CFPB will offer unbiased data for comparing credit cards, Chopra says

WASHINGTON — Consumer Financial Protection Bureau Director Rohit Chopra says his agency will soon provide neutral data on credit card pricing that third-party websites can use to help consumers get the best deals on their cards. 

"This will be free, and you will not have to give a kickback to be included in this dataset," he said. "We expect to have more to share on that in the coming months."

Speaking on Tuesday at the Consumer Bankers Association's annual conference, Chopra covered a number of the CFPB's existing and planned initiatives to promote fairness and competition in the credit card industry. 

The data announcement comes roughly a month after the CFPB issued guidance to law enforcement and regulators about credit-comparison websites. It said many of these sites may be breaking the law when they portray themselves as neutral information providers yet take kickbacks in exchange for steering consumers toward certain lenders.

Another priority for Chopra, he said, is ensuring credit issuers actually deliver the rewards and benefits they advertise to entice new borrowers. 

"We want to make sure that providers and their partners are not using bait and switch tactics when it comes to the reward programs," he said. "Major providers who must offset the upfront costs of offering these rewards often vary in their terms and conditions … and can revoke reward offerings or make redemption of rewards more difficult."

The agency's actions against Bank of America in July 2023 — which resulted in BofA paying a $90 million penalty to the CFPB — included charges that the bank withheld credit card rewards it had explicitly promised to customers. 

Chopra also touched on a proposed rulemaking his agency issued in October that would require banks to let customers share their transaction data with other providers through digital interfaces. This so-called open-banking plan — pursuant to section 1033 of the Consumer Financial Protection Act of 2010 — would allow consumers to more easily switch credit providers while maintaining control of their financial data, similar to how cellphone users can switch carriers while maintaining their phone number.

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Under the rule, "[consumers] can share that data with the provider they want and the provider will be able to underwrite better, refinance more easily and give people a product that meets their needs," Chopra said. "I think the rule will also allow consumers to more easily walk away from those who are providing them service that is not up to snuff and itself gives a fresh incentive for companies to treat consumers really, really well."

Chopra later touched on a final rule that would cap late fees issued by the largest credit card providers — those with over one million open accounts —  to $8. The rule allows issuers to circumvent this cap if they can demonstrate higher fees are necessary for them to cover their actual cost of collection. 

Business interests and industry trade groups — including the CBA — have challenged the rule in court utilizing a frequently cited procedural legal hook. As with the bank industry's challenge to other regulation from the Biden administration's bank regulators, the suit alleges the CFPB's cap is arbitrary and that the rule did not provide enough justification for it.

Speaking to one of the very organizations challenging his agency's late-fee rule, Chopra said his agency will vigorously defend the rule in court.  

"We need to be able to show American consumers that the banking system is as essential to our economy as the electric grid, the telecommunication system and the roads that we drive on," he said. "All of you in the banking industry should want to make sure that people with credit cards have a good experience."