Citigroup recently announced that it would issue refunds to some 1.75 million credit cardholders who had been charged interest rates that were too high. The refunds will total $335 million, or an average of $190 per account.
Fixing the error was mandated by the CARD Act, legislation introduced almost a decade ago aimed at protecting bank customers, NBC News reported. Prior to the CARD Act’s implementation, a customer unlucky enough to miss a payment could be saddled with a much higher penalty APR for an indefinite — and often long — duration.
Financial watchdogs say this story has a happy ending, but they worry that the White House's open hostility to the Consumer Financial Protection Bureau could diminish enforcement and erode compliance in future cases.
The Bureau’s current director, Mick Mulvaney, appointed by President Donald Trump, has made no secret of his desire to make the agency he leads less powerful. “We do worry that if the cop is no longer on the beat, then companies would have less incentive to be careful about what they’re doing and take aggressive steps to fix problems,” said Lauren Saunders, associate director at the National Consumer Law Center.