[Federal Register Volume 86, Number 64 (Tuesday, April 6, 2021)]
[Rules and Regulations]
[Pages 17698-17699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06970]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1026


Rescission of Statement of Policy on Supervisory and Enforcement 
Practices Regarding Electronic Credit Card Disclosures 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 Electronic Credit Card Disclosures in Light of the COVID-19 
Pandemic.

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

FOR FURTHER INFORMATION CONTACT: Zixta Q. Martinez, Division of 
Supervision, Enforcement, and Fair Lending, at (202) 435-7204. If you 
require this document in an alternative electronic format, please 
contact [email protected].

SUPPLEMENTARY INFORMATION: On June 3, 2020, the Bureau issued a 
statement entitled, ``Statement on Supervisory and Enforcement 
Practices Regarding Electronic Credit Card Disclosures in Light of the 
COVID-19 Pandemic'' (Statement), regarding the Bureau's exercise of its 
supervisory and enforcement discretion under the Truth in Lending Act 
(TILA) (15 U.S.C. 1601 et seq.) as implemented by Regulation Z (12 CFR 
part 1026).\1\ The Statement provided that under specified 
circumstances, the Bureau did 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 certain written disclosures required by 
Regulation Z (12 CFR part 1026), so long as the issuer during the phone 
call obtains both the consumer's oral consent to electronic delivery of 
the written disclosures and oral affirmation of his or her ability to 
access and review the electronic written disclosures. Specifically, the 
Statement pertained to oral telephone interactions where a card issuer 
may seek to open a new credit card account for a consumer, provide 
certain temporary reductions in APRs or fees applicable to an existing 
account, or offer a low-rate balance transfer.
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    \1\ https://files.consumerfinance.gov/f/documents/cfpb_e-sign-credit-card_statement_2020-06.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 understanding that as a result 
of the COVID-19 pandemic some credit card issuers were receiving far 
more phone calls from consumers than usual while also operating with 
reduced staffing or servicing capability. In particular, consumers in 
many instances were reaching out to issuers seeking relief that issuers 
sometimes could not provide without first providing certain written 
disclosures required by Regulation Z. The Bureau has concluded that 
since release of the Statement such circumstances have changed. Since 
March 2020 and over the course of the pandemic, financial institutions, 
including credit card issuers, have adjusted operations by, for 
example, shifting to a remote mode of operation and enhancing remote 
operational capabilities. As States and 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 
enhanced remote capabilities, have demonstrated improved business 
continuity. Specifically, once States and jurisdictions rescinded and 
modified stay-at-home orders, service representatives of credit card 
issuers regained access to certain operational systems that could not 
be accessed remotely and could resume responsiveness to consumer calls 
about (1) opening a new credit card account for a consumer, (2) 
providing certain temporary reductions in APRs or fees applicable to an 
existing account, or (3) offering a low-rate balance transfer. Based on 
the Bureau's market monitoring, the Bureau also notes that consumers 
have accelerated their transition from traditional call communications 
to digital means as the pandemic has progressed. Therefore, due to the 
noted adjustments by credit card issuers and communication migration 
from traditional calls to digital means by consumers, the temporary and 
targeted flexibility provided by the Statement is no longer warranted.
    Based on the Bureau's market monitoring, the Bureau believes that 
credit card issuers have adapted and improved operations over the 
course of the pandemic and are now able to respond to the credit needs 
of consumers while still providing consumers with the full protections 
afforded by TILA and Regulation Z without the flexibility afforded 
under the Statement. The Bureau notes that many credit card issuers are 
now choosing not to take advantage of the flexibility provided by the 
Statement due to improved operational capabilities that enable the 
provision of written disclosures. 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. The Bureau 
never intended the Statement to be permanent, and the Statement 
expressly indicated that the relief was intended to be temporary and 
targeted.
    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

[[Page 17699]]

competitive.'' 12 U.S.C. 5511(a). Declining to cite conduct that is a 
violation of TILA and Regulation Z based on the articulated principles 
in the Statement may skew the consumer financial marketplace, to the 
detriment of market participants who provide written disclosures in 
accordance with TILA and Regulation Z while demonstrating an ability to 
quickly assist consumers and respond to the credit needs of consumers 
during the pandemic. To fulfill its statutory mandate, the Bureau has 
made it a priority to direct its supervisory, enforcement, and other 
tools to ensure that consumers are afforded full protection under the 
law. It is therefore more important than ever that financial 
institutions will adhere to the consumer protection requirements of 
TILA and Regulation Z in their interactions with consumers 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 Electronic Credit Card 
Disclosures in Light of the COVID-19 Pandemic and instructs all 
financial institutions, including credit card issuers, to comply with 
their obligations under TILA (15 U.S.C. 1601 et seq.) as implemented by 
Regulation Z (12 CFR part 1026). 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 TILA and Regulation Z written disclosure requirements as 
described in the Statement between June 3, 2020, and April 30, 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 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. 2021-06970 Filed 4-5-21; 8:45 am]
BILLING CODE 4810-AM-P