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Compliance CARD Act 21-day rule clear now
WASHINGTON (12/31/09)—In November, President Barack Obama signed the CARD Act Technical Corrections Act (H.R. 3606) into law putting to rest a situation that had been plaguing credit unions since the original Credit Card Accountability, Responsibility and Disclosure (CARD) Act was signed in May. Christy, the compliance manager at DEF FCU, read all about it in the Nov. 10 issue of News Now and now wants to act on the information. But the whole situation has been, let’s say, a bit confusing for some who must deal with the nuts and bolts of compliance. The original bill set off the confusion by incorrectly implying that a 21-day late notice requirement applied to all open-end credit, and the Credit Union National Association successfully argued that it had always been lawmakers' intent to apply the provision only to credit cards. That resulted in the CARD Fix Act, which stated unequivocally that the 21-daydisclosure timing requirement between provision of the periodic statement and the payment due date applied only to credit card accounts rather than all open-end credit. Christy also read tjat the 21-day timing continues to apply to all open-end credit. She knows that DEF FCU provides a 10-day period after an open-end loan payment due date before the credit union imposes a late fee. Christy believes the credit union must now change the timing of the late fee charge to 21 days from the date their periodic statements are mailed. Is Christy correct? CUNA’s Compliance Challenge tells Christy and other folks like her that no, this interpretation is not correct. Use the resource link below to read why in question eight, and then enjoy more CARD Act guidance in questions one through seven. http://cuna.org/compliance/member/comp_challenge/12_09_challenge.html Fed's interim final rule to amend Reg Z, implementing two provisions of the Credit Card Accountability Responsibility and Disclosure Act http://edocket.access.
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