Synchrony issued approval order for use of dual usage credit cards

The Consumer Financial Protection Bureau issued a compliance assistance sandbox approval order to Synchrony regarding its proposal to develop a dual-feature credit card. The card is designed for consumers with a new or poor credit history to establish or reestablish a favorable credit history, according to a press release.

Synchrony will offer a lower secured use rate for eligible account holders that will graduate to unsecured use after 12 months. The terms of use will be disclosed at the opening of the dual-feature credit card account and then redisclosed with the opportunity to opt-in to unsecured use.

The card will be issued under the CAS policy that offers businesses facing regulatory uncertainty a “safe harbor” from liability under specified legal provisions.