Trades Seeking Legislative Fix on CARD Act
At issue, is a provision of the Credit Accountability Responsibility and Disclosure Act, which took effect on Aug. 21, that requires statements on open-end accounts be delivered 21 days before they are due. Some credit unions have said they are facing logistical and other obstacles that are making compliance difficult.
Lobbyists for both groups said they are focusing on the Senate, which is likely to consider legislation they can attach the change to. One possibility is the various spending bills which fund the government's operations.
While lawmakers and aides didn't intend to include the provision on open-end credit in the legislation, it may not be simple to remove, said NAFCU Director of Legislative Affairs Brad Thaler.
"No one has publicly stated their opposition, but there may be some concern that if you reopen the bill on one issue, others will come up and you would have to deal with a lot of issues fairly soon after it was enacted," he said.
CUNA Vice President for Legislative Affairs Ryan Donovan said they are exploring all angles for obtaining a legislative fix and while they have a good case to make, "there are still hurdles to be jumped."
Both Thaler and Donovan said that their members are using the recess to raise the issue with members of Congress and they hope that will increase the likelihood of congressional action when lawmakers return.
The trades tried without success to get the Federal Reserve to make the change by regulation but that agency said any change must be done by Congress. Former NCUA Chairman Michael E. Fryzel requested that the Fed take action as did Senate Banking Committee Chairman Christopher Dodd (D-Conn.).
While the Fed didn't change the rule, it did suggest a temporary fix that allowed credit unions to put a notice in their statements telling members that if they mail a payment within 21 days the credit union won't charge a late fee.
NAFCU Director of Compliance Anthony Demangone said they have received as many inquiries on this issue as on any other during his five years at the association because "it raises lots of questions, but there are very few answers."
He said to comply with the law as it is written requires credit unions to move all due dates on loans to later in the month because of the 21-day notice or send out separate periodic statements for every credit card account or line of credit. Those options require costly adjustments, especially because credit unions had only 90 days from the day the law took effect to comply.