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CUNA urges Fed Address 21-day compliance issue
WASHINGTON (7/31/09)--The Credit Union National Association (CUNA) in a Thursday letter urged Federal Reserve Board Chairman Ben Bernanke to delay the Aug. 20th compliance date of the 21-day rule as it applies to open end credit other than credit cards under the Fed's interim final rule to implement the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act). Under the rule, credit unions and other creditors must mail or deliver a periodic statement to borrowers for open end credit 21 days before the payment is due. Otherwise, the creditor may not treat payments as late for any purpose, including filing a credit report even if the payment is late. CUNA noted that many credit unions will need to make dramatic changes to their systems to comply and it is impossible for them to make such changes by the August compliance date. CUNA called on the Fed to exercise its authority under the Truth in Lending Act to give credit unions more time to comply with the rule change, which takes effect on August 20. CUNA also urged the Fed to allow credit unions to continue to use consolidated statements by providing the payment due dates for the current month and the next month on each member’s monthly statement, thus providing the necessary 21-day notice. Credit unions would still need time to implement these changes, CUNA said. In the letter, CUNA President/CEO Dan Mica said that “credit unions are facing horrendous problems” as they work to comply with the 21-day notice provisions of the CARD Act, which affect general lines of credit, credit lines associated with share draft and checking accounts, signature loans, home equity lines of credit, and other loans that are permitted under open-ended lending. Credit unions, “including those with multi-featured plans,” would be forced to “dismantle consolidated statement systems” and other procedures that “have been in place for decades” to comply with the 21-day rule by providing separate account statements, Mica added. This process will be expensive for both credit unions and their membership, who would ultimately pay for these modifications, Mica said. Mica has also asked National Credit Union Administration chairman Michael Fryzel to communicate the concerns of credit unions to the Fed.
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