Senate fixes 21-day CARD Act problem

WASHINGTON (10/30/09)—Just two weeks after House members approved H.R. 3606, the CARD Act Technical Corrections Act, by voice vote, their colleagues in the Senate voted by unanimous consent to ratify the bill. Next stop for the measure: The president's desk to be signed into law.

Credit Union National Association President/CEO Dan Mica hailed the House and Senate actions calling the votes "a crucial accomplishment." The correction to section 601 of the original Credit Card Accountability, Responsibility and Disclosure (CARD) Act declares that a 21-day late-notice rule would apply only to credit cards -- and not open-end credit in general.

"Our thanks to the Senate today, and particularly to Majority Leader Harry Reid (D-Nev.), for quickly bringing this vital measure to the floor for action. Credit unions have been absolutely reeling from the unintended consequences of this section of the Credit CARD Act," Mica said after the Senate vote Thursday.

CUNA has worked closely with lawmakers and their staff, Mica noted, warning that the CARD Act, as originally written, was problematic. It would prevent credit unions from granting biweekly payment plans to their members, from sending members consolidated billing statements, and would force them to change payment due dates for members that had previously chosen due dates based on their specific financial circumstance. The situation was particularly knotty for Home Equity Lines of Credit (HELOC) because the due date of a HELOC is often a contractual term.

"Once this measure is signed into law credit unions may continue the practices of sending members consolidated billing statements, changing payment due dates for members who had previously chosen a due date based on their specific financial situation, and continuing bi-weekly payment plans -- all essential tools consumers use to manage their finances in the ways that best suit their needs," Mica noted.

The CUNA leader also commended Rep. Peter Welch (D-Vt.) for bringing the original measure to the House floor and thanked state leagues for their support with many key Senate and House leaders.