Data revealing credit unions consistently offer lower credit card rates shared with CFPB

In a letter to the CFPB Thursday, America’s Credit Unions addressed credit union priorities related to the consumer credit card market. It highlighted the industry’s commitment to pricing and data transparency and addressed the need for interest rate cap reform.

The letter included data revealing credit unions consistently offer lower credit card rates than banks, due to their cooperative structure.  

“Accordingly, we urge the Bureau to disaggregate credit union data from the generic ‘small issuer’ category in its future analyses,” wrote America’s Credit Unions Head of Regulatory Advocacy James Akin. “Failing to do so masks the unique consumer benefit credit unions offer.”

Regarding the federal credit union (FCU) interest rate cap, Akin noted credit unions continue to offer affordable rates regardless of statutory caps but warned of negative impact, explaining “the current 18% interest rate ceiling imposed on [FCUs] is increasingly acting as a hard constraint on credit unions’ ability to serve higher-risk borrowers.”  

“Combining data from the CFPB’s Terms of Credit Card Plans Survey and America’s Credit Unions’ sample of data from Equifax, we have a clear picture of the impact of the federal credit union interest rate ceiling on borrowers,” wrote Akin, suggesting the CFPB should support a floating benchmark-based cap to preserve access to affordable credit.

Additional suggestions outlined in the letter include:  

• Updates to outdated disclosure requirements—such as E-Sign consent, written application standards for young borrowers, and rigid timing rules—to align with digital practices and improve consumer access;
• Regulations should not disproportionately burden small issuers like credit unions, and instead the CFPB should tailor rules and streamline requirements to their scale and mission, preserving competition and consumer choice; and
• Regulations should empower—not undermine—credit unions' ability to offer inclusive, affordable credit.