On August 4, the American Securitization Forum (ASF) filed a comment letter with the Federal Reserve Board regarding rule changes to Regulation AA (the Proposed Rule) relating to credit card unfair or deceptive acts or practices (UDAP) which were proposed by the Fed, the Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA) on May 19. Among other requirements, the Proposed Rule would prohibit institutions from engaging in certain acts or practices in connection with consumer credit card accounts.

In its response, the ASF shared the view of the Fed, OTS and NCUA that UDAP must be addressed to protect consumers. However, it also expressed concern that the Proposed Rule’s restrictions on pricing and other provisions would ultimately limit the variety and raise the cost of credit products available to consumers by restricting an issuers’ ability to act in certain instances. As an alternative, the ASF proposes that many of the concerns underlying the Proposed Rule could be addressed with simplified disclosures.