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CUNA pursues CARD Act compliance solutions
WASHINGTON (7/30/09)—The Credit Union National Association (CUNA) continues its efforts to address what is for credit unions a troublingly short compliance framework for new Federal Reserve Board rules implementing the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. CUNA is pursuing both regulatory and legislative fixes to the compliance date problem. Illustrating the level of concern, approximately 2,500 credit union representatives tuned in this week for CUNA’s audio conference, "Requirements of the New Credit CARD Act," which featured a Fed senior attorney and other experts to explore compliance issues. The CARD Act aims to prevent lenders from making arbitrary changes to interest rates and terms associated with credit cards that have an existing balance. However, CUNA has been working with the Fed to convey credit union concerns regarding a specific requirement in Section 106. That section prohibits creditors from claiming a payment is late unless that creditor adopts reasonable procedures to ensure that periodic statements are delivered to consumers no later than 21 days before the payment due date. The section, says CUNA, is very problematic both because it is one of the very few provisions that apply to all open-end credit, not just credit cards, and because of the upcoming Aug. 20 effective date. CUNA Senior Assistant General Counsel Jeff Bloch said audio conference discussion focused exclusively on the huge compliance problems associated with the 21-day disclosure requirement. “One suggestion for compliance that was discussed, and seemed the most viable, was an idea of putting due dates on the statements for both the current month and the next month to ensure that members receive the 21-day notice for all payments, without requiring the dismantling of consolidated statements or altering due dates, many of which are chosen by the members themselves,” Bloch said “Unfortunately, the Fed attorney said that approach would violate the ‘spirit’ of the rule,” Bloch said, but assured that CUNA will continue to pursue the "multiple due dates" approach with the Fed because it seems to be “the most viable, and maybe the only realistic, means in which to comply with these provisions.” There is an archived version of the CUNA audio call available through the website. Use the resource link below to access registration.
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