ABA Calls on CFPB to Strike Guidance That Threatens Credit Card Rewards Programs

The American Bankers Association (ABA) is requesting that the Consumer Financial Protection Bureau (CFPB) retract guidance that the agency issued late last year, which advised that the rewards programs credit card companies offer can violate the law in certain circumstances. 

In a letter that Rob Nichols, President and CEO of the ABA, sent to Russ Vought, Acting Director of the CFPB, the association asks that the bureau withdraw a number of communications that the ABA believes are unwarranted attacks on credit card rewards programs.

Credit card issuers that found the CFPB guidance in question to be confusing will breathe a bit easier should the bureau comply with Nichols’ request.

In the Consumer Financial Protection Circular 2024-07, the CFPB asserts that credit card issuers, or companies they partner with to offer rewards programs, break the law when they devalue rewards consumers have earned through their cards or hinder cardholders from redeeming rewards.

The CFPB provides Consumer Financial Protection Circulars to groups that have the authority to uphold federal financial laws that apply to consumers.

Nichols’s letter to Vought indicates the agency’s rewards-centric guidance, in addition to causing confusion for issuers, risks putting credit card perks in jeopardy for consumers and damages the credibility of the regulatory process.

“Consumers of all income levels benefit from rewards, and as the credit card market continues to innovate to drive consumer satisfaction, credit card rewards programs will also continue to deliver significant value to consumers, including convenience, flexibility, and savings,” Nichols wrote.

The rewards credit card space has seen a flurry of activity in 2025. Chase and Citi each rolled out new premium rewards cards over the summer, and American Express updated both the consumer and business versions of its Platinum rewards cards in September.

Credit card rewards not only entice people to use their cards more often to pay for purchases, but they can be a differentiator that helps issuers keep cardholders from turning to other methods of payment such as BNPL services and debit cards.

But, as Nichols points out in his letter, credit card rewards also benefit a third group — the businesses where cardholders transact.

“Merchants gain more from credit card rewards than they pay in interchange and other fees, as credit card users spend significantly more than those who pay in cash,” Nichols wrote. “Merchants also benefit from avoiding the costs associated with handling cash and receive greater financial transaction security.”

Enhanced credit card rewards programs from leading issuers, including American Express and Chase, have hit the market in 2025.

But branding certain credit card rewards practices as illegal stands to have a negative impact on issuers and merchants if it causes cardholders to lose confidence in card programs. 

Russ Vought has yet to respond to Nichols’s letter at the time of this writing. Nevertheless, credit card issuers that are pulling for the CFPB to act in accordance with the request from Nichols may have reason to be optimistic.

A recent report reveals that many of the agency’s employees have received orders not to work this year. And staffers performing duties for the bureau have been focusing on unraveling rules and regulations the CFPB has established over the past several years.