The Credit Card Act of 2009 Brings Email Opt-out Front and Center

It isn't often that bipartisanship wins the day among politicians, but when an issue arises that stirs the ire of the public such as the credit card industry has done there is a sudden ability to get things done. This was evident in the recently passed Senate Bill 414, more commonly referred to as the "Credit Card Act of 2009." In an amazingly bipartisan vote of 90-5 the bill passed. One of the main departures from the norm with this is the fact that the regulation does not take place for nine (9) months. Part of the reasoning behind this delay was a need to implement technology changes to meet the mandates of the bill.

Another area of interest within this bill is the inclusion of the wording "each appropriate Federal banking agency" which extends this bill to Banks, Savings and Loans, and Credit Unions. So, it would appear the Federal government fully intends to ensure that all credit lending institutions will fall under this complete overhaul of the "Consumer Credit Protection Act."

Now that all banking agencies fall under this act, what technology issues should they be aware in this bill? One main area of concern is highlighted in SEC.103 Limits of Fees and Interest Charges, under the Opt-Out piece of the legislation. This basically gives consumers the right to opt-out of over-the-limit transactions if fees are imposed. Under paragraph (2) (A) and (B) titled Notification by Consumer there is an interesting piece of language that refers to technology:

(A) "through the notification system maintained by the creditor under paragraph (4); or

(B) "by submitting to the creditor a signed notice of election, by mail or electronic communication, on a form issued by the creditor for purposes of this subparagraph."

What this bill lays out in paragraph 4 is there are several defined notification system options such as a toll free number, Internet address, and website. So, in addition to these specific areas defined, there is also the ability for banks to use electronic communication such as e-mail, in addition to those specific areas noted in paragraph 4, to submit and receive a signed notice of election to opt-out of those transactions.

Now that e-mail could very well be one of the opt-out vehicles used by a banking institution that falls under this act, it makes more sense than ever for banks to archive in order to have a strict accounting of e-mail transactions. By using products such as Estorian's LookingGlass, banks have the ability to use their existing e-mail infrastructure as a communication vehicle to transmit and/or receive signed notices of election. Without the ability to give a strict accounting of those notices banks limit their customer's options in providing signed notices of election.

Although it might be debatable whether this type of legislation actually helps consumers, it does demonstrate how consumer outrage toward a specific business sector can stoke a bipartisan fire. It also shows how the Federal government views technology as a way to ensure consumers can effectively and efficiently communicate their desired approach as it pertains to the services mandated within regulation.

As the Federal government continues its accelerated regulatory path, it stands to reason that there will be continuing emphasis on technology as the preferred means of communication between businesses and consumers. By using products such as LookingGlass, companies can continue to leverage their existing infrastructure to deliver services, as well as continue to meet current and future regulatory requirements.