The Consumer Financial Protection Bureau is seeking comment on a proposal to revise a Federal Reserve rule limiting credit card fees issued before a borrower opens an account.
The proposal is a response to a preliminary injunction granted by a South Dakota judge last year to stop the rule from taking effect, the bureau said in a press release (
The Fed issued the rule in April as an amendment to Credit CARD Act regulations, which limited certain credit card fees to 25% of an account’s initial credit limit in the first year the account is open. The Fed rule, which has since been transferred to the bureau, would have extended the cap to fees issued before an account opening.
But on Sept. 23, Chief Judge Karen Schreier granted a motion for a preliminary injunction filed by First Premier Bank and Premier Bankcard LLC, saying the statute applied restrictions on fees only after an account had been opened.
“In order to resolve the litigation, the [bureau] is seeking comment on whether it should conform the rule to the court ruling so that it no longer applies to fees charged prior to account opening,” the agency said in a press release. “The overall 25% cap on certain credit card fees charged during the first year, along with the other specific provisions of the CARD Act, would remain in place.”
The comment period ends June 11.
What do you think about this? Send us your feedback.
