The Consumer Financial Protection Bureau issued a statement on June 3 relaxing the requirements for some electronic disclosures given for requests by consumers made via telephone for credit card plans. The CFPB acknowledged that credit card issuers are receiving more calls and may have limited staffing due to the pandemic. Many institutions are asking for relief from certain written disclosures in accordance with Regulation Z.
The Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) allows legally required written disclosures to be given electronically provided certain conditions are met. The E-Sign Act has a variety of different requirements, which include, but are not limited to the consumer’s affirmative consent to receive electronic disclosures, specific disclosures prior to sending the documents electronically, and the consumer’s consent in a manner that reasonably demonstrates the consumer can access the documents in the same manner in which the consent is provided. As noted in the CFPB’s statement, credit card issuers have stated that obtaining E-Sign consent over telephone proves difficult as calls may be dropped, the calls require more time with the limited staff available, lengthy call-wait times, or consent may require multiple calls.
Based on the aforementioned difficulties, the CFPB stated it will not cite a violation in an examination or bring an enforcement action for disclosures typically required to be in writing for open-end, non-home secured credit plans regulated by Regulation Z that occurred during the pandemic that did not comply with the E-Sign Act. More specifically, this leniency will include only account-opening disclosures and temporary rate or fee reduction disclosures discussed via telephone. However, the issuer must obtain consent to the electronic delivery of disclosures along with affirmation from the consumer that he or she has the ability to access and review these electronic disclosures. Further, the issuer must take reasonable steps to verify the consumers’ electronic contact information.