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WASHINGTON-The federal financial regulators and the Federal Trade Commission wrote a letter Nov. 24 informing banking and credit union trade associations that, while some provisions of the Fair and Accurate Credit Transactions Act depend upon implementing regulations, others are written into law and cannot avoid the Dec. 1 compliance date. CUNA, NAFCU, the American Bankers Association, America’s Community Bankers, Consumer Bankers Association, Financial Services Roundtable, Independent Community Bankers of America, and the Mortgage Bankers Association wrote the regulators Nov. 2 asking for a delay in the effective dates of some of the provisions of the law. The regulators, including NCUA General Counsel Bob Fenner, pointed out that four of the provisions are included in the law and do not require regulatory action and therefore were effective Dec. 1. These include: *Fraud and active duty alerts; *Blocking of information resulting from identity theft; *Prevention of re-pollution of consumer reports; and *Disclosure of credit scores. “The requirements of these provisions are effective on December 1, 2004, and do not depend on agency rulemaking,” the regulators explained. “As a result the agencies expect that covered persons will begin to comply with these provisions on that date. “The agencies appreciate the difficulties associated with developing compliance procedures, modifying systems, and training staff to implement new requirements. Consequently the agencies will take into account these difficulties together with all other relevant circumstances, including the good faith efforts made by each institution to comply with these provisions when considering whether to bring enforcement actions under the FACT Act.” Other provisions do require rulemaking and will not be effective until a compliance date is settled upon in the regulations, the regulators’ letter stated. “As these statutory provisions are written, the obligations of various persons flow from the guidelines and rules that are to be adopted by the designated agencies,” they wrote. “Thus, compliance with any applicable guidance or rules cannot be determined until they are finally adopted by the agencies. The effective date will be set forth in the guidance or rule.” Specifically, the letter noted, Section 311 of the FACT Act, governing risk-based pricing notices, was supposed to become effective Dec. 1. However, the regulators provide, “The provisions of section 311 are, by their terms, enforceable only by the federal agencies designated in section 621 of the Fair Credit Reporting Act. Joint rulemaking by the FTC and the board will establish the parameters for compliance, including the requirements for consumer notice, and will state the date for compliance.” Other FACT Act provisions awaiting regulation include: * Red flag guidelines and regulations; * Disposal of consumer report information; * Accuracy and integrity guidelines and regulations; * Ability of consumer to dispute information with furnisher; and * Reconciling addresses. NCUA and the FTC have already issued final regulations covering the disposal of consumer report information. NCUA’s rule-covering federal credit unions-is due to become effective July 1, 2005. State chartered credit unions must follow the FTC’s substantially similar rule that takes effect June 1, 2005. The Federal Deposit Insurance Corporation’s rule was on the agenda for its Dec. 7 meeting. “We are pleased that the regulators did come out with a letter,” NAFCU Associate Director of Regulatory Affairs Carrie Hunt said. “Of course, it’s not as formal as a rule would be.” While NAFCU is pleased overall with the response, NAFCU would have liked to see a rulemaking officially delaying the non-statutory compliance dates, she explained, adding that it does appear the agencies will be changing the dates on an individual basis. Hunt said NAFCU and the other trades had heard numerous concerns from their members about the Dec. 1 deadlines, particularly without regulations having been written. CUNA Vice President of Communications and Media Outreach Pat Keefe said, “We are pleased that the regulatory agencies have responded