Memo to HFSC: Views on Legislation for the April 17, 2024 Full Committee Markup

On behalf of the members of the American Bankers Association (ABA), please see below our views on several measures scheduled for consideration by the Committee on April 17, 2024. Thank you for the opportunity to express our views on these measures.

H.J.Res.122 – CFPB Credit Card Late Fee Rule

The ABA supports H.J. Res. 122, sponsored by Rep. Andy Barr (R-KY), which would overturn the Consumer Financial Protection Bureau’s (CFPB) final rule on credit card late fees. In joint letters to Senate and House lawmakers, ABA and other financial services trade associations pointed out that the rule to reduce the safe harbor amount for credit card late fees will create long-term harm for the consumers the CFPB purports to help:

"The CFPB's final rule would, by definition, make it easier for consumers to miss their credit card payments," the associations said. "As more consumers pay late, there is a higher chance they will become delinquent. Ultimately, consumers experiencing delinquency will have this information reported to credit bureaus, leading to higher credit card balances carried month-to-month and lower credit scores, which can lead to far worse outcomes for consumers such as difficulty obtaining credit, or higher financing costs for housing, cars, and other necessary purchases."

H.R. 5535 – Insurance Data Protection Act

ABA supports H.R. 5535, sponsored by Rep. Scott Fitzgerald (R-WI), which would prohibit the Federal Insurance Office (FIO), Treasury, and other financial regulators from collecting market data directly from an insurance company.

Insurance is regulated by the states and not federal agencies, and much of the data in question is already collected by state insurance commissioners. In a recent letter to the Treasury Department, The National Association of Insurance Commissioners (NAIC) said that it is duplicative and unnecessary for the Treasury and federal regulators to try to collect the data directly from insurers:

"We believe FIO should honor the time-tested and well-settled fact that regulation of the insurance industry is best performed at the state level. We are willing to work with FIO within a mutually agreed to, reasonable timeframe to identify pertinent data and develop appropriate analyses suitable to a credible assessment of climate risk. However, in light of our concerns with the current proposal and our shared interest in the issue, we urge you to reconsider this proposal and instead engage with state regulators and the NAIC in good faith and a collaborative spirit on a path forward."

Download the memo to read the full text.