On March 22, 2013, the Consumer Financial Protection Bureau (CFPB) finalized an amendment to Regulation Z, which implements the Truth in Lending Act, so that the limitation on the total amount of fees that a card issuer may require a consumer to pay with respect to a credit card account stands at 25% of the credit limit during the first year after account opening. Regulation Z previously stated that this limitation applied “prior to account opening and during the first year after account opening.”
The final rule is in response to a federal court ruling issued last year that granted a preliminary injunction to block a part of the Federal Reserve Board’s (Board’s) 2011 rule from taking effect. The blocked part of the rule extended the fee limitation to include fees incurred prior to the opening of the credit card account. The authority to implement the Card Act has since transferred from the Board to the CFPB. The CFPB issued a proposal last year to amend the rule to be consistent with the court ruling, which they have now finalized.