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Synchrony finance12/24/2023 ![]() ![]() No additional action is needed by the cardholder nor the merchant. Promotional financing is automatically applied to qualifying purchases by Synchrony, and is reflected on the account statement. Promotional financing is available at auto merchants where Synchrony Car Care is accepted. ![]() Gas station purchases are not eligible for promotional financing. For promotional financing details, click here. In January, Synchrony executives said that they were not overly concerned about the CFPB's scrutiny of late fees, since the company could find other ways to protect its revenue and margins.* Minimum monthly payments required. The regulators currently allow issuers to charge $30 for first-time late fees and $41 for subsequent missed payments. Under the CFPB's proposal, card issuers would have to seek approval from regulators if they want to charge more than $8 per late fee. "The CARD Act's restrictions on our ability to increase interest rates on existing balances to respond to market conditions and credit risk ultimately limits our ability to extend credit to new customers and provide additional credit to current customers," Synchrony said in its annual report.Ĭhi Chi Wu, a senior attorney at the National Consumer Law Center, which supports the CFPB's late-fee proposal, acknowledged that Synchrony may try to find ways to recoup the revenue it loses if late fees get cut to $8.īut, pointing to the CARD Act's restrictions, she added: "That only works up to a certain point." In its most recent annual report, Synchrony said that CARD Act restrictions have resulted in reduced income from interest and fees. Under the 2009 law, card issuers generally cannot raise interest rates on existing balances until the customer is at least 60 days past due. "So if someone gets late, you change the interest rate," Wenzel said before acknowledging that Synchrony would have to account for provisions of the CARD Act. Penalty-based pricing would be one way to do so, though the CARD Act puts restrictions on the ability of card issuers to implement that strategy. The third option on the table at Synchrony is to find new ways to use pricing to deter late payments. Under the CARD Act of 2009, card issuers cannot collect upfront fees that add up to more than 25% of the available balance in the first year.Ī second way that Synchrony could recoup lost revenue would be to raise annual percentage rates, though again Wenzel did not provide details about how such a plan might work. Wenzel said those charges could include annual fees, but he also alluded generally to the possibility of other kinds of fees. One potential method to recoup lost late-fee revenue would be to impose other fees. But he also acknowledged that the company's ability to collect more money from struggling borrowers will be constrained by a 14-year-old federal law that put various restrictions on the industry. Wenzel identified three specific ways that Synchrony might change its pricing. "It's not necessarily going to be in one flavor, given the size of what the CFPB is proposing." "I think we're probably heading into what I'd say is a more definitive period of time, where we've kind of identified the exact things we may do," Wenzel said during remarks at a Morgan Stanley conference. ![]()
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