CFPB Rescinds Flexibility-Related Policy Statements

In January, Acting Director Dave Uejio of the Consumer Financial Protection Bureau (CFPB) re-emphasized the agency’s role in protecting consumers. On April 1, the CFPB rescinded several policy statements and bulletins made in 2020 that were meant to provide banks with compliance flexibility regarding consumer financial regulation. These statements that have now been rescinded were initially put forth between March 26 to June 3, 2020 with an indication that they were meant to be temporary. 

COVID-19 Response: The first statement rescinded dealt with the CFPB’s supervisory and enforcement response to the COVID-19 pandemic. It indicated that the CFPB would consider staffing and other operations-based challenges due to the pandemic when taking action. The CFPB has found that banks have taken the necessary steps to adjust to the pandemic without needing leniency when it comes to consumer compliance. Ultimately, the CFPB now intends to exercise its full authority regarding supervision and enforcement.

Credit Card and Prepaid Account Issuers: This policy statement previously allowed for flexibility regarding information reporting and collection. Credit card issuers should submit information concerning agreements between issuers and higher education institutions as required by Reg. Z from 2019 and 2020. This also covers the quarterly requirement of reporting credit card agreements.

Regulation V: The CFPB had issued out a policy statement setting forth flexibility when it came to enforcing compliance with the Fair Credit Reporting Act (FCRA) and Regulation V. While the rescission of this statement means the CFPB will now resume its full authority in enforcing compliance with these rules, the Bureau made it clear that the rescission does not apply to flexibilities regarding furnishing consumer information impacted by COVID-19, meaning those would still be in place. This generally covers banks’ efforts to provide payment relief and means the CFPB would not act against those who furnish information accurately reflecting those relief measures.

Billing Error Resolution: A previous policy statement said that the CFPB would not act against a bank that took longer than what was required by Regulation Z to resolve a billing error as long as the bank had made a good faith effort to get the necessary information and decide as soon as possible whether an error exists. The CFPB will now be resuming its full enforcement of the billing error resolution requirements in Regulation Z.

Electronic Credit Card Disclosures: This policy statement provided that the CFPB would not cite a violation if during a phone call a bank does not get E-SIGN consent prior to delivering electronic credit card disclosures if the bank gets the consumer’s oral consent while on the call. As of April 1, the CFPB will now be enforcing the requirement to get E-SIGN consent prior to delivering these disclosures electronically with oral consent during a call no longer being sufficient.

While we continue to navigate through the COVID-19 pandemic, it becomes even more important to ensure compliance in protecting consumers. Compliance Alliance continues to be here to assist you in your efforts to best do so.