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CARD Act Changes Threaten To Divert Resources From Member Service: CUNA
WASHINGTON (2/21/13)--When it revisits some provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Consumer Financial Protection Bureau must recognize that certain CARD Act requirements "have the potential to divert credit unions' resources and attention away from their primary mission, which is to meet their members' financial needs," the Credit Union National Association said in a comment letter.

In the letter, CUNA Senior Assistant General Counsel for Regulatory Advocacy Luke Martone noted CUNA's longstanding support of the CARD Act's objective, which is to eliminate predatory credit card practices. "However, credit unions remain concerned that regulatory requirements not become any more cumbersome for credit cards than they are now," he wrote.

The letter noted that CARD Act implementation has changed many of the substantive terms and conditions of credit card agreements, and has resulted in numerous direct changes to card issuers' practices.

The credit card application review process has become lengthier, and the forms themselves have become more complex, the letter adds. Credit limits have also been lowered for some borrowers as an indirect result of the Act.

Many creditors have also increased their underwriting as a result of the CARD Act, the letter noted.

Overall, the increased cost of compliance associated with these and other CARD Act changes has made it more expensive for credit unions and other issuers to operate card programs. "While the Act was implemented to better manage and enforce industry practices related to certain high-risk borrowers, higher credit costs for all borrowers and credit card issuers has resulted," the letter said.

If and when the CFPB turns its attention to its rules implemented under the CARD Act, CUNA encourages the agency to provide meaningful regulatory relief from various provisions of the Act.

For the full CUNA comment letter, use the resource link.
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