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Fed CARD Act approach needs changes CUNA
WASHINGTON (11/23/09)—The Credit Union National Association (CUNA) strongly endorsed part of a proposed Federal Reserve Regulation Z (Reg Z) rule that would clearly limit minimum payment warning disclosures to credit cards by recognizing the provision should not apply to other types of credit in which these minimum payment warnings were not intended. However, in a recent comment letter CUNA expressed significant opposition to other portions of the Fed’s plan. With regard to the minimum payment warning provisions, CUNA said the proposal would require creditors to indicate on periodic statement the amount a consumer could save by paying the balance in 36 months, as compared to only making the minimum payments. CUNA opposes this requirement and believes it would not provide meaningful information to a borrower because the factors that comprise this calculation will constantly change. Overall, the Fed proposal would implement provisions of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) that go into effect Feb. 22, 2010. CUNA told the Fed it strongly opposes any agency consideration to set a February 22, 2010 effective date, instead of the current July 1, 2010, for provisions of the Reg Z rules issued earlier this year that are not directly related to these CARD Act rules. “It should be the credit union’s decision as to whether it is feasible or desirable to comply with certain of these Regulation Z provisions prior to July 1, based on its own timetable and resources,” wrote CUNA Senior Assistant General Counsel Jeffrey Bloch. Also, creditors would be required to maintain a toll-free telephone number for consumers seeking to obtain information on credit counseling agencies Creditors would be permitted to use information obtained from the website of the U.S Trustees Office or a relevant bankruptcy administrator. “We believe the preferable approach for both consumers and creditors will be to allow creditors to disclose this website address on the periodic statement, in lieu of the toll-free telephone number,” the CUNA letter recommended. Use the resource link below to read more CUNA comments on the Reg Z plan.
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