Washington, March 5, 2024–(BUSINESS WIRE)–James Mann and David Gossett, experienced attorneys and partners at the law firm Davis Wright Tremaine, discuss consumer concerns regarding credit card late fees. You can talk to reporters about the Financial Protection Bureau's new rules. James and David represent many of the nation's top banks, fintech companies, and financial services companies and have helped these clients identify and address their most challenging regulatory and compliance needs. .
Since leaving the Federal Reserve System in 2001, James has advised clients on how to identify and address their most difficult regulatory and compliance issues, and was instrumental in the creation of Regulation P and other significant regulatory amendments. We have cooperated. David is a leading expert in appellate and regulatory litigation, where he previously served as the initial assistant general counsel for litigation at the CFPB, where he helped launch the agency and establish and operate the appellate and defense litigation group.
James and David have prepared the first commentary below. This can be used directly for regulation reporting and can also be used for interviews.
James Mann, Davis Wright Tremaine:
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Significant reduction in safe harbor amounts may prompt issuers to impose late fees outside safe harbor. Non-safe harbor late fees can be more than twice his safe harbor amount. And they vary from publisher to publisher and over time, complicating comparison shopping for consumers.
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Rules are more than just cutting safe harbor amount; It also negates the issuer's right to recover its full costs through late fees. outside safe harbor. (Specifically, this rule eliminates the right of an issuer to recover amortized recovery costs, which are a real and material cost to the issuer.)
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While this rule encourages issuers to set transparent prices, it also envisions issuers increasing APRs. This doesn't make sense because it increases the annual interest rate to cover the cost of late payments. with Actual accounts receivable funding cost reduce transparency.
David Gossett, Davis Wright Tremaine:
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In its rush to reach a predetermined outcome, the Bureau manhandled data and other materials submitted in response to the notice of proposed rulemaking.
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I expect the court to consider the CFPB's analysis very carefully, especially given the fact that the Supreme Court is currently reconsidering how much deference each agency gets. There is a good chance that the agency's new rules will be invalidated.
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I would be shocked if someone didn't sue the bureau over the new rules.
About Davis Wright Tremaine
Davis Wright Tremaine LLP is an AmLaw 100 law firm with more than 600 attorneys representing clients located in the United States and around the world. For more information, please visit www.dwt.com.
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