ICBA: Credit Card Proposal Raises Questions About CFPB’s Recognition of Community Bank Business Model

Washington, D.C. (Feb. 1, 2023) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on today’s Consumer Financial Protection Bureau proposed rule on credit card fees for late payments.

“While ICBA and the nation’s community banks review today’s Consumer Financial Protection Bureau proposed rule on credit card late fees, we caution against adversely affecting small issuers, needlessly restricting access to credit in local communities, and mispresenting how community banks meet the credit card needs of their customers.

“As relationship bankers, community banks offer credit cards as a service to their customers under contracts voluntarily entered into by these consumers. Credit card late fees — which are clearly disclosed and represent a small portion of the cost of credit cards to customers — deter late payments and help offset the significant costs to issuers. Considering these costs, current practices are appropriate and do not constitute ‘junk fees,’ despite the CFPB’s misrepresentation of the community bank business model.

“Given the substantial impact of this proposal on community banks and the communities they serve, the CFPB must comply with the Small Business Regulatory Enforcement Fairness Act of 1996 and seek input from small financial institutions through the SBREFA process, as ICBA said in a recent joint letter and in formal comments last year. ICBA and community bankers intend to work closely with the CFPB to mitigate the negative impact of this rulemaking on access to credit in local communities — and to avoid further mischaracterizations from the bureau.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

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