Rescission of Statement of Policy on Supervisory and Enforcement Practices Regarding Regulation Z Billing Error Resolution Timeframes in Light of the COVID-19 Pandemic, 17697-17698 [2021-06969]
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Federal Register / Vol. 86, No. 64 / Tuesday, April 6, 2021 / Rules and Regulations
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
Bureau of Consumer Financial
Protection.
ACTION: Rescission of statement of
policy.
AGENCY:
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 CFPB_Accessibility@
cfpb.gov.
SUMMARY:
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.
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
khammond on DSKJM1Z7X2PROD with RULES
SUPPLEMENTARY INFORMATION:
1 https://files.consumerfinance.gov/f/documents/
cfpb_statement_regulation-z-error-resolution-covid19_2020-05.pdf.
VerDate Sep<11>2014
17:01 Apr 05, 2021
Jkt 253001
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 inperson 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
PO 00000
Frm 00007
Fmt 4700
Sfmt 4700
17697
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
E:\FR\FM\06APR1.SGM
06APR1
17698
Federal Register / Vol. 86, No. 64 / Tuesday, April 6, 2021 / Rules and Regulations
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
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
Bureau of Consumer Financial
Protection.
ACTION: Rescission of statement of
policy.
AGENCY:
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.
SUMMARY:
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 CFPB_
Accessibility@cfpb.gov.
SUPPLEMENTARY INFORMATION: On June 3,
2020, the Bureau issued a statement
entitled, ‘‘Statement on Supervisory and
khammond on DSKJM1Z7X2PROD with RULES
DATES:
VerDate Sep<11>2014
17:01 Apr 05, 2021
Jkt 253001
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.
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 in1 https://files.consumerfinance.gov/f/documents/
cfpb_e-sign-credit-card_statement_2020-06.pdf.
PO 00000
Frm 00008
Fmt 4700
Sfmt 4700
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
E:\FR\FM\06APR1.SGM
06APR1
Agencies
[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.
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\1\ https://files.consumerfinance.gov/f/documents/cfpb_statement_regulation-z-error-resolution-covid-19_2020-05.pdf.
---------------------------------------------------------------------------
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