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CARD Act corrections pass House via voice vote
WASHINGTON (10/14/09)--The House of Representatives on Tuesday approved by a voice vote H.R. 3606, the CARD Act Technical Corrections Act, which was introduced by Rep. Peter Welch (D-Vt.) last month. In a statement following the vote, Credit Union National Association (CUNA) President/CEO Dan Mica commended the legislators for their “vital action” that could "save credit unions and their consumer members both money and peace of mind.” However, Mica added that “Senate action is still urgently needed for consumers and credit unions to realize relief,” and he encouraged Senators “to take similar action as soon as possible.” While the House vote is a positive move, CUNA’s Senior Vice President for Compliance Kathy Thompson encouraged credit unions to continue with their compliance efforts on the 21-day requirement, emphasizing that there is no bill comparable to H.R. 3606 in the Senate at this point. In a letter sent earlier in the day, Mica urged members of Congress to approve H.R. 3606, which would clarify that the 21 day notification requirements of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act apply only to credit card accounts. Mica in the letter reiterated an earlier statement that credit unions are "currently reeling from an unintended consequence of the CARD Act." The legislation, if signed into law, would insert language specifying that Section 106 of the CARD Act, which prevents 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, only applies to credit card account holders. This section currently 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. Mica said that the CARD Act, as currently written, would prevent credit unions from granting biweekly payment plans to their members, from “sending members consolidated billing statements,” and would force them to change payment due dates for members that had previously chosen due dates based on their “specific financial situation.” Mica said that this is “particularly problematic” for Home Equity Lines of Credit (HELOC) “because the due date of a HELOC is often a contractual term.” CUNA believes the provision was originally intended to cover only credit card accounts and was inadvertently changed during the legislative process, and Mica detailed some of the increased costs and reduced services that credit union members may face if the technical corrections to the Credit Card Accountability, Responsibility and Disclosure (CARD) Act were not made in a letter sent late last week. Following yesterday's vote Mica also acknowledged the work of the Association of Vermont Credit Unions. Prior to the bill’s introduction last month, the Vermont league worked closely with with Welch and his staff to discuss the dilemma credit unions face if the 21-day disclosure rule were to apply to all open-end credit.
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