CFPB Provides Flexibility to Credit Card Issuers in Response to COVID-19 Pandemic

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The CFPB recently issued a statement announcing that during the COVID-19 pandemic it will provide flexibility to credit card issuers regarding the E-Sign Act’s consent requirements in connection with certain written disclosures that are required to be provided under Regulation Z for non-home secured, open-end credit.  

Note the CFPB’s statement only applies to oral telephone interactions with consumers where a credit card issuer: (i) opens a new credit card account for a consumer; (ii) provides certain temporary reductions in APRs or fees applicable to an existing account; or (iii) offers a low-rate balance transfer.  In those scenarios, the CFPB stated that during the COVID-19 pandemic “it does not intend to cite a violation in an examination or bring an enforcement action against an issuer that during a phone call does not obtain a consumer’s E-Sign consent to electronic provision of the written disclosures required by Regulation Z,”  as long as the issuer obtains the consumer’s oral consent to electronic delivery of the disclosures and oral affirmation of the consumer’s ability to access and review such disclosures.  Additionally, the CFPB noted that it expects credit card issuers will take reasonable steps to verify consumers’ electronic contact information during such phone calls.

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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