Yesterday, the Consumer Financial Protection Bureau (“CFPB”) announced a consent order with GE Capital Retail Bank and its subsidiary CareCredit (collectively “CareCredit”) related to what the CFPB alleges were unfair and deceptive enrollment and disclosure practices. Of note, the consent order marks the first public enforcement action by the CFPB against deferred interest products, and offers a glimpse of ways the CFPB may look to regulate such products in the future, including by imposing a potentially burdensome application process.
Overview of Allegations -
According to the consent order, CareCredit provides a credit card to consumers for use at dental and medical providers enrolled with CareCredit (“Provider” or “Providers”). The CareCredit Card is either offered to consumers directly by CareCredit or indirectly by staff at each enrolled Provider’s office. When applying for a CareCredit Card, applicants are presented with the choice of either a deferred interest option or a fixed-rate 14.9% payment option.
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