Correct Success: Consumer Financial Protection Bureau Issues Approval Order to Facilitate the Use of Dual Usage Credit Cards

WASHINGTON, D.C. — The Client Monetary Safety Bureau just lately issued a compliance help sandbox (CAS) approval order to Synchrony relating to their proposal to develop a “dual-feature bank card.”

The cardboard is designed for shoppers with a restricted or broken credit score historical past as a device that can be utilized to determine or reestablish a positive credit score historical past. Synchrony intends to supply a decrease price on secured use with the chance for eligible account holders to graduate to unsecured use after 12 months. The phrases of each secured use and unsecured use will probably be disclosed on the opening of the dual-feature bank card account. The phrases will then be redisclosed with the chance to opt-in to unsecured use.

Issued beneath the CAS Policy from final yr, a CAS approval provides an entity confronting regulatory uncertainty a “secure harbor” from legal responsibility beneath specified authorized provisions. Entities are provided secure harbor for specified conduct that the Bureau finds compliant with these authorized provisions, topic to good religion compliance with the phrases of the approval. The CAS Coverage implements the present secure harbor approval mechanisms offered beneath the Digital Fund Switch Act, the Equal Credit score Alternative Act, or—as on this case—the Fact in Lending Act. The length of the approval on this case is three years.

A replica of the CAS approval order issued to Synchrony might be discovered right here: https://files.consumerfinance.gov/f/documents/cfpb_synchrony_approval-order_2020-12.pdf.

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