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CUNA urges more changes to CARD Act rule
WASHINGTON (9/22/09)—Minimum payment disclosure requirements that will be effective Feb. 22, 2010 under the new law known as the Credit CARD Act should apply only to credit cards, the Credit Union National Association (CUNA) urged the Federal Reserve Board, the agency charged with implementing the law. CUNA also emphasized that credit unions continue to experience severe difficulties as they struggle to comply with the 21-day rule, which requires creditors to adopt reasonable policies and procedures to ensure periodic statements for open-end accounts are mailed or delivered to borrowers at least 21 days before the payment is due. Otherwise, if the payment is made after that time frame, the creditor may not treat it as late for any purpose, including charging a late fee, reporting the account as delinquent to credit bureaus, or imposing a penalty interest rate. CUNA is seeking a targeted legislative remedy, and urges the Fed to support its efforts. CUNA has also worked extensively with Fed officials regarding the problems credit unions have confronted as they work to comply with the 21-day rule. In its eighth comment letter to the Fed on CARD Act issues this summer, this one dated Sept. 21, CUNA said that if the minimum payment disclosures are not limited to credit cards, credit unions will incur significant costs to provide information to their members that will be confusing and may lead some borrowers to make incorrect payments. CUNA added that limiting minimum payment disclosures to credit cards is wholly consistent with previous action by the Fed. The agency recognized similar problems, CUNA noted, when it issued rules earlier to implement similar minimum payment disclosure requirements under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. “The Board limited those statutory provisions regarding minimum payment disclosures to credit cards, and we urge the Board to do so again,” CUNA’s Deputy General Counsel Mary Dunn wrote. CUNA noted that the minimum payment disclosure issue is not part of the interim final rule that was open for comment, but that CUNA was compelled to address this issue now because of the problems that could arise if starting minimum payment disclosures have to be reflected for all open-end loan accounts on consolidated statements, which a number of credit unions provide to their members for all their accounts. CUNA also commented on the interim rule’s specific provisions. Use the resource link below to read CUNA’s complete remarks.
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