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Changes to CARD Act in view
WASHINGTON (10/8/09)--The Credit Union National Association (CUNA) has advised leaders of the House Financial Services Committee that credit union members may face increased costs and reduced services if technical corrections to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act are not made. In a letter sent Wednesday to the committee chairman Barney Frank (D-Mass.) and ranking member Spencer Bachus (R-Ala.), CUNA President/CEO Dan Mica reiterated that credit unions are “currently reeling from an unintended consequence of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act,” enacted earlier this year. In the letter, CUNA advocates that legislators support H.R. 3606, which was recently introduced by Rep. Peter Welch (D-Vt.). This legislation would change troublesome Section 106 of the CARD Act, a provision that prohibits creditors from treating payments as being late unless the creditor adopts reasonable procedures to ensure that periodic statements are mailed or delivered to the consumer no later than 21 days before the payment due date. As written, the section applies to all open-end loans, including general lines of credit, lines of credit associated with share draft and checking accounts, signature loans, and other forms of loans, not just credit cards. Welch’s bill would insert the words “a credit card account under” into Section 106, thereby removing its application from the other forms of open-end credit. CUNA believes the provision was originally intended to cover only credit card accounts and was inadvertently changed during the legislative process. CUNA has highlighted some of the problems faced by credit unions due to the current structure of the CARD Act provision. One example given in the letter was an increase in costs associated with an inability to provide credit union members with consolidated billing statements, a change that Mica estimated could cost credit unions as much as $2.25 per month per loan. Credit union members may also lose the right to choose their payment date and would see changes to the terms of their home equity lines of credit if the CARD Act legislation is not altered, according to CUNA. "We hope the Committee will agree that a technical correction is appropriate and will support passage of technical corrections legislation as quickly as possible,” Mica wrote. To read the full letter, use the resource link.


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