Resources to help you navigate the changing regulatory landscape

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CFPB Report Highlights Credit Card Rewards, Programs, Concerns

The Consumer Financial Protection Bureau (CFPB) released a new report addressing concerns raised by consumers regarding credit card rewards programs.

According to the report, consumers have encountered several issues with these programs, including:

  • Credit card issuers impose vague or hidden conditions that keep consumers from receiving rewards. Consumers indicate that requirements detailed in the fine print of rewards programs’ terms and conditions do not match marketing materials, turning sign-up offers or other promotional rewards into a “bait and switch.”
  • Companies devalue rewards. Consumers mention that issuers and merchant partners reduce the value of rewards already earned by increasing the number of points or miles needed for a redemption. Consumers also observe that card issuers do not protect them from rewards program partner decisions to remove benefits from rewards programs or increase requirements for achieving status.
  • Consumers encounter redemption issues with earned benefits. Consumers describe customer service issues and technical glitches that block or delay redemption, which prevent an easy transfer of rewards to third-party merchants. Issuers often redirect cardholders to partners and fail to reinstate rewards when consumers are unable to redeem them through no fault of their own.
  • Companies revoke previously earned rewards. Consumers indicate their points, cash back, and miles vanish when an account closes. Consumers also describe financial institutions revoking rewards on open and active accounts through expiration policies, which is often done without prior communication.

The California and Nevada Credit Union Leagues remain committed to collaborating with the CFPB to address concerns surrounding the perception of credit card rewards programs. These programs provide tangible benefits to numerous consumers who responsibly manage their credit.

The Leagues will remain vigilant in monitoring this issue and will keep credit union leaders informed of any developments as it evolves.

Access the ‘Compliance Hotline’
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:

Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!

Additionally, other League-member compliance resources include:

  • ViClarity
  • CU PolicyPro
  • ComplySight
  • InfoSight
  • CU Store
  • Record Retention Guide
  • GRC Technology Solutions

For more information, email Lisa Quaranta.

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