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The Consumer Financial Protection Bureau faces the task of determining how the 2009 credit card reform law has influenced the cost of credit. Its conclusions will likely offer clues to its future rulemaking and spur further clashes between bankers and consumer advocates.
January 22
Penalty fees fell 8% among credit card issuers last year, an industry consultant estimates.
The fees have declined since 2009, when Congress passed legislation that limited the ability of card issuers to impose certain charges.
That year penalty fees produced an estimated $23.9 billion. They dropped to $19.4 billion in 2011 and to $17.8 billion last year, according to data published by R.K. Hammer, a card industry consultancy.
"Year-over-year growth of penalty fees hit a wall three years ago," Bob Hammer, the firm's chief executive, said in a news release.
The 2009 reform law, known as the CARD Act, restricted the size of late fees and nearly eliminated the use of over-limit fees. The R.K Hammer estimate includes late fees, over-limit fees and fees for nonsufficient funds. It excludes the interest rates charged to borrowers.
Hammer predicted that the card industry will implement new fees as it looks for ways to make up for the lost revenue.
"We know of no card issuer not presently weighing its fee-pricing options, or implementing higher [or] new fees, where permissible," Hammer said. "Some who opt not to raise fees are looking to cement cardmember relationships and raise cardholder satisfaction."
Some card issuers have created several new fees, Hammer says. Those include fees for inactive accounts, replacement cards, paper statements and customer service calls after the customer makes a certain number of such calls in one billing cycle.
