Credit, Debit & Prepaid Cards
Practice Overview
Buckley represents issuers and servicers of credit, debit, and prepaid cards in a broad range of regulatory, enforcement, and litigation matters involving consumer, small business, and corporate cards. These products range from general purpose to virtual cards designed for single use. Our experience spans the spectrum of federal laws and regulations, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act (ECOA), Fair Credit Reporting Act (FCRA), Electronic Fund Transfer Act (EFTA), as well as state laws covering a host of issues ranging from small business charge cards to the electronic delivery of disclosures. Our clients include long-standing industry leaders and new entrants that seek high-quality, practical, and effective advice to advance their business goals and ensure compliance with the complex laws and regulations governing this area.
We analyze the regulatory environment in which card issuers and servicers operate, and assist in making the changes necessary to stay compliant with applicable laws and regulations, as well as examiner expectations and industry standards. Our lawyers counsel clients with respect to proposed rules, draft comment letters, and work with regulators to ensure that industry concerns are heard. We analyze new laws, rules, guidance, and enforcement actions so that clients can make appropriate adjustments to their systems, procedures, and disclosures. Our team helps clients respond to changes in state law preemption as a result of Dodd-Frank, and aids them in determining the appropriate compliance approach to specific state laws.
We advise our clients on the development of innovative card products and services within a multifaceted regulatory framework. Our attorneys assist in structuring products and assessing the risk of proposed products, terms, models, and marketing strategies. We develop comprehensive and consumer-friendly disclosures to reduce the risk of both regulatory violations and claims of unfair, deceptive, and abusive acts and practices (UDAAP). We also work with clients in preparing for and responding to examinations, consumer complaints, and pre-litigation issues, as well as stand ready to respond to enforcement actions and defend in litigation if necessary. Our team offers legal counsel on a variety of business transactions for which our card clients are regularly involved, including structuring and negotiating private label deals. We also advise on payment system issues and provide general legal guidance on charter powers, rate exportation, and other banking topics.
Representative work in this area includes:
- Advised numerous large and mid-sized card issuers on the implementation of the amendments to the Military Lending Act regulations
- Helped multiple startups launch credit card programs
- Helped established card issuers redesign existing rewards programs, create benchmarks against best in class standards, conduct risk assessments, integrate grandfathered balances, and terminate legacy programs
- Helped established card issuers launch new small business, charge card, corporate card, and prepaid card programs
- Advising card issuers on matters relating to CFPB examinations, including compliance management, deferred interest, and technical compliance with consumer financial laws and regulations
- Assisting card issuers in standing up and maintaining ongoing fair lending statistical analysis programs; conducted a file review of judgmental overrides
- Represented several card issuers in CFPB enforcement actions relating to add-on products
Articles
"CFPB credit stance has broad specialty finance implications" by Jeffrey P. Naimon (Law360)
The Consumer Financial Protection Bureau issued an advisory opinion at the end of November that could compel specialty-finance companies — including those offering income-share agreements, litigation funding, merchant cash advances and earned wage access products — to take a fresh look at whether...
Articles"Accurate FCRA reporting during Covid-19" by Marshall T. Bell and Jessica L. Pollet (Bloomberg Law)
As financial institutions respond to a flurry of regulatory recommendations and mandates in response to the Covid-19 crisis, those relating to consumer reporting may be among the most difficult to decipher and operationalize. Federal and state authorities have made it clear that they expect...
ArticlesSpecial Alert: CARES Act places significant burdens on servicers of consumer debt but provides some relief to depositories
President Trump late last week signed the Coronavirus Aid, Relief, and Economic Security Act that attempts to soften the negative economic effects of the Covid-19 pandemic on consumers, including by suspending payments for certain student loan borrowers and enabling mortgage loan borrowers to...
Special AlertsSpecial Alert: Madden Class Action Moves Forward
On February 27, the U.S. District Court for the Southern District of New York issued a ruling in Madden v. Midland Funding, LLC , [1] holding that New York’s fundamental public policy against usury overrides a Delaware choice-of-law clause in the plaintiff’s credit card agreement. The court allowed...
ArticlesCredit Cards 2016: Consumer Protection in Focus
The past year has seen heightened CFPB interest in the following areas: (i) deferred interest and rewards, (ii) limited English proficiency consumers, and (iii) the recent revisions to the Military Lending Act (MLA). Pursuing simplicity in the design of product features and closely following...
ArticlesSpotlight on the Military Lending Act, Part 1: Did the Final Rule Improve on the Proposal?
On July 22, 2015, the Department of Defense (“Department”) released its final rule amending the regulations that implement the Military Lending Act (“MLA”), which means that a wider range of credit products—including open-end credit—offered or extended to active duty service members and their...
