WASHINGTON (7/31/09)—As the Credit Union National Association (CUNA) continues to seek a regulatory or legislative remedy to a compliance problem associated with new Federal Reserve Board Credit CARD Act rules, CUNA also seeks credit union comment on the plan. CUNA President/CEO Dan Mica took the unusual step of personally encouraging credit unions to weigh in with the Fed on the issues surrounding the agency’s new interim final rule. (See related story: CUNA urges Fed: Address 21-day compliance issue.) The Fed recently issued that rule amending Regulation Z, the Truth in Lending Act, to implement the first stage of the Credit CARD Act, the full title of which is Credit Card Accountability, Responsibility and Disclosures Act of 2009. The new law is intended to establish fair practices for credit cards and other open-end credit plans. The Fed interim final rule requires creditors to adopt reasonable policies and procedures to ensure that periodic statements for any open-end consumer credit accounts are mailed or delivered at least 21 days before a payment is due. Failing that, a creditor is prohibited from charging a late fee or to otherwise consider the payment as late. The rule will also require creditors to provide a 45-day notice of a change in the interest rate or other significant changes to the terms of the credit card agreement. These provisions carry an Aug. 20 effective date and CUNA has sounded the alarm that such a short compliance timeframe for a complicated and entailed compliance process presents perhaps insurmountable problems for credit unions. About 2,500 credit union representatives tuned earlier this week for CUNA's audio conference on the requirements of the Credit CARD Act," which featured a Fed senior attorney and other experts to explore compliance issues. An archived version of the 90-minute session is available on the cuna.org website. In its Comment Call, CUNA asks credit unions to outline operational problems associated with providing periodic statements at least 21 days before the due date. Specifically CUNA asks:
* How are these problems different for credit cards, as opposed to other open-end credit? * How much time will you need to comply with the new rule with regard to the 21-day requirement for credit cards and how much time will be needed for other types of open-end credit?
CUNA also asks credit unions to describe the operational problems associated with providing the 45-day change-in-terms notice: Will you be able to comply with these provisions by Aug. 20? If not, how much more time will you need? Also on Reg Z issues, CUNA is offering four upcoming “Regulation Z eBoot Camp eSchool” session.
* Aug. 27 session will take a look at the basics of Regulation Z; * Sept. 3 session will feature a discussion of changes to disclosures at account opening and with credit card applications and solicitations; * Sept. 10 session will provide a review of changes to the information required on periodic statements; and * Sept. 17 session will look at the required changes for advertising, change in terms notices, the Credit CARD Act, and the Unfair & Deceptive Credit Card Practices Act.
Use the resource links below to access registration for the CUNA Credit Card Act audio conference, the CUNA eBoot Camp, and the Comment Call.