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CU System
Rule change means more risk CUNA tells IUSA TODAYI
MADISON, Wis. (7/25/11)--A provision of the Dodd-Frank financial reform law that took effect Thursday will double the amount of money financial institutions make available to customers after they deposit a check. That could create more risk for financial institutions, including credit unions, the Credit Union National Association (CUNA) said in USA TODAY Thursday. “The provision requires banks and credit unions to make a minimum of $200 available to depositors in one business day, up from the current minimum of $100,” wrote USA TODAY financial columnist Sandra Block in an article titled, “Credit score is free if you’re rejected for a loan.” Exceptions to the provision are made if financial institutions can hold on to funds for a longer time period if the check is in excess of $5,000 or if the customer has repeatedly overdrawn the account, the newspaper said. Most banks already exceed the new requirement, Nessa Feddis, senior counsel for the American Bankers Association, told the paper. “I don’t think many consumers are going to notice [the change],” she added. However, some financial institutions are worried that the rule change will make it harder for them to spot fraudulent checks, Block wrote. “There’s going to be more of a risk exposure to financial institutions in general as a result of this [rule change],” Mary Dunn, CUNA deputy general counsel, told the paper. To read the article, use the link.
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