Written by Brandy Bruyere, Director of Regulatory Compliance
Sorry everyone, this is not an April Fool’s joke – the rule requiring credit card issuers to submit agreements to the CFPB each quarter will be back in effect at the end of this month. Last year, the CFPB temporarily suspended this rule until April 30, 2016. More details can be found in this past NAFCU blog post. Since April 30 is right around the corner, many credit unions have asked if card agreements need to be submitted this month.
Well, yesterday the CFPB answered this question in a letter indicating that the suspension is not being extended any further, but rather credit card agreements must be submitted by May 2, 2016 as applicable. As a reminder, section 1025.58(c) says the following:
“§1026.58 Internet posting of credit card agreements.
(1) Agreement. For purposes of this section, “agreement” or “credit card agreement” means the written document or documents evidencing the terms of the legal obligation, or the prospective legal obligation, between a card issuer and a consumer for a credit card account under an open-end (not home-secured) consumer credit plan. “Agreement” or “credit card agreement” also includes the pricing information, as defined in §1026.58(b)(7).
(c) Submission of agreements to Bureau—
(1) Quarterly submissions. A card issuer must make quarterly submissions to the Bureau, in the form and manner specified by the Bureau. Quarterly submissions must be sent to the Bureau no later than the first business day on or after January 31, April 30, July 31, and October 31 of each year…”
Keep in mind that the rule does contain a de minimis exemption in section 1026.58(c)(5) for financial institutions with fewer than 10,000 open credit card accounts as of the last business day of the calendar quarter.
A credit union’s submission must contain several pieces of information:
- Identifying information about the credit union and the agreements submitted, including the credit union’s name, address, and identifying number (such as a tax identification number);
- The credit card agreements that the credit union offered to the public as of the last business day of the preceding calendar quarter that the card issuer has not previously submitted to the Bureau;
- Any credit card agreement previously submitted to the CFPB that was amended during the preceding calendar quarter and that the card issuer offered to the public as of the last business day of the preceding calendar quarter; and
- Notification regarding any credit card agreement previously submitted to the CFPB that the credit union is withdrawing.
Because the rule’s requirement was suspended for several quarters, there may be new or withdrawn agreements that the credit union has not previously submitted or provided notice to the CFPB, as applicable. The rule seems to require credit unions to look back over the course of the past year for any new card or withdrawn agreements that were not part of prior submissions to the CFPB. As far as amended agreements, the rule only states that those agreements amended in the past quarter require submission although NAFCU has reached out to the CFPB for clarification on this point.
How to submit credit card agreements. To meet the upcoming May 2 deadline, the CFPB will no longer send the old submitting spreadsheet to card issuers. Instead, the CFPB set up an email address for submitting card agreements:
“You can [submit agreements] by emailing [the CFPB] links to (or webpage addresses for) the consumer credit card agreements that you post on your public website. Current regulations require you to post on your public website a complete set of the consumer credit card agreements that you offer to consumers. (§ 1026.58(d).) The agreements you have to post on your public website are the same as those you need to submit to the Bureau. As a result, sending us the relevant links or webpage addresses is the easiest and most straightforward way to meet your submission requirement.
Include in your email the name and address of the issuer that offers the product, plus a unique identifying number for the issuer such as a DUNS [Data Universal Numbering System] or RSSD [Replication Server System Database] number. Sending us that identifying information plus links or webpage addresses to your properly posted agreements is sufficient to meet all your submission obligations under § 1026.58(c). No other information is required. (Comment 58(c)(1)-3.)
Although the Bureau believes that issuers will generally find that emailing agreement links or webpage addresses to the Bureau is the fastest and simplest way to submit the required agreements, you may also comply by emailing us pdf copies of all the agreements you offered to the public as of the end of March 2016. Alternatively, you may email us the agreements and information identified in § 1026.58(c)(1)(ii), (iii), and (iv). Whatever submission method you choose, remember to include your identifying information.”
The CFPB went on to clarify that these emails should not be sent in an encrypted format and that instructions will be updated for future deadlines (i.e. August 1 and October 31, 2016). Submissions should be sent to CardAgreements@consumerfinance.gov and the CFPB will provide a confirmation of receipt within two business days.
ICYMI (In Case You Missed It). I also wanted to flag a couple of issues for our blog readers that may be of interest from earlier in the month:
- SCRA Mortgage Protection – The Servicemembers Civil Relief Act contains a provision that protects servicemembers from foreclosure without either a court order or a waiver for 90 days after active duty service ends. Congress has temporarily extended this time period multiple times for periods of up to one year. As we blogged about back in January, the most recent extension of the 90 day time period expired back on December 31, 2015. However, on March 21, 2016 Congress passed a bill that extends the one year protection period through December 31, 2017. The bill is also retroactive to January 1, 2016. President Obama is expected to sign this bill soon. Again, this is not an April Fool’s joke, Congress really did pass a bill!
- NCUA Amends Investments Rule on Bank Notes – at its March meeting, the NCUA Board finalized a rule that changes the maturity requirement for bank note investments, detailed in section 703.14(f)(5). The current rule limits federal credit unions to investing in bank notes with an original weighted average maturity of less than 5 years. The amendment removes the word “original” to provide a little more flexibility to FCUs for these investments.
- CFPB Issues Advisory on Preventing Elder Abuse – On March 21, the CFPB issued an advisory on preventing and responding to elder financial exploitation and a report of recommendations. These resources may be helpful to credit unions concerned about addressing these kinds of issues as they arise with members.
- NCUA March Edition of The NCUA Report, 2015 Annual Report – The March edition of The NCUA Report came out early last week and includes articles on moving to an 18 month exam cycle, the MBL rule and financial literacy. This month NCUA also issued its 2015 Annual Report, which reviews the agency’s objectives for last year, assesses performance such as the agency’s priority goals and includes financial information.
Finally in celebration of Friday, here’s how Lemmy recovers from a puppy play date (or how some of us may feel after a busy week):