer practices that the CFPB had not focused on in earlier CARD Act reports. For example, the 2017 Report finds that digital account servicing platforms have increased, and a majority of consumers are enrolled in online servicing portals. The Report also analyzes consumer credit score access, and states that financial service providers "have made credit scores and related information regularly available to their customers," and that credit card issuers were among "the most prominent class of providers doing so."
The Bureau also looks at whether credit cards have become more or less complicated over time. The Bureau states that its analysis "does not evaluate complication, but simply seeks to track the metric over time." (Emphasis in original.) The Report concludes that the evidence "offers support for a hypothesis of slight but still real declines in how complicated credit card products are," while acknowledging the limitations of its methodology.
  • Products Marketed to Non-Prime Borrowers. Products marketed to "non-prime borrowers" are another new area of CFPB study in the 2017 Report. The Report states that, because non-prime borrowers have difficulty obtaining certain credit products, a new market for such consumers wishing to obtain credit products has emerged. Consistent with the tone of the rest of the Report, the Bureau does not take a position on whether products marketed to "non-prime borrowers" raise policy issues. Instead, the CFPB describes several features of this market, including that (i) non-prime borrowers hold more of their outstanding balances on private-label credit cards, which are more accessible to these consumers; (ii) the share of the market for secured credit cards, which help such consumers build credit, is growing; and (iii) issuers may be putting increasing weight on credit line management as a risk control mechanism. In fact, the Bureau's report indicates that such products may be beneficial to those with non-prime credit scores, since products such as secured credit cards present lower risk of default.
  • Third-Party Comparison Sites. The 2017 Report also takes a "deep dive" into TPC sites, which are neither owned nor operated by credit card issuers. The Report finds that these TPC sites have "ballooned in their aggregate effect on the market," as issuers have paid these sites more than $1 billion for credit card approvals in 2016. The Report describes the utility of TPC sites, including decreased issuer risk when investing in marketing; increased issuer branding and relationship development with consumers; and the ability for consumers to obtain more information about multiple credit card products at once (as opposed to lead generation products).
  • Deferred Interest Products. The 2015 Report took a critical look at deferred interest products, citing such products as "the most glaring exception" to the general post-CARD Act trend toward upfront credit card pricing. In contrast, the 2017 Report finds that deferred interest promotions "benefit consumers who pay their promotional balance in full within the promotional period," while being "more costly for consumers who do not." The 2017 Report notes that the aggregate amount of deferred interest assessed to consumers increased by 10 percent from 2015 to 2016.
  • Debt Collection. The 2015 Report pointed to the substantial risks inherent in debt collection and cited to the fact that it received more than 88,000 complaints from consumers about debt collection in 2014. The 2017 Report describes issuers' debt collection efforts, whether in-house or by first-party or third-party collectors. The Report includes a review of the market and how issuer collection practices have evolved since the implementation of the CARD Act but does not call for regulation of either third-party or first-party collections activities.
  • Product Innovation. The 2017 Report also addresses new product innovations. For example, the Report notes that the adoption of EMV chip cards in the credit card industry reduced counterfeit fraud by roughly 58 percent, while card-not-present instances of fraud have increased, particularly with respect to online transactions. The Report also reviews innovations that that allow consumers to store and access payment information on mobile devices; the continued growth of emerging lending products, such as fintech personal loans and point-of-sale loans; and card controls that can help consumers manage their spending and lower the likelihood of fraudulent transactions.
  • Rewards Programs. The 2015 Report identified potential areas of concern related to rewards programs, specifically with respect to disclosures, rewards costs, and the timing of rewards disbursement. The Bureau's discussion of rewards programs in the 2017 Report is limited to describing developments in rewards programs and market behavior.


Prior CARD Act Reports have identified supervisory or enforcement priorities in the credit card market or signaled policy direction. The 2017 Report departs from this approach, reporting on market developments rather than signaling policy or otherwise making recommendations for the credit card market.

We expect to provide a more detailed analysis in the coming days.


1 15 U.S.C. § 1616(a).

2 See our alert on the RFI here.

3 See our earlier summaries of the Bureau's initial 2013 CARD Act Report ("2013 Report") and subsequent 2015 CARD Act Report ("2015 Report").

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions