CUs get the green light from NCUA for electronic statement delivery

WASHINGTON - Credit unions and credit union vendors are gearing up to offer members e-statements after NCUA amended its Truth and Savings regs permitting CUs to e-deliver monthly statements. NCUA is following the lead of the Federal Reserve's amendment to Rule DD which allows financials to deliver periodic statement disclosures in electronic form if the consumer agrees to that form of delivery. There is still some confusion as to how a credit union gets a member's consent to deliver statements electronically. Does the credit union need to mail a printed disclosure form for the member to sign and return, or can the CU deliver the disclosure notice electronically? "Under the Truth and Savings Act NCUA is required to promulgate the same rules that the Federal Reserve promulgates within a certain time period of when the Fed's rules are effective. Since we are statutorily required, we basically take the Fed's rules and make them our own taking in account the unique nature of credit unions and then altering the rule to make them applicable to credit unions," said Frank Kressman, an NCUA staff attorney who worked on the rule. Kressman said there wasn't really any specific credit union uniqueness to cause NCUA to stray from the Fed's rule in this case. "The Fed was purposefully flexible in determining how this agreement has to come about. All the Fed really said was that prior to a credit union being able to send the periodic statement disclosures to members the member and the credit union have to agree that that's how it's going to be done. The credit union can't all by itself decide that they're going to start sending members electronic statements without their consent," said Kressman. But how that member/CU agreement comes about isn't in the new rule. "What the Fed said was that they had no intention of defining what that agreement is and how it is struck. The Fed said the state law will control, from a legal point of view, if the bank and the customer have an agreement," said Kressman. He said NCUA isn't going to define what an agreement is either-for the CU's own benefit. "It provides flexibility. We don't want to hamstring any credit union or their members into following an NCUA format. In this rule it's up to the CU and their members to come up with the agreement, and ultimately it will be up to the state law to come up with the agreement. If a particular state says the only way an agreement can be made is if it's in writing with these ten things, then that's how the agreement must be," said Kressman. -pgentile@cutimes.com