[Federal Register Volume 86, Number 64 (Tuesday, April 6, 2021)]
[Rules and Regulations]
[Pages 17697-17698]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06969]



[[Page 17697]]

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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1026


Rescission of Statement of Policy on Supervisory and Enforcement 
Practices Regarding Regulation Z Billing Error Resolution Timeframes in 
Light of the COVID-19 Pandemic

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Rescission of statement of policy.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
rescinding the Statement on Supervisory and Enforcement Practices 
Regarding Regulation Z Billing Error Resolution Timeframes in Light of 
the COVID-19 Pandemic.

DATES: This rescission is applicable on April 1, 2021.

FOR FURTHER INFORMATION CONTACT: Mehul Madia, Division of Supervision, 
Enforcement, and Fair Lending, at (202) 435-7104. If you require this 
document in an alternative electronic format, please contact 
[email protected].

SUPPLEMENTARY INFORMATION: On May 13, 2020, the Bureau issued a 
statement entitled, ``Statement on Supervisory and Enforcement 
Practices Regarding Regulation Z Billing Error Resolution Timeframes in 
Light of the COVID-19 Pandemic'' (Statement), regarding the Bureau's 
exercise of its supervisory and enforcement discretion under Regulation 
Z.\1\ Specifically, the Statement provides that when evaluating a 
creditor's compliance with the maximum timeframe for billing error 
resolution set forth in Regulation Z, the Bureau intends to consider 
the creditor's circumstances and does not intend to cite a violation in 
an examination or bring an enforcement action against a creditor that 
takes longer than required by the regulation to resolve a billing error 
notice, so long as the creditor has made good faith efforts to obtain 
the necessary information and make a determination as quickly as 
possible, and complies with all other requirements pending resolution 
of the error.
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    \1\ https://files.consumerfinance.gov/f/documents/cfpb_statement_regulation-z-error-resolution-covid-19_2020-05.pdf.
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    The Bureau hereby rescinds, as of April 1, 2021, the Statement and 
announces its intent to exercise its supervisory and enforcement 
authority consistent with the Dodd-Frank Act and with the full 
authority afforded by Congress consistent with the statutory purpose 
and objectives of the Bureau.
    The Statement expressed the Bureau's recognition that some 
entities, including small businesses, that provide information to 
facilitate creditors' investigation of consumers' billing error notices 
might face significant operational disruptions as a result of the 
COVID-19 pandemic, including staff reductions, and thus might have 
difficulty in handling unusual volumes of error notices. The Bureau 
believed that these disruptions would render it more difficult for 
creditors to accurately and timely resolve consumers' billing error 
notices based on information from merchants with potential damage to 
merchants and consumers from incorrect decisions. The Statement also 
expressed the Bureau's recognition of the impact of the COVID-19 
pandemic on the operations of many financial institutions, including 
staffing and related resource challenges confronting financial 
institutions and their counsel. The Bureau has concluded that since 
release of this Statement such circumstances have changed. Since March 
2020 and over the course of the COVID-19 pandemic, many creditors have 
adjusted operations by, for example, shifting to a remote mode of 
operation. As States and other jurisdictions have rescinded and 
modified stay-at-home orders over the course of the pandemic, the 
Bureau has learned that many financial services entities have resumed 
some level of in-person operations and, in many instances combined with 
more robust remote capabilities, have demonstrated improved business 
continuity and have taken extra steps to ensure disputes are resolved 
within the required timeframe.
    Based on the Bureau's market monitoring, it is believed creditors 
now have sufficient capacity to manage consumer dispute requests and 
are able to regularly meet their obligations under Bureau's Regulation 
Z (12 CFR part 1026) without the flexibility afforded under the 
statement. Data from Bureau's complaint system also shows that 
complaints relating to credit card billing disputes have been declining 
since June of 2020. In addition, because the Statement did not create 
binding legal obligations on the Bureau or create or confer any 
substantive rights on external parties, it did not create any 
reasonable reliance interests for industry participants. Indeed, the 
Bureau never intended the Statement to be permanent, and expressly 
stated it was tied to the unique circumstances faced at the start of 
the pandemic. The Bureau continues to encourage institutions to meet 
the financial services needs of their customers affected by the COVID-
19 pandemic.
    As the pandemic continues to unfold, consumers are struggling and 
compliance with consumer law has never been more important. The 
Bureau's statutory purposes include ``ensuring . . . that markets for 
consumer financial products and services are fair, transparent, and 
competitive.'' 12 U.S.C. 5511(a). The Bureau believes that there is 
potential consumer harm when billing error disputes are not timely 
resolved, as required by law, and at this point in the pandemic, that 
credit card issuers can timely resolve disputes without compromising 
accuracy. To fulfill its statutory mandate, the Bureau has made it a 
priority to direct its supervisory, enforcement, and other tools to the 
prevention of harm to consumers from unlawful acts, policies, and 
practices. It is therefore more important than ever that institutions 
adhere to consumer protection requirements, and that the Bureau use its 
supervisory and enforcement tools to the full extent and with the full 
flexibility afforded by Congress.
    The Bureau hereby rescinds, as of April 1, 2021, its Statement on 
Supervisory and Enforcement Practices Regarding Regulation Z Billing 
Error Resolution Timeframes in Light of the COVID-19 Pandemic. Instead, 
in its discretion, the Bureau intends to exercise its supervisory and 
enforcement authority consistent with the Dodd-Frank Act and with the 
full authority afforded by Congress consistent with the statutory 
purpose and objectives of the Bureau. The Bureau does not intend to 
cite in an examination or initiate an enforcement action against any 
entity that did not comply with the billing error timeframe as 
described in the Statement between May 13, 2020, and March 31, 2021.

Regulatory Requirements

    The Statement constituted a general statement of policy exempt from 
the notice and comment rulemaking requirements of the Administrative 
Procedure Act (APA). It was intended to provide information regarding 
the Bureau's general plans to exercise its supervisory and enforcement 
discretion and did not impose any legal requirements on external 
parties, nor did it create or confer any substantive rights on external 
parties that could be enforceable in any administrative or civil 
proceeding. This rescission likewise is a general statement of policy 
exempt from the notice and comment rulemaking requirements of the APA. 
It is intended to provide information

[[Page 17698]]

regarding the Bureau's general plans to exercise its supervision and 
enforcement discretion and does not impose any legal requirements on 
external parties or create or confer any substantive rights on external 
parties that could be enforceable in any administrative or civil 
proceedings. No notice of proposed rulemaking was originally required 
in issuing the Statement, and it is not required in issuing this 
rescission. The Regulatory Flexibility Act also does not require an 
initial or final regulatory flexibility analysis for this rescission. 
The Bureau has also determined that the rescission of the Statement 
does not impose any new or revise any existing recordkeeping, 
reporting, or disclosure requirements on covered entities or members of 
the public that would be collections of information requiring approval 
by the Office of Management and Budget under the Paperwork Reduction 
Act.

    Dated: March 29, 2021.
David Uejio,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2021-06969 Filed 4-5-21; 8:45 am]
BILLING CODE 4810-AM-P