- The Consumer Financial Protection Bureau aims to revamp how it collects credit card data to “spur competition” and empower consumers as they weigh which credit cards to apply for, the agency said late last week.
- Among the changes the CFPB is considering making to its Terms of Credit Card Plans Survey — which collects data from issuers on their credit card plans — one would be compelling “the top 25 card issuers to submit data on each of their general purpose credit cards,” the bureau said in an Aug. 19 blog post. Currently, each big issuer only shares information for their card that has the largest number of customers and involves a network like Visa or Mastercard.
- Other potential changes include requiring issuers to provide median annual percentage rates by credit score tiers, collecting information on credit cards that are geared toward specific groups and allowing more entities to participate in the survey, the CFPB said in the post. The agency is seeking public input on the potential changes to the survey until Oct. 17.
Since 2011, the bureau has been charged with gathering credit card price and availability data from a sample of issuers and sharing that information with the public, it noted in the blog post. About 150 issuers submit information related to their largest credit card plans through the CFPB’s semi-annual TCCP Survey, and the agency publishes a report on its findings.
By expanding the scope of the information gathered from those large card issuers, the bureau said it seeks “to help people make choices on which credit cards fit their unique needs, rather than only major issuers’ largest cards.”
The largest issuers — which dominate the credit card market — have dozens of card offerings, each with various rates, fees and rewards, the CFPB noted.
Based on purchase volumes, JPMorgan Chase, American Express, Citicorp, Capital One and Bank of America were the biggest issuers of general purpose credit cards last year, according to industry publication The Nilson Report. The biggest card networks over which transactions flow are operated by Visa and Mastercard. All of these major players are under increasing scrutiny by the federal government and some Congress members intent on injecting more competition into the industry.
The CFPB noted these potential changes to this data collection — what it deems “modernizing” — could make it easier for consumers to shop for credit cards. Currently, for example, “card issuers do not have to disclose realistic rates based on someone’s credit worthiness and instead report the midpoints of broad ranges that are often meaningless to people trying to compare cards,” the agency noted in the post.
The move is yet another indication the CFPB is stepping up its watchdog role, particularly since Director Rohit Chopra began leading the agency last fall, and the emphasis on inducing competition among issuers in the credit card market is worth noting.
Competition, an issue the Federal Trade Commission typically addresses, is something the CFPB has been sharply focused on, said Michael Guerrero, a partner at law firm Ballard Spahr who focuses on consumer protection issues and works with fintechs, large banks and card issuers, in a recent interview.