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CUNA urges CFPB to help stop ATM lawsuits

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WASHINGTON (12/22/11)--The Credit Union National Association (CUNA) has urged the Consumer Financial Protection Bureau (CFPB) to suspend a duplicative automated teller machine (ATM) notice requirement in an effort to help stop lawsuits being brought against credit unions and other financial institutions when the notices have been removed, damaged or destroyed.
 
The Electronic Fund Transfer Act requires credit unions and other financial institutions to disclose that ATM fees will or may be charged on the outside surface of the ATM.  More detailed ATM fee information must also be provided before the transaction is completed by either projecting it on the ATM's screen or providing the ATM user with a small printed disclosure.
 
Credit unions and others have found that the outside notices on ATMs are, in some cases, being intentionally removed or destroyed , without the financial institution's knowledge, and that pictures are then taken of the ATM to show noncompliance. Some ATM users are then using this evidence of apparent non-compliance as grounds for lawsuits.
 
"Consumers do not benefit from the redundant notices, yet credit unions are being sued because the notices have been removed," CUNA President/CEO Bill Cheney said in a letter to Acting CFPB Director Raj Date.
 
"If the litigants were concerned about compliance, they should first bring the issue to the institution's attention to correct it or to the attention of the regulator. That is not happening and ATM "chasers" are going straight to court," Cheney added. Cheney urged Date to perform a quick review of this regulatory situation and "suspend the duplicative ATM notice requirement."
 
If a quick suspension of the rule is not possible, the CFPB, "at the very least," should announce it will work with CUNA, credit unions, consumer groups, and others "to seek legislation immediately that will put an end to these suits."
 
CUNA has also advised credit unions on how to mitigate the risk of ATM fee lawsuits.
 
In a release sent to credit union league presidents, CUNA said credit unions should develop and maintain written procedures for inspecting all of their ATMs on a regular basis to ensure the ATM fee signs are intact.  ATMs should be inspected at least weekly or when the ATM is serviced--whichever provides for more frequent inspections. Credit unions could photograph the ATM each time it is inspected and log the inspections, CUNA added.
 
Any missing signage should be replaced immediately, and credit unions can ensure that this can be done in a quick fashion by maintaining a supply of signs and stickers to replace any that have been defaced or removed from ATMs, CUNA said.
 
The ATM screen and paper disclosures should also be tested, CUNA added.

CFPB takes on Reg DD four other new rules

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WASHINGTON (12/22/11)--The Consumer Financial Protection Bureau (CFPB) is accepting comments on the rules it has inherited from other agencies under the Dodd-Frank Act and has been publishing them in the Federal Register, including Truth in Savings (regulation DD) and Fair Credit Reporting (Regulation V).

The other rules that are newly under CFPB oversight are:

  • Privacy of Consumer Financial Information (Regulation P);
  • Equal Credit Opportunity (Regulation B); and
  • Interstate Land Sales Registration Program (Regulations J, K, and L).
The CFPB in the Federal Register said it is republishing the regulations "with technical and conforming changes to reflect the transfer of authority and certain other changes made by the Dodd-Frank Act." However, the legal intent of the regulations is not being changed at this time, the CFPB said.

The Credit Union National Association (CUNA) will be using this opportunity to determine what changes could be suggested to help alleviate credit unions' regulatory burdens while still upholding statutory requirements. CUNA plans to review each one of the inherited rules in detail, many of them with one or more of CUNA's Governmental Affairs Committee's Subcommittees, credit union leagues, CUNA's Councils, and other groups. 

The CFPB is accepting comment on these rules until Feb. 21 and an interim final rules will become effective on Dec. 30, 2012.

Under the Dodd-Frank Act, rule-writing authority for more than 12 consumer protection laws was transferred from the National Credit Union Administration, the Federal Reserve, the Department of Housing and Urban Development, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the Office of Comptroller of the Currency and the Office of Thrift Supervision.

The CFPB this month announced it would accept public input on how to best streamline rules that it will soon inherit from seven federal agencies "to make it easier for banks, credit unions and others to follow the rules" and ensure that regulations work better for consumers and the firms that serve them.

CUNA is also asking for credit union comment on this issue.

For the CFPB releases on these rules, and CUNA's comment call, use the resource links.

Retirement from GECU by CUNA Chairman May announced

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WASHINGTON (12/22/11)--Harriet May--whose retirement as president/CEO of El Paso, Texas-based GECU was announced by the credit union on Wednesday--will continue as Credit Union National Association (CUNA) chairman through the end of her current term.

Click to view larger imageCUNA Chairman Harriet May, seen here speaking at the 2011 Governmental Affairs Conference, has retired as CEO of GECU. (CUNA photo)
May's term as CUNA chairman will end once CUNA's annual general meeting, and the 2012 Governmental Affairs Conference (GAC), conclude on March 22. She will continue to work with the CUNA board as immediate past chairman of the association following the GAC, as has been the practice with other immediate-past chairmen.

CUNA President/CEO Bill Cheney praised May's service as a credit union leader following the retirement announcement.

"For four decades, Harriet May has served the credit union movement with complete commitment to its values and utter dedication to service to the members of credit unions. She has been a champion of the principles that are the bedrock of the credit union industry and--through her service with the Texas Credit Union League and CUNA--a tireless advocate for more flexibility for credit unions to better serve their members," Cheney  said.

Greg Watters, chairman of the GECU board, said the credit union's members and the surrounding community have benefitted from May's "leadership, vision and experience."

Crystal Long has been named GECU's new president/CEO; she previously served as executive vice president and chief operations officer.

May will serve as senior advisor to GECU until her retirement becomes effective March 31. The credit union, in a press release, said she will be named president emerita at GECU's annual meeting scheduled in the first quarter of 2012 in honor of her 38-year distinguished career with the credit union, and legacy to the movement.