The leaders of six large credit card issuers have been asked to explain some of their companies’ practices of allegedly holding back information about payments made by consumers in letters from the consumer financial protection bureau, the agency said Thursday.
The letters – addressed to the CEOs of JP Morgan Chase, Citibank, Bank of America, Capital One, Discover, and American Express – were dated Wednesday by the Consumer Financial Protection Bureau (CFPB). The letters, the agency said, ask the firms to explain their practices, which the agency charged has the potential to impact consumers and their ability to access credit at the most competitive rates.
The CFPB, in the letters, said its research showed that only about half of the largest credit card issuers contribute data to credit reporting companies about the exact monthly payment amounts made by borrowers. The research also exposed, the agency said, that over a short period of time, several of the largest credit card issuers began to suppress actual payment amount information that they had previously provided or furnished on consumers.
“In 2020, we issued a report highlighting how some of the card companies with the most accounts appear to have chosen to suspend actual payment amount furnishing over the course of 2014,” the bureau wrote. “It is our understanding, based on our review of easily accessible credit report information, that your company currently does not regularly or consistently contribute actual payment amount information into the nationwide credit reporting system.
“Without this information, it may be more difficult for lenders to price credit and offer consumers the best valued credit offers and loans for their money,” CFPB said.
The bureau stated it seeks answers to five questions (with descriptions, in some cases) about the firms’ practices:
- If actual payment was a field your company previously furnished regularly or consistently since 2012, but no longer does, what was the rationale and decision process behind that change?
- If actual payment was a field your company has never regularly or consistently furnished, or has not done so since 2012 or earlier, has there been a rationale for that practice?
- If actual payment is a field your company furnishes today for some but not all of your card account products, please describe the rationale and circumstances for this practice.
- Are there material barriers that would prevent including the actual payment field in the account information your company already furnishes?
- Does your company have plans to start furnishing actual payment amount information? How quickly could your company begin furnishing actual payment information consistently and accurately?
The bureau said it wanted responses within 30 days. However, the agency also noted it was not making a “supervisory request” and that answering the questions is not mandatory. Responses would also be treated as confidential information, the agency said.