Deferred and waived interest programs, convenience checks, promotional rates, and grace periods are popular credit card features with consumer, creditors, and retailers – as well as the Consumer Financial Protection Bureau (CFPB). Last year the CFPB signaled to the industry that it had concerns about use of these loan features and doubts regarding consumer understanding of the proper use of credit containing these features. Earlier this week the CFPB issued Bulletin 2014-02, which provides more detailed guidance on the marketing of grace periods and promotional rates for credit cards.
It is important to keep in mind that although the Bulletin was directed to credit card issuers and credit card programs, it should serve as a lesson for any creditor that offers credit with similar features. Any creditor that offers deferred or waived interest programs should incorporate this guidance into their policies and procedures.
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