Report: Credit card law led to $1.5 billion fewer late fees

“Based on the information we have available to review changes in the credit card market, the Act eliminated many unfair fees, made some market practices more transparent, paved the way for easier comparison shopping, and created a market where consumers can see the costs upfront. These changes are critical to strengthening consumer protections in the marketplace and helping us rebuild our economy,” CFPB Director Richard Cordray said at a field hearing in Chicago, according to prepared remarks.

The 2009 Credit Card Accountability Responsibility and Disclosure Act made a number of reforms to the way credit card companies could conduct their businesses. The law called for limits on unexpected interest rate hikes and various fees.

According to the CFPB report, consumers paid $1.5 billion fewer late fees in 2012 and $2.5 billion less in fees for going over their credit limit. The percentage of people between 18 and 20 years old with a credit card has shrunk in half as a result of new restrictions designed to prevent young people from racking up large debt.

The watchdog’s report also targeted new areas of concern.

The CFPB would like to take a closer look at the optional services credit card companies offer, like identify theft protection and credit monitoring, which can be misleading, as well as different types of disclosures, cards that defer interest for a period of time and application fees.