On June 8, 2017, the Consumer Financial Protection Bureau (CFPB) held a Consumer Advisory Board (CAB) meeting, at which CFPB Director Richard Cordray discussed deferred-interest products. The CFPB also included in a press release a sample letter that Director Cordray sent to “top retail credit card companies” expressing concern about their use of deferred-interest programs and encouraging them to consider using more transparent promotions.

The Director’s letter referred to 2015 CFPB research on deferred-interest programs. According to this research, “nearly 90% of deferred interest promotional spending is made by consumers with prime or superprime credit scores. Consumers with deep subprime scores and core subprime scores account for 3% and 8% of deferred interest promotional spending, respectively.” Director Cordray said in the letter that while deferred-interest programs “offer substantial benefits to some consumers, [they] carry significant costs and risks to others.” The Director added that deferred-interest programs “may lack transparency to consumers, as a consequence of the back-end pricing that can be a feature of these products.”