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CUNA seeks limit on student loan disclosures for CUs
WASHINGTON (5/28/09)—The Credit Union National Association (CUNA) has asked the Federal Reserve to limit the scope of new disclosure requirements for private student loans under Regulation Z to those loans that only have “the common characteristics” of traditional student loans. As currently constructed, the new Regulation Z disclosures would apply to any loans for “private education” and “postsecondary educational expenses.” In a recent comment letter, CUNA Senior Assistant General Counsel Jeffrey Bloch said that these overly broad terms could lead to loans that are only “tangentially related to student lending” being covered under these regulatory requirements. As a result, “credit unions that do not view themselves as private student lenders may not be aware that they may have to comply with these new rules,” Bloch added. Restricting the purview of Regulation Z to traditional student loans would allow credit unions to continue their current lending activities while providing consumers with the same level of protections that are currently required under Regulation Z. Consumers should also be limited to a three-day cancellation period for any student loan, CUNA added. Further, CUNA said, credit unions should be given one full year to prepare for compliance with this new rule after it is issued in final form.


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