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Fryzel to Fed Consider CU CARD Act compliance challenges
ALEXANDRIA, Va. (8/7/09)—Underscoring the Federal Reserve Board’s own words about a “short” reprieve from an August 20 compliance date for the 21-day Credit CARD Act notice requirement, Michael Fryzel this week reiterated credit union concerns regarding the tight compliance timeframe they face. Fryzel, chairman of the National Credit Union Administration (NCUA), wrote to Fed Chairman Ben Bernanke asking the Fed leader to “give every consideration to the significant costs and operational difficulty many credit unions will experience as they work to come into compliance” with the Fed’s recent interim final rule. At issue is a section of the interim rule that prohibits creditors from claiming a payments is late unless that creditor adopts reasonable procedures to ensure that periodic statements are delivered to consumers no later than 21 days before the payment due date. Fryzel expressed confidence with credit union preparations for the rule, but said gearing up for the new disclosures “is expected to be costly, and full compliance may take some months.” “I am sure you appreciate that, as a result of this rule, creditors are now vying with one another to tap the available vendors and resources to make these changes to meet the requirements of the interim final rule. “As a result, the credit union industry, for which any additional regulatory costs are particularly burdensome, may experience difficulty in achieving full compliance, particularly in these uncertain economic times,” Fryzel noted to the Fed chairman. In its interim rule, the Fed indicated that "for a short period of time after August 20," periodic statements for open-end credit other than credit cards may disclose due dates that are inconsistent with the 21-day requirement under certain circumstances. However, the Fed to date has declined to be any more precise about how long a short period of time may extend. The Credit Union National Association (CUNA) has been seeking to address the compliance problem through both statutory and regulatory avenues. CUNA has requested that Congress address the problem by stating that the provision was never intended to go beyond application to credit cards. Without that fix, CUNA has also been working with regulators to seek a later compliance deadline. However, CUNA, noting the realities that credit unions face with the pressing deadline, also this week issued copious guidance to support credit union compliance with the new rules. (See related story: CUNA doc helps CUs cope with CARD Act regs)


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