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CARD Act 21-day fix homebuyer tax credit are now law
WASHINGTON (11/10/09)—Starting the weekend off right for credit unions, President Barack Obama on Friday signed the CARD Act Technical Corrections Act (H.R. 3606) into law. He also penned his name to the bill extending the homebuyer tax credit. The new CARD Act law fixes a situation that has been plaguing credit unions since the original Credit Card Accountability, Responsibility and Disclosure (CARD) Act was signed in May. That bill incorrectly implied that a 21-day late notice requirement applied to all open-end credit, and the Credit Union National Association (CUNA) has argued that it had always been lawmakers’ intent to apply the provision only to credit cards. The corrections bill states clearly that the late-notice provision applies only to credit cards. CUNA has worked closely with lawmakers and their staffs warning that the drafting mistake would prevent credit unions from granting biweekly payment plans to their members, from sending members consolidated billing statements, and would force them to change payment due dates for members that had previously chosen due dates based on their specific financial circumstance. The situation was particularly problematic for Home Equity Lines of Credit (HELOC) because the due date of a HELOC is often a contractual term. CUNA President/CEO Dan Mica hailed the quick and decisive work by the House and Senate on the correction bill and the president’s very timely signing of the measure. “By signing the law, the president gives credit unions the opportunity to go back to doing what they do best: Serving their members with affordable and needed financial services. "Credit unions can continue the practices of sending members consolidated billing statements, changing payment due dates for members who had previously chosen a due date based on their specific financial situation, and continuing bi-weekly payment plans--all essential tools consumers use to manage their finances in the ways that best suit their needs," Mica noted. Mica also noted the efforts of “the leagues and the many credit unions” who worked with lawmakers to get the fix into law. “Without their efforts,” Mica said, “credit unions would still be reeling from the unintended consequences of this law.” The President also signed legislation extending the $8,000 first-time homebuyer tax credit that was set to expire at the end of the month. That bill also creates a new $6,500 tax credit for current homeowners who purchase a new home between Dec. 1, 2009 and April 30, 2010. Use the resource link below for comprehensive compliance information about “un-complying” with the 21-day requirement now that the fix has been enacted.


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