Dive Brief:

• The Consumer Financial Protection Bureau has changed its semi-annual survey of credit card issuers to force disclosure of more information so consumers can better compare interest rates and other features to find the credit card that best meets their needs, the agency announced Tuesday.
• As part of the revised disclosure requirements, the CFPB presentation of data will better identify cards with lower interest rates. As part of that effort, it will require companies to disclose the range of interest rates for various credit scores and ask card issuers to share the median APR for credit score ranges.
• The agency also asked the top 25 credit card issuers to answer questions about all of their credit cards, not just their most popular credit cards. However, other institutions can submit information about multiple credit card products voluntarily, according to the press release.

Dive Insight:

The card issuers are required to report the data to the federal government twice annually under the The Fair Credit and Charge Card Disclosure Act of 1988. While the card information has historically been gathered from the 25 largest issuers and another 125 smaller institutions, the agency said it will now let other financial institutions voluntarily offer information about their card products. 

Besides helping American consumers find the best credit cards, the CFPB said it aims to help smaller credit card issuers, which typically offer lower interest rates, to connect with consumers. Ultimately, the agency’s goal is to foster greater competition in the credit card market, the press release said. 

“Given the rise in interest rates, the CFPB has modernized how it collects credit card data to spur competition and help families use products with lower rates and fees,” CFPB Director Rohit Chopra said in the release. “These improvements will also give smaller relationship banks that offer better terms and better service another way to compete against the dominant credit card companies.”

In addition to interest rates, the regulator has been calling attention to card issuers’ late fees and the industry’s credit reporting processes. Last month, the CFPB proposed an amendment to the Credit Card Accountability Responsibility and Disclosure Act of 2009 to prohibit card issuers from charging more than $8 in late fees per payment, or more than 25% of a minimum required payment. 

In a February blog post, John McNamara, the CFPB’s principal assistant director for markets, said the agency is monitoring and addressing credit card companies’ anti-competitive business practices. McNamara also pointed out credit card companies’ failure to accurately report customers’ payment data, which could prevent consumers from getting better offers on financial services.

But the CFPB isn’t the only one trying to increase competition among credit card companies. After failing to get the Credit Card Competition Act passed in 2022, Sen. Dick Durbin (D-IL) has plans to introduce the bill again this year, according to a spokesperson for the lawmaker. The bill would increase merchant access to card networks besides the dominant Visa and Mastercard networks for processing credit card transactions.

The bill has since drawn criticism from the National Association of Federally-Insured Credit Unions, a trade group of not-for-profit credit unions. In a Feb. 24 letter, the organization called the bill “unwarranted” and said it “represents a heavy-handed government intrusion into the credit card payments market that would hurt credit unions and consumers alike.”

As regulators and lawmakers try to rein in fees, interest rates and anti-competitive practices among card issuers, consumers are racking up record levels of credit card debt. In Q4 2022, credit card balances surged to $986 billion, exceeding the pre-pandemic peak of $927 billion, according to the Federal Reserve Bank of New York’s Center for Microeconomics Data.

Consumers under the age of 50 are experiencing higher delinquency rates than older consumers, according to an analysis from the New York Fed’s Liberty Street Economics blog.