Philadelphia partner Bill McSwain and associate Rick Haggerty published an article in Law360 titled, “Beware CFPB Scrutiny of Promotional Credit Card Offers.’”
The article discussed how from its inception, the Consumer Financial Protection Bureau (CFPB) has identified what it considers to be deceptive practices in the credit card industry to be one of its most pressing concerns. Consistent with that position, the CFPB recently put credit card companies that offer special promotional rates “on notice” that they can expect increased scrutiny.
In a bulletin issued on September 3, the CFPB warned that it will be on the lookout for “deceptive and/or abusive acts and practices in connection with solicitations that offer a promotional annual percentage rate (APR) on a particular transaction over a defined period of time.” The types of transactions specifically mentioned in the bulletin include “convenience checks, deferred interest/promotional interest rate purchases, and balance transfers.”
Bill and Rick concluded that the recent bulletin demonstrates that credit card companies need to exercise vigilance in all of their marketing practices and in all communications with consumers. CFPB Director Richard Cordray has consistently said that credit card practices are one of the top items on the CFPB’s agenda. This bulletin shows that approach will not be changing anytime soon.