Credit card companies can make a living selling predatory loans and then get caught in a web of fraud and deception by charging fees and penalties that are too high to pay.
But the FTC is proposing to require them to make loans with the same risk profile they offer with credit cards.
It’s the latest effort to hold companies accountable for predatory practices.
“There is a lot of fraud, and a lot that we know about is fraudulent, but there are also people who are really doing good work,” said FTC Commissioner Edith Ramirez.
“And when you put a company on the same level as a bank or credit union and charge them fees and charges that are unreasonable, they just don’t make a lot sense.
And so we are trying to make it easier for companies to get back on track and to get consumers back on the hook.”
The FTC is also proposing a new standard for how much credit card companies must charge for loan originations.
They would be required to use a rate that is lower than the average rate on the market.
The FTC has previously been recommending the higher rates.
But the agency is proposing a change that would apply only to the highest-risk cards.
Consumers with lower-risk credit cards would have to pay higher fees for each loan.
The change would apply to all credit cards except those with a limited credit history.
This would apply in a number of states, including California, Massachusetts, New York, and Vermont.
The proposal was announced on Thursday.
It was part of the FTC’s response to the Equifax breach, which revealed the company’s massive database of personal information of millions of Americans.
The company said the data was stolen in 2016 and the company has begun an investigation into the breach.
The FTC’s proposed rule is the latest attempt to hold credit card issuers to account.
Last year, the agency announced that it would require issuers of direct deposit and payday loans to put in place safeguards to prevent credit card fraud.