Final CARD Act Rule Issued Suspending Submission of Credit Card Agreements

The CFPB has issued its final rule, effective April 17, 2015, temporarily suspending card issuers' obligations to submit their credit card agreements quarterly to the CFPB.  The stated purpose of the rule is to reduce the burden on the CFPB while it works to develop a more efficient electronic submission system.  In its Summary, however, the CFPB also acknowledges that the repository was of little value to consumers.  See Submission of Credit Card Agreements under the Truth in Lending Act (Regulation Z), 80 Fed. Reg. 21153, 21156 (Apr. 17, 2015). As noted by one commenter, the submission and record repository requirements imposed costs without benefits. Id. at 21157.  Other requirements under the CARD Act, including card issuers' obligation to post their currently offered agreement on their own websites would be unaffected. 

The provision of the CARD Act in question, 12 C.F.R. 1026.58(c), required card issuers to post agreements for open end consumer credit cards on their website and to submit them quarterly to the CFPB.    Under the prior rule, the agreements were manually submitted to the CFPB via email on a quarterly basis.  By its own admission, the CFPB acknowledges that the process was unnecessarily cumbersome on both the cards issuers and the CFPB.  The disclosed purpose of the proposed suspension is to allow the CFPB time to work on a more streamlined and automated electronic submission system.  Under the rule, submissions due April 30, 2015, July 31, 2015, October 31, 2015 and January 31, 2016 will not be required.  Submissions will resume on April 30, 2016.  See 12 C.F.R. 1026.58(g).  Notably, in response to the proposed rule, commenters urged the CFPB to consult with the financial institutions before finalizing any new technical specifications - perhaps through a notice and comment period.  Initial indications, however, suggest the CFPB will not be soliciting comments regarding the technical specifications.  Id. at 21155.

The rule does not affect the required annual submission of collect credit card agreements and related data, the biannual submission of credit card pricing and availability information, or the requirement that card issuers post agreements on their website.