LowCards.com Weekly Credit Card Update–September 20, 2013
CFPB’s Data Mining of Credit Card Data Challenged in Heated House Hearing
Consumer Financial Protection Bureau officials are seeking to monitor four out of every five U.S. consumer credit card transactions this year–up to 42 billion transactions–through a controversial data-mining program. CFPB Director Richard Cordray defended the data-mining practice and said his agency is monitoring credit card usage at 110 banks, including Morgan Chase, Bank of America, Capital One, Discover and American Express. Story by Richard Pollock for the Washington Examiner.
JPMorgan Chase to Refund $309 Million for Illegal Credit Card Activity
The CFPB announced that JPMorgan Chase must refund $309 million to credit card customers that were improperly billed for add-on products. Many of the 2.1 million cardholders were billed for services they never received. These add-on products included identity theft protection and fraud monitoring. In addition to the $309 million in refunds to cardholders, JPMorgan Chase must also pay fines of $60 million to the Office of the Comptroller of the Currency as well as $20 million to the CFPB’s Civil Penalty Fund. Story by Bill Hardekopf for LowCards.com.
Banks Probe Regulatory Limits of Credit Card Add-Ons
Three leading banks are testing the bounds of controversial credit card add-on services, even as the government gears up for a second round of related crackdowns on the products. American Express, Wells Fargo and Citigroup appear to be testing how much wiggle room regulators have left them in the lucrative but oft-criticized business. In continuing to sell the add-ons, AmEx, Wells and Citi appear to be betting that the government will remain focused on marketing practices rather than on the products’ underlying utility and pricing. It’s a gamble that could pay off. Story by Maria Aspan and Victoria Finkle for American Banker.
Government Can’t Force Employees to Get Pay Via Debit Cards
Federal regulators say companies cannot require employees to only receive their pay on debit cards, citing complaints from workers of high and unexpected fees on the cards. The agency said that by law, workers must be able to choose how they receive their wages. If they pick payment with payroll cards, they are entitled to protections such as disclosure of fees. Story by the Associated Press.
Fed Stays the Course on Easy Money
After two days of deliberations, Federal Reserve officials decided Wednesday the economy hadn’t lived up to their expectations for growth. Fed officials voted to keep short-term interest rates near zero, where they have been pinned since late 2008. Story by Jon Hilsenrath and Victoria McGrane for the Wall Street Journal.
Progress on Predatory Lending
Payday loans have long been huge financial traps for cash-strapped, low-income borrowers. Several states have tightened regulations to clamp down on these “quick fix” loans, but more than half the states offer little or no protection from unscrupulous payday lenders. It could force lenders to verify the borrower’s ability to repay before a loan is made. Editorial in the New York Times.
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.39 percent, slightly lower than last week’s 14.40 percent. Six months ago, the average was 14.30 percent. One year ago, the average was 14.32 percent.