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CUNA to CUs Compliance efforts should focus on new card rules
WASHINGTON (6/1/09)—Recently enacted credit card laws overlap with the Federal Reserve’s Regulation Z rules and the National Credit Union Administration’s (NCUA) unfair and deceptive acts or practices rules (UDAP) that were issued last year. The Credit Union National Association (CUNA) recommends that credit unions focus on the new law with regard to their efforts to be in compliance with Reg. Z amendments and UDAP requirements. Portions of the credit card law, which was signed by President Barack Obama in May, contain requirements that are similar to those set forth by Regulation Z. Reg Z provides guidelines for the disclosure of the terms and cost of many types of consumer loans, and UDAP, which seeks to govern certain credit card and loan business practices. However, the new law will also push many effective dates forward, with some provisions entering into force in 9 months and others becoming effective within 90 days. Also, the requirements under the new law will be implemented under the Truth in Lending Act, and not under the UDAP statute. "Credit unions should focus now on complying with the new credit card law and follow these provisions to the extent that they differ from the rules that were issued last year, while also keeping in mind the new effective dates," CUNA Senior Assistant General Counsel Jeffrey Bloch has advised. He has noted that the Fed is expected to review and make changes to their new rules as part of the normal rulemaking process. However, specific guidance is not expected before that time. The Fed, the NCUA, and the Office of the Comptroller of the Currency are holding ongoing discussions on the status of the recent UDAP rules, which may include withdrawing the UDAP rules. The UDAP rules, if they remain in place, would have to be reworked to ensure consistency with the new laws. The agencies could work together or work separately to discuss any conflicts within the rules. The Fed has said that they are receptive to any questions or comments that may arise and they will work with CUNA to resolve possible compliance issues for credit unions. CUNA will hold an audio conference call on these issues on June 18. CUNA is also working on resource materials comparing elements of Reg. Z and UDAP to the new credit card laws, and will present them shortly.
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