For example, in delineating the costs of lending to be disclosed and standardized, the statute defines “finance charge” as the “sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit. [...] The Proposed Rule references that in implementing the CARD Act in 2010 (immediately following the 2009 passage of the bill), regulators “believe[d] that, as a general matter, Congress intended the CARD Act to apply broadly to products that meet the definition of a credit card,” including debit cards that access an overdraft line of credit.28 Despite recognizing that such debit cards qualified as c. [...] Interpretation of “plan” CFPB should elaborate on how its interpretation of “plan” is identical to the interpretation it offered in the Prepaid Rule, where it determined that overdraft services “can be regulated by Regulation Z as a ‘plan’ where the consumer is contractually obligated to repay the debt, even if the creditor retains, by contract, the discretion not to extend credit.”34 In the Propo. [...] Requirement to structure credit and assets separately in consumer accounts Both the Prepaid Rule and the Proposed Rule require that the credit features of the products be organized separately from the asset features (prepaid funds and debit funds, respectively) to facilitate transparency and compliance with Regulation Z.38 The Proposed Rule notes that this 32 Id. [...] The benefits of waiving a fee could include improved customer relations.56 It may also be that the bank has determined the risk associated with those accounts is reduced compared to the general overdraft pool, reducing losses.57 When banks do not charge fees to a group of overdrafts, it is reasonable to infer that the breakeven cost to the bank from those overdrafts is zero.
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- 19
- Published in
- United States of America
