ALEXANDRIA, Va. (4/22/09)—The National Credit Union Administration (NCUA) proposed clarification of its unfair and deceptive acts or practices (UDAP) rule and approved some staffing changes at the Central Liquidity Facility (CLF), among other actions, at its open meeting Tuesday. The clarification involves a rule issued jointly in December by the
NCUA Chairman Michael Fryzel prepares to open Tuesday’s public meeting at which the three-member board considered five items including clarifications to an unfair and deceptive practice rule that goes into effect July 1. Seated behind the chairman is NCUA Deputy Executive Director Larry Fazio. (CUNA photo)
NCUA, Office of Thrift Supervision and the Federal Reserve Board and will take the form of additional official staff commentary. The agencies intend the further guidance to facilitate compliance with the final UDAP rule. If adopted, it would specifically amend portions of the regulation that address deferred/waived interest credit card programs and the Servicemembers Civil Relief Act (SCRA). The effective date of the rule is July 1, and the NCUA requested comment on the clarification proposal within 30 days of the date the plan is published in the Federal Register
, which is likely to occur within two weeks. Specifically, the proposals would clarify that:
* Key protections in the final rules continue to apply to balances on a consumer credit card account when the account is closed or acquired by a different institution, or when the balances are transferred to another account issued by the same institution; * Institutions are banned from increasing the rate on a credit card balance because the account has been closed; and * Institutions and retailers may continue to offer deferred interest and similar programs, but the programs are subject to all protections in the final rules.
Regarding its staffing decision for the CLF, the NCUA agreed to upgrade two existing jobs and add two new positions to the CLF force. CLF President Owen Cole requested and was granted a ranking upgrade for the position of division director of the office of capital markets and planning. Also upgraded was the current position of National Capital Markets Specialist, which will now be National/Senior Capital Specialist. The new positions are a senior level position with a special focus on CLF lending, and a technician’s position. Cole said the cost to the CLF, which is a self-funded entity, will be $178,000 and the cost to the NCUA would be $119,000.