ArticlesSpecial Alert Update: OCC Revises Guidance Regarding Consumer Protection Requirements to Overdraft Lines and Protection Services
On March 6, 2015, the OCC issued its revised “Deposit-Related Credit” booklet (“DRC booklet”) of the Comptroller’s Handbook, which replaced the “Deposit-Related Consumer Credit” booklet issued on February 11, 2015 (previously covered in this Special Alert ). While the new booklet covers the same...
ArticlesSpecial Alert: OCC Guidance Applies Consumer Protection Requirements to Overdraft Lines and Protection Services
UPDATE: On February 20, the OCC announced that it would be removing the “Deposited-Related Consumer Credit” booklet, originally issued on February 11, from its website. The OCC’s February 11 booklet seemingly required banks to change overdraft protection services, however the agency has since...
Articles
News & Blogs
House Republicans question CFPB’s card late-fee proposal
On March 1, several Republican House Financial Services Committee members sent a letter to CFPB Director Rohit Chopra expressing concerns over the Bureau’s credit card late fee proposal. Among other things, the lawmakers claimed that last year the Bureau broke precedent by failing to address, for...
InfoBytesCFPB highlights problems with cash-benefit programs
On March 1, the CFPB released an Issue Spotlight exploring the challenges that recipients of public benefits programs offering cash assistance face when accessing funds through financial products or services. According to the report , financial products used to deliver public benefits, such as...
InfoBytesD.C. Circuit says CFPB’s Prepaid Rule does not mandate model disclosures for payment companies
On February 3, the U.S. Court of Appeals for the D.C. Circuit reversed a district court’s decision that had previously granted summary judgment in favor of a payment company and had vacated two provisions of the CFPB’s Prepaid Rule: (i) the short-form disclosure requirement “to the extent it...
InfoBytesCFPB proposal targets late fees on cards
On February 1, the CFPB issued a notice of proposed rulemaking (NPRM) to amend Regulation Z, which implements TILA, and its commentary to better ensure that late fees charged on credit card accounts are “reasonable and proportional” to the late payment as required under the statute, the Credit Card...
InfoBytesCFPB seeks feedback on credit cards
On January 24, the CFPB issued a notice and request for information (RFI) seeking public feedback on several aspects of the consumer credit card market in accordance with Section 502(b) of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act). The CARD Act was enacted...
InfoBytesFTC orders card company to let merchants use other debit networks
On December 23, the FTC ordered a payment card company to stop blocking merchants from using competing debit payment networks. According to an agency investigation, the company allegedly violated provisions of the Durbin Amendment, which requires “banks to enable at least two unaffiliated networks...
InfoBytesCFPB issues fall supervisory highlights
On November 15, the CFPB released its fall 2022 Supervisory Highlights , which summarizes its supervisory and enforcement actions between January and June 2022 in the areas of auto servicing, consumer reporting, credit card account management, debt collection, deposits, mortgage origination,...
InfoBytesCFPB releases annual college credit card report
On October 13, the CFPB released its annual report to Congress on college credit card agreements. The report was prepared pursuant to the CARD Act, which requires card issuers to submit to the CFPB the terms and conditions of any agreements they make with colleges, as well as certain organizations...
InfoBytesFed finalizes debit card transaction requirement changes
On October 3, the Federal Reserve Board adopted a final rule amending Regulation II, which implements Section 920 of the EFTA, to require that each debit card transaction, including “card-not-present” transactions, must be able to be processed on at least two unaffiliated payment card networks. The...
InfoBytesRepublican senators and states oppose gun-store MCC
On September 20, twenty-four state attorneys general sent a letter to the CEOs of three credit card companies opposing the International Organization for Standardization’s (ISO) recommendation to create a merchant category code (MCC) for gun stores to use when processing credit and debit card...
InfoBytes
Press Releases & Announcements
BuckleySandler Hosts Eighth Annual Fair Lending Today Conference
BuckleySandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by BuckleySandler attorneys...
Press ReleasesBuckley Sandler Hosts Annual Fair Lending Today Conference
Buckley Sandler LLP hosted its annual Fair Lending Today conference in Washington, DC, March 15-16, 2015. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The roundtables and seminars were led by Buckley Sandler...
Press Releases
Our Credit, Debit & Prepaid Cards Team
Partners
Recent Blog Posts
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March 10, 2023
House Republicans question CFPB’s card late-fee proposal
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March 3, 2023
CFPB highlights problems with cash-benefit programs
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February 3, 2023
D.C. Circuit says CFPB’s Prepaid Rule does not mandate model disclosures for payment companies
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February 2, 2023
CFPB proposal targets late fees on cards
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January 27, 2023
CFPB seeks feedback on credit cards