The bad news is the Consumer Financial Protection Bureau has to reverse a rule that capped credit card fees associated with opening a new credit card, but the good news is they’re asking for public comment while they revise it.
A federal court ruling last year said that a law passed in 2009 limiting certain fees on credit cards, including those issued during the first year an account is open, should only apply to fees that occur after the account is opened. That means sign-up fees aren’t included in the cap, reports CNNMoney.
The rule had capped first year fees at 25% of the account’s credit limit. But that crack-down only kicks in after your card is active. Which means card issuers can now charge high fees just to open an account.
A South Dakota federal court judge agreed with the bank last fall, ruling that the new laws don’t kick in until after a customer has already opened an account. That allows card-issuers to charge high fees to open an account without worrying about hitting the cap.
The CFPB is now collecting comments on the measure that will rewrite the rule, and will have to reverse course to clarify which fees have caps and which don’t, to clear up any confusion for consumers. They admit that the new rule “may impose potential costs on consumers.”