back Back

Consumer Financial Protection Bureau issues Synchrony approval order to facilitate the use of dual usage credit cards

By Pavithra R

January 04, 2021

  • Consumer
  • USA

Consumer Financial Protection Bureau issues Synchrony approval order to facilitate the use of dual usage credit cardsThe Consumer Financial Protection Bureau (Bureau) issued a compliance assistance sandbox (CAS) approval order to Synchrony Bank (Synchrony), a federal savings bank and a wholly-owned subsidiary of Synchrony Financial Inc., regarding their proposal to develop a dual-feature credit card.

Synchrony’s application focuses on the secured credit card market; specifically, it concerns a proposed “dual-feature credit card account” (DFCC). Synchrony intends to offer a lower rate on secured use with the opportunity for eligible account holders to graduate to unsecured use after 12 months. Therefore, as with other secured credit cards, a consumer must provide a security deposit to open a DFCC card account. After at least one year, a DFCC customer that clears certain eligibility thresholds is offered the opportunity to graduate to use the unsecured feature of the account on terms that were disclosed at the opening of the DFCC account and then redisclosed in connection with the opportunity to opt-in.

The card is designed for consumers with a limited or damaged credit history as a tool that can be used to establish or reestablish a favourable credit history. The DFCC, as described by Synchrony, seeks to provide transparency about the cost difference between the secured and unsecured features, while making the process of graduating to unsecured use as seamless, clear, and straightforward as possible for the consumer that wants to take advantage of any opportunity to graduate.

Issued under the CAS Policy from last year, a CAS approval offers an entity confronting regulatory uncertainty a “safe harbor” from liability under specified legal provisions. Entities are provided safe harbor for specified conduct that the Bureau finds compliant with those legal provisions, subject to good faith compliance with the terms of the approval. The CAS Policy implements the existing safe harbor approval mechanisms provided under the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, or as in this case, the Truth in Lending Act. The duration of this approval is three years.

Previous Article

January 04, 2021 secures €450k via Crowdcube’s equity crowdfunding

Read More
Next Article

January 04, 2021

Tamam, Zain Group’s FinTech subsidiary officially licensed by SAMA

Read More

IBSi Daily News Analysis

Data privacy

July 16, 2024


Rise in sophisticated attacks, state-level threats, and increased ransom DDoS Incidents

Read More

IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News


Ajman Transport Authority & BPC digitize payments for UAE commuters

Read More


JTL-Software and Mollie partner on e-commerce payments

Read More


Slope raises $65m in equity and debt funding from J.P. Morgan & others

Read More

Related Reports

Sales League Table Report 2024
Know More
Global Digital Banking Vendor & Landscape Report Q2 2024
Know More
NextGen WealthTech: The Trends To Shape The Future Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q1 2024
Know More

IBSi Sales League Table

The industry acknowledged barometer of global banking technology vendor performance!
Get your copy now!
Get your copy now! IBSi Sales League Table 2024