CFPB Targets Credit Card ‘Suppressed Data’ Practices

The Consumer Financial Protection Bureau (CFPB) announced on Wednesday, May 25 in a blog post that it has sent letters to the nation’s biggest credit card companies to question them about why they are not regularly providing data to credit bureaus on the actual monthly payments their borrowers are making.

According to the CFPB’s research, only about half of the largest credit card companies contribute data to credit reporting companies about the exact monthly payment amounts made by borrowers. The same research also showed that over a short period of time, several of the largest credit card companies began to suppress actual payment amount information that they had previously provided or furnished about consumers.

For the agency, this practice of suppressing payment data has potential for harm as it may impact consumers’ ability to access credit at the most competitive rates. The CFPB explains how consumers rely on this data to receive competitively-priced credit based on their ability to manage and repay their credit obligations. By suppressing payment amount data, lenders’ ability to competitively underwrite credit may also be hindered.

In a letter to the CEOs of J.P. Morgan Chase, Citibank, Bank of America, Capital One, Discover and American Express, — note that credit card networks like Visa and Mastercard may not be among the recipients of these letters — the CFPB is questioning them about these practices and the reasons to change their policies.

The agency poses five questions seeking information about why the company may have provided payment data since 2012 and no longer does — or, if it has never regularly or consistently furnished data since 2012, to explain the “rationale” for that practice.

The last question is more forward-looking, and it could provide some information about the reasons why the agency is asking these questions. The CFPB wants to know if these companies have plans to start furnishing actual payment amount information, and how quickly and accurately they could furnish it.

“Today, the practice of withholding information about consumer credit card payments is even more out of step with market and regulatory trends,” said the agency in the blog.

The CFPB has provided 30 days for the companies to answer in writing. These letters are not either an official probe or a supervisory request — thus, answering these questions is not mandatory. However, the information provided, while being confidential, will be used to support the agency’s ongoing market and policy planning. The Bureau does not provide more information about what “policy planning” means in this context, but CFPB Director Rohit Chopra has made clear in several public statements that credit card fees and other matters related to credit cards are a priority for the agency.

Read More: CFPB’s Chopra Hints at Credit Card Rule Changes in Congress Hearing

One of the latest public testimonies from Chopra on credit card fees was before the Congress in April where he provided information about the “junk fee” investigation. Furthermore, the CFPB director said that credit card fees were a priority for the agency, and he ordered his staff to look at whether the agency can reopen the CARD Act rules to see if any change is needed. “Certainly, late fees are an area that I expect to be questions where we will solicit input on because it is important that this market is competitive,” Chopra said.