Despite industry wide opposition, many credit card companies, which provide merchant services and other operations, are seeing benefits from the 2009 Credit Card Accountability Responsibility Act, according to Bloomberg BusinessWeek.
The qualifications for obtaining a credit card have become more stringent under provisions of the legislation. In an interview with the source, Discover Financial Services chief financial officer Mark Graf said that while he still wasn’t a proponent of the measure, he did recognize a benefit from the new restrictions on who could sign up.
“If there is a silver lining to the CARD Act — I’m not here to say the CARD Act was good for our business, so nobody misunderstand the comment — but if there were a silver lining to it, it forced rationality,” said Graf in an interview with the source. He added that under the old rules many firms engaged in a “race to the bottom.”
One of the results of the CARD Act was the creation of the Consumer Financial Protection Bureau (CFPB). In one of its first moves, the agency fined Capital One after it allegedly misled consumers about signing up for additional programs.Back To Blog