The American Securitization Forum (ASF) warned that the scope of proposed rules the prohibit certain existing practices regarding consumer credit card accounts will have the negative and unintended consequences of decreasing investment in credit card ABS.
Thus this will limit the credit available to consumers and increasing the cost of available credit, the ASF said in a statement.
The proposed rules might also increase the probability of credit card issuers being forced to raise fees and restrict the number of convenience products offered to consumers if the rules were adopted in their proposed form.
We fully support additional consumer protection measures, but believe the proposed rule requires modifications to minimize its adverse effects on consumers, said Tom Deutsch, deputy executive director of the ASF. Securitization has long provided an efficient funding mechanism and provided liquid-ity to every sector of the economy. Increasing costs and risks to issuers, particularly in these times of credit constraints, will negatively impact consumers, investors and issu-ers. Our proposed changes will preserve critical credit availability in the market and ensure that the proposed rules safeguard consumers without sacrificing the array of credit card products and services now available.