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John Zasada, Compliance Consulting Director, Financial Institutions Group

On June 3, 2020, the Consumer Financial Protection Bureau (CFPB) issued a statement regarding the Electronic Signatures in Global and National Commerce Act (E-Sign) and credit card disclosures. Consumers are increasingly reaching out to credit card issuers seeking to reduce their APR or fees or to open a new account. In many cases, Regulation Z requires written disclosures in order to effectuate the change or open a new account. These Regulation Z disclosures can be provided electronically if, among other provisions, the following three requirements are met:

  • The issuer obtains a consumer’s affirmative consent to the electronic provision.
  • The issuer provides certain disclosures to the consumer prior to obtaining the consumer’s consent.
  • The consumer consents electronically, or confirms his or her consent electronically, in a manner that reasonably demonstrates that the consumer can access information in the electronic form that will be used to provide the information that is the subject of the consent.

It is this third requirement the CFPB statement pertains to. The CFPB does 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 the written disclosures required by Regulation Z, 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. During the phone call, the CFPB does expect the issuer to take reasonable steps to verify the consumers’ electronic contact information.

Note the CFPB stated that they do not intend to apply this E-Sign flexibility to other Regulation Z disclosure requirements.

For more information, contact Doeren Mayhew’s regulatory compliance specialists.