A New York Times article on Friday questioned the CFPB’s approach to credit card fees, stating that “[i]n one of the first tests of its willingness to show its muscle, [the CFPB] declined on Thursday to put up a fight.” Analyzing the CFPB’s Truth in Lending (Regulation Z) proposal released on Thursday, April 12th, the article noted that the CFPB proposed to eliminate an earlier Federal Reserve expansion of a Credit Card Act provision designed to limit upfront credit card fees.

The Credit Card Act, which previously fell under the purview of the Federal Reserve, included rules limiting credit card issuers from charging fees equal to more than 25 percent of the credit extended in the first year the account was opened. The Federal Reserve then expanded the rule to include fees on upfront charges. The CFPB, faced with a preliminary injunction issued by the Federal District Court for South Dakota barring the rule on upfront fees from taking effect, issued Thursday’s proposed rule and asked for comments on whether the rule should be revised to exclude its application to fees charged before an account is opened. Consumer protection advocates cited in the New York Times article argued that the CFPB should fight hard against the upfront fees while others commented that this may be a case of the agency “pick[ing] its battles.”

Comments on the proposal are due on June 11th.

CFPB’s Proposal for Truth in Lending (Regulation Z) Rule Garners Attention in New York Times Article