We would like to discontinue using a P.O. box where we have been accepting mailed mortgage payments. Our notes, welcome letter, and periodic statements list the P.O. box address. Must we send notice to all customers that the P.O. box will be closed and payments must be sent to a new address? Or, can we post a statement on our website or only reach out only to those customers currently using the P.O. box?

We are not aware of any state or federal laws that specifically require you to formally notify customers that you will no longer be accepting payments at a P.O. box address, but we recommend providing ample notice to all of your customers and modifying your promissory notes to remove the P.O. box address.

In the context of open-end credit, Regulation Z permits lenders to establish “reasonable requirements” for loan payments. As noted in Regulation Z and its Official Interpretations, a credit card issuer may be barred from charging late fees for payments received at a new P.O. box address, unless the change in address does not delay the issuer from crediting payments (for example, where the issuer accepts payments sent to both the new address and the old address for a period of sixty days). Additionally, if you refuse to accept payments mailed to the P.O. box without providing reasonable notice, any action by your bank to place a loan in delinquency or charge late fees could be viewed as an unfair, deceptive, or abusive act or practice.

While those Regulation Z rules do not apply to all of your loans, we recommend following the guideline of establishing “reasonable requirements” for loan payments. Before your bank discontinues accepting payments at the P.O. box, we recommend providing notice in advance to all of your customers — not just to the customers who have used the P.O. box in the past, as there is no guarantee that other customers may wish to mail a payment and would refer to their promissory note listing the P.O. box address.

Because there are no express requirements for written notice when removing an available mailing address for loan payments, we recommend providing written notice to the affected customers, whether in electronic or printed form. We also recommend continuing to accept payments at your P.O. box for a certain period (such as sixty days) before discontinuing your use of the box, as suggested in the credit card example provided in the Regulation Z Official Interpretations.

Additionally, because the P.O. box address is included in your promissory notes, you may need to modify your promissory notes to reflect that payments to this address are no longer allowed. We recommend engaging your bank’s counsel to review the relevant loan documents, determine whether modifications are needed and the method of modification required, and ensure that your bank’s lien position will not be affected. Additionally, we recommend reviewing the promissory notes to confirm you are complying with any contractual notice requirements.

For resources related to our guidance, please see:

Regulation Z, Subpart B – Open End Credit, 12 CFR 1026.10(b) (“Specific requirements for payments—(1) General rule. A creditor may specify reasonable requirements for payments that enable most consumers to make conforming payments.”)

Regulation Z, Subpart B – Open End Credit, 12 CFR 1026.10(b) (“A creditor may specify reasonable requirements for payments that enable most consumers to make conforming payments . . . (2) Reasonable requirements for making payment may include: . . . (v) Specifying one particular address for receiving payments, such as a post office box.”)

Regulation Z, Subpart B – Open End Credit, 12 CFR 1026.10(f) (“If a card issuer makes a material change in the address for receiving payments or procedures for handling payments, and such change causes a material delay in the crediting of a payment to the consumer’s account during the 60-day period following the date on which such change took effect, the card issuer may not impose any late fee or finance charge for a late payment on the credit card account during the 60-day period following the date on which the change took effect.”)

Regulation Z, Subpart B – Open End Credit, Official Interpretations, Part 10(f), Comment 4 (“Examples. . . . ii. A card issuer changes the mailing address for receiving payments by mail from one post office box number to another post office box number. For a 60-day period following the change, the card issuer continues to use both post office box numbers for the collection of payments received by mail. The change in mailing address would not cause a material delay in crediting a payment because payments would be received and credited at both addresses. Therefore, a card issuer may impose a late fee or finance charge for a late payment on the account during the 60-day period following the date on which the change took effect.”)

Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2 (“Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact, . . . in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or damaged thereby.”)

UDAAP, 12 USC 5531(c)(1) (“The Bureau shall have no authority under this section to declare an act or practice in connection with a transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service, to be unlawful on the grounds that such act or practice is unfair, unless the Bureau has a reasonable basis to conclude that—

(A) the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers; and

(B) such substantial injury is not outweighed by countervailing benefits to consumers or to competition.”)

UDAAP, 12 USC 5531(d) (“The Bureau shall have no authority under this section to declare an act or practice abusive in connection with the provision of a consumer financial product or service, unless the act or practice—

(1) materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or

(2) takes unreasonable advantage of—

(A) a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service;

(B) the inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service; or

(C) the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.”)

UDAAP, 12 USC 5536(a) (“It shall be unlawful for—

(1) any covered person or service provider—

(A) to offer or provide to a consumer any financial product or service not in conformity with Federal consumer financial law, or otherwise commit any act or omission in violation of a Federal consumer financial law; or

(B) to engage in any unfair, deceptive, or abusive act or practice.”)