On February 24, 2015, the CFPB proposed an amendment to Regulation Z which would suspend, for one year, credit card issuers’ obligations to submit credit card agreements to the CFPB. In submitting the proposed rule, the CFPB seeks to ease the burden on issuers while it develops a more streamlined and automated electronic submission system.
Section 122(d) of the Truth in Lending Act, implemented through Regulation Z, requires card issuers to post credit card agreements on the issuers’ websites and to submit those agreements to the CFPB for posting on a publicly available website. Regulation Z provides that agreements must be submitted quarterly and sent to the CFPB no later than the first business day on or after January 31, April 30, July 31, and October 31 of each year.
Under the current submission process, card issuers submit agreements to the CFPB via email. The CFPB has expressed concern with the cumbersome and inefficient nature of this process, and is currently working to develop a system that will allow card issuers to quickly upload new and revised agreements directly to the CFPB database. The proposed suspension of submission requirements seeks to ease the burden of manual submission while the CFPB develops its new system.
The proposed rule would mean that, during the one-year suspension, new credit card agreements will not be centrally accessible on the CFPB’s website, but the CFPB pointed out that the proposal would not impact the requirement that card issuers maintain currently offered agreements on their own websites or that card issuers make all open agreements available to cardholders upon request. Also, the CFPB intends to manually compile agreements from large issuers’ websites starting in September 2015, which will allow consumers to resume use of the CFPB’s website to compare agreements.
The proposed rule would apply to credit card agreements due for submission on April 30, July 31, and October 31, 2015, and on January 31, 2016. Card issuers would then resume submitting credit card agreements to the CFPB on a quarterly basis beginning with the submission due on the first business day on or after April 30, 2016. When they resume submission, card issuers must follow any technical specifications for submission released by the CFPB. The proposed rule seeks an immediate effective date but requests comment on whether a later effective date would be more appropriate. The CFPB will accept comments on the proposed rule until March 13. Interested parties can submit comments here.