What the NFL the CFPB, and Regulation Z have in common

by: Henry Meier

Every year the NFL gives its referees “points of emphasis”-violations of the rules that they want refs to impose more strictly with the hope of making the game better. For example, this year the NFL has decided that, in a sport where oversized men with above average speed crash into each other every 45 seconds, the game would be better if no one touches the wide receiver after five yards lest teams be able to play defense and people not enjoy playing fantasy football.

Just like the NFL has its points of emphasis and tells everyone exactly what they are so does the Bureau That Never Sleeps-the CFPB. Its latest point of emphasis comes in the form of a bulletin issued last week, is promotional credit card rates that don’t accurately disclose restrictions that companies place on offers. Given that the CFPB has the power to interpret the law, penalize what it deems to be deceptive practices and issue amendments to Regulation Z its best you double-check your own promotional material.

Under Regulation Z banks and credit unions can offer promotional rates which the regulation defines as “any annual percentage rate applicable to one or more balances or transactions on an open-end plan for a specified period of time that is lower than the annual percentage rate that will be in effect at the end of that period on such balances or transactions.”

For example, an offer of 0% interest on balance transfers. What has the Bureau concerned is that some card issuers do not “adequately convey in their marketing materials that a consumer who accepts such a promotional offer will lose his grace period on new purchases if he does not pay the entire statement balance, including the total amount subject to the promotional APR, by the payment due date.”

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