The CFPB has issued a statement regarding its supervisory and enforcement practices in connection with the electronic provision of certain credit card disclosures during the pandemic that are required by Regulation Z to be provided in writing.
The Bureau discusses the use of E-Sign consent to provide disclosures electronically that pursuant to underlying law, such as Regulation Z, must be provided in writing. It describes how the process of obtaining E-Sign consent can result in longer telephone transactions, dropped telephone calls, and additional calls. It also reviews the specific E-Sign requirements with which an issuer must comply to provide disclosures electronically, such as obtaining a consumer’s affirmative consent to receive disclosures electronically and providing certain disclosures to a consumer before obtaining consent. The Bureau indicates that its objective in providing supervisory and enforcement flexibility is to facilitate card issuers’ ability to quickly assist consumers during the pandemic and mitigate the difficulty E-Sign requirements may create for consumers seeking to obtain relief quickly at a time when the pandemic is leading to unusually high call volumes and reduced issuer staffing.
The Bureau states that during the pandemic, it will take a flexible supervisory and enforcement approach regarding card issuers’ electronic provision of account-opening disclosures and temporary rate or fee reduction disclosures that are required by Regulation Z to be provided in writing for non-home secured, open-end credit. The Bureau’s flexible approach is directed at telephone calls where a card issuer seeks to open a new account for a consumer, provide temporary APR or fee reductions for an existing account, or offer a low-rate balance transfer. The Bureau does not intend to cite a violation in an examination or bring an enforcement action against an issuer that, during such a call, does not obtain a consumer’s E-Sign consent to receive disclosures electronically if the issuer during the call obtains both the consumer’s consent to electronic delivery of the disclosures and oral affirmation of his or her ability to access and review the electronic disclosures. The Bureau indicates that it expects issuers who choose to take advantage of this flexibility to retain evidence of compliance with these conditions, such as through retention of call recordings or notes.
The Bureau also states that it expects issuers to take reasonable steps during a telephone call to verify consumers’ electronic contact information, such as by confirming the accuracy of an email address given by the consumer during the call or already on file. Finally, the Bureau makes clear that its statement only provides flexibility regarding account-opening disclosures and temporary rate or fee reduction disclosures and that it does not intend to apply this flexibility to other Regulation Z requirements.