On July 18, 2012, the Consumer Financial Protection Bureau (“CFPB”) issued a compliance bulletin for credit card issuers on the marketing of add-on products (“Bulletin”). The Bulletin was issued in conjunction with announcements that the CFPB and Office of the Comptroller of the Currency (“OCC”) had entered into consent orders with Capital One Bank, (USA) N.A. (“Capital One”) regarding the marketing of payment protection and credit monitoring products to its customers. The consent order with Capital One marks the CFPB’s first major public enforcement action against a card issuer, while also providing related guidance for other market participants. While the title of the Bulletin relates solely to card products, its opening footnote directs all institutions to consider the guidance when offering similar products with other forms of credit and deposit services.
The Bulletin contains three parts: an introduction, an overview of applicable consumer protections and the CFPB’s expectations for card issuers and their service providers when offering add-on products. The Bulletin begins by reminding issuers and service providers that “[u]nder the Dodd-Frank Act, it is unlawful for any provider of consumer financial products or services or a service provider to engage in any deceptive act or practice” and that “[i]t is also unlawful for any person to knowingly or recklessly provide substantial assistance to a covered person or service provider” in violation of these prohibitions. The Bulletin also references other CFPB materials, including the CFPB’s October 2011 Supervision and Examination Manual and its guidance on bank supervision of service providers, issued April 13, 2012.
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