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Table of Contents

Lead Story

Closing the door to backdoor breaches

News

Industry Update

Verizon study calls for improved PCI security

Marketplace Fairness Act to even score online, offline

Congressional payments caucus a positive for industry

CFPB takes on consumer lenders, card market

Transact 15 highlights global trends in payments

Features

Countering affiliate, aggregation fraud

Selling Prepaid

Innovation in gift card exchanges

Views

NACHA seeks seat at mobile payments tabl

Patti Murphy
ProScribes Inc

Mobilizing the sales force

What Sweden can teach us about the future of payments

Kirsty Tull
BillPro

Education

Street SmartsSM:
Let's share stories, grow our businesses together

Jeffrey I. Shavitz
Charge Card Systems

Exiting your business

Vicki M. Daughdrill
Small Business Resources LLC

Apple Pay & Samsung Pay Contrast

Differentiate and build trust to stand out

Jeff Fortney
Clearent LLC

Oral promises and ISO contracts

Adam Atlas
Attorney at Law

Company Profile

Field Guide Enterprises

New Products

All-in-One Mobile POS app

PayStand
PayStand

Remote device management for IoT era

SUSIAccess 3.0
AdvanPOS Technology Co., Ltd.

Inspiration

Let go or get dragged

Departments

Readers Speak

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

April 13, 2015  •  Issue 15:04:01

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CFPB takes on consumer lenders, card market

The Consumer Financial Protection Bureau wants to get a better fix on the market for credit cards. On March 17, 2015, the agency issued a request for public comments on how the credit card market is functioning and the impact of credit card regulations on both consumers and card issuers. The request came on the heels of a report to Congress in which the CFPB blasted banks and other service providers for hamstringing consumers when it comes to seeking relief for disputed transactions. "Tens of millions of consumers are covered by arbitration clauses, but few know about them or understand their impact," said CFPB Director Richard Cordray.

Mandatory arbitration limits consumer remedies

Arbitration is a method for resolving disputes outside the court system. According to the CFPB's research, in recent years many contracts for consumer financial products and services have included "pre-dispute arbitration clauses" stating that either party can require that disputes be resolved through arbitration instead of the court system. Where such clauses exist, either party can block lawsuits, including class actions, from proceeding in court.

The 2010 Dodd-Frank Act addressed the issue by prohibiting pre-dispute arbitration clauses in mortgage loan agreements. The law also tasked the CFPB with undertaking a study of pre-dispute arbitration clauses in other consumer finance markets and issuing regulations on their use if the study finds problems.

These are several problems highlighted in the CFPB's report titled Arbitration Study: Report to Congress, pursuant to Dodd-Frank Wall Street Reform and Consumer Protection Act Section 1028(a):

The report is available at http://files.consumerfinance.gov/f/201503_cfpb_arbitration-study-report-to-congress-2015.pdf.

Getting to know the card market

The March 17 request by the CFPB is part of an ongoing series of studies mandated by Congress under the CARD Act of 2009. The Bureau said comments received will contribute to a report scheduled to be delivered to Congress later this year.

The CFPB said it wants comments from all stakeholders about how they believe the card market is functioning and what passage of the CARD Act has or has not done for consumers. Specific areas of inquiry include:

"With today's inquiry, the Bureau is seeking to further understand how the credit card market is working in practice and how credit card protections affect consumers and credit card issuers," Cordray stated when introducing the request for comment. "As we undertake this review, the Bureau wants to ensure it understands the information that consumers, industry, advocates and other stakeholders believe is most relevant."

The CFBP's request for comment is at http://files.consumerfinance.gov/f/201503_cfpb_card-act-report-rfi.pdf.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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