InfoBytes, December 9, 2011 - A Weekly In-depth review of news & developments in the financial services industry


Topics In This Issue

• Federal Issues

• State Issues

• Courts

• Firm News

• Mortgages

• Banking

• Consumer Finance

• Securities

• Litigation

• Credit Cards

• Criminal Enforcement Action

Excerpt from Federal Issues

CFPB Releases Prototype Credit Card Agreement. On December 7, the Consumer Financial Protection Bureau (CFPB) released a prototype credit card agreement designed to simplify for consumers the presentation of certain credit card information, including fees, risks, and terms. The two-page prototype is broken down into three sections. The first section highlights the costs associated with the card, including interest rates and fees. The second section identifies events that could trigger a change in agreement terms, as well as any advance notice requirements. Finally, the third section provides certain "additional information" including, for example, privacy terms and dispute resolution provisions. Standardized definitions for all terms contained in the agreement are maintained online by CFPB, and in a separate document to be provided by the card issuer. CFPB is testing the prototype through an agreement with Pentagon Federal Credit Union, but the CFPB also is seeking broader public input through its website. The CFPB noted that the proposed agreement is not a model form, and its use is not mandatory. Click here for a copy of the prototype agreement, a link to the definitions, and access to the public comment portal.

Legislators Ask CFPB to Study Credit Card "Ability to Pay" Rules. On December 7, a bipartisan group of legislators, including the Chairman and Ranking Member of the House Financial Services Committee, sent a letter to the CFPB requesting a study regarding certain credit card rules issued by the Federal Reserve Board (FRB). The lawmakers seek a report regarding the so-called "ability to pay" rules issued pursuant to the Credit CARD Act, which took effect on October 1. Specifically, the study and report should address any unintended consequences resulting from those rules, including the potential for the rules to restrict credit for nonworking spouses....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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