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Compliance New Fed rules affect CU e-disclosures
WASHINGTON (11/19/07)—Federal Reserve System staffers may have felt recently as though they were sitting in a big bowl of alphabet soup as they worked on amendments to the Fed’s Regulations B, E, M, Z, and DD. All their work resulted in the Fed’s recent adoption of clarifications to requirements for providing consumer disclosures in electronic form. Now the soup bowl gets passed to financial institutions and the compliance folks at the Credit Union National Association (CUNA) want credit unions to consider: How will these changes affect the way credit unions deliver electronic disclosures? “In a nutshell,” Writes CUNA’s Valerie Moss in the November Compliance Challenge, “the regulations allow credit unions flexibility in delivering disclosures electronically, and eliminate any confusion about the status of the Fed’s regulations concerning electronic communication.” In 2001, the Fed published interim final rules to establish uniform standards for the electronic delivery of consumer disclosures required under Regulations B (Equal Credit Opportunity), E (Electronic Fund Transfers), M (Consumer Leasing), Z (Truth in Lending) and DD (Truth in Savings). The interim rules addressed the timing and delivery of electronic disclosures, consistent with the requirements of the Electronic Signatures in Global and National Commerce Act (ESIGN). The Fed has now withdrawn these provisions and simplified the regulations with regard to electronic communication. The mandatory compliance date is Oct. 1, 2008. The new rules eliminate certain portions of the 2001 interim final rules that restate or cross-reference provisions of ESIGN, things such as the consumer consent provisions. The regulations now simply state that the required consumer disclosures may be provided in electronic form, subject to ESIGN. They also adopt guidance on the use of electronic disclosures. The rules vary slightly because they each address different disclosure requirements , so CUNA’s Moss urges credit unions to take a look at each one. To find out what else is new in the Fed rules, used the resource link below and take the CUNA Compliance Challenge.
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