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Expedited CARD Act moves forward with CU amendments
WASHINGTON (10/23/09)--The House Financial Services Committee on Thursday approved H.R. 3639, the Expedited CARD Reform for Consumers Act of 2009. This legislation would move all of the outstanding effective dates in the Credit CARD Act to Dec. 1. An amendment that would exempt depository institutions with under 2 million credit cards in circulation from the expedited effective dates contained in the bill, offered by Rep. Shelley Moore Capito (R-W.V.) and Rep. Brad Sherman (D-Calif.), was added to the legislation via voice vote. Sherman also joined Rep. David Scott (D-Ga.) to offer an amendment to strike from the bill the expedited effective dates for gift cards. This amendment was also added via voice vote. The Credit Union National Association has supported both of these amendments and worked closely with these offices on the amendments. CUNA in a letter to committee Chairman Barney Frank (D-Mass.) and ranking Republican Spencer Bachus (R-Ala.) further praised the Capito/Sherman amendment, saying that it “recognizes the burden” that the expedited effective dates provided by H.R. 3639 would have on small issuers. “Many steps need to be taken before credit unions and others will be able to comply” with the CARD Act in “any orderly fashion,” CUNA President/CEO Dan Mica said, adding that “while the three month period between December and February is a relatively short period of time, it is a critical period of time for credit unions to take these necessary steps.” Federal Reserve Board Chairman Ben Bernanke has also presented the Fed’s views on H.R. 3639, saying that while he could not predict how the accelerated CARD Act effective date would affect interest rates and availability of credit to consumers, the new date “would mean that consumers would receive important benefits and protections earlier.” Responding to a series of questions from Bachus, Bernanke added that the Fed would “issue final regulations without waiting for comments” if the new, accelerated compliance date of Dec. 1 prevented them from receiving industry comments in a timely fashion. The Fed may also have to implement portions of the CARD Act governing fees and disclosures for gift and other prepaid cards, credit card penalty fees, and rate increases without advance public comment if the effective dates of those provisions are moved forward to Dec. 1. Both large and small creditors “must make extensive changes to their systems and business models” to comply with the CARD Act, and Bernanke said that the amount of time needed to comply with the act “may vary by creditor and provision.”
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