Vol. 32 No. 11
November 2016
THE 2015 CARD ACT REPORT
The CFPB’s recent biennial report on the consumer credit card market, pursuant to the
CARD Act, includes data on the market and the Bureau’s concerns with certain practices
relating to credit card accounts. The authors summarize the Bureau’s data on consumer
credit card use, and the cost and availability of credit. They then turn to concerns
expressed by the Bureau relating to deferred interest products, reward programs,
readability of card agreements, and disclosures. They close with areas listed by the
Bureau for continuing study and a caution that issuers should be aware of the Bureau’s
concerns and take steps to mitigate those concerns.
By Andrew Owens and Adam Maarec *
The Credit Card Accountability Responsibility and
Disclosure Act of 2009 (the CARD Act) imposed a host
of new requirements on the issuance and operation of
credit card products.1 The law placed new restrictions
on interest rate increases, penalty fees, double-cycle
billing, and account fees chargeable in the first year after
account opening. The CARD Act also, among other
things, (i) mandates that payments be due on the same
day of each month, (ii) specifies how payments must be
allocated among account balances with different interest
rates, (iii) requires an issuer to consider a consumer’s
ability to repay debt that may be incurred prior to
opening a credit card account or increasing a credit line
(with particular scrutiny on opening an account or
increasing a credit line for a consumer under 21), and
(iv) requires disclosures on each periodic statement
regarding the repayment of an existing balance (e.g., the
cost of paying off the statement balance by making only
the minimum monthly payment each month). Following
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1
Pub. L. No. 111-24, 123 Stat. 1734 (May 22, 2009).
the issuance of the CARD Act, the Federal Reserve
Board issued a series of revisions to Regulation Z to
implement the new law.2 These changes to the
regulation of credit cards significantly altered the way
issuers offer and service credit card products.
The CARD Act requires the CFPB to conduct a
biennial report on the consumer credit card market. The
report is required to address a series of issues, including:

“the terms of credit card agreements and the
practices of credit card issuers;

“the effectiveness of disclosure of terms, fees, and
other expenses of credit card plans;
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2
74 Fed. Reg. 36077 (July 22, 2009); 74 Fed. Reg. 41194
(August 14, 2009); 75 Fed. Reg. 7658 (February 22, 2010); 75
Fed. Reg. 7925 (February 22, 2010); 75 Fed. Reg. 58480
(September 24, 2010); 76 Fed. Reg. 18354 (April 4, 2011); and
76 Fed. Reg. 22948 (April 25, 2011).

ANDREW OWENS is a partner at Davis Wright Tremaine LLP
in New York. ADAM MAAREC is an associate in the
Washington, D. C. office of the same firm. Their e-mail addresses
are [email protected] and [email protected].
November 2016
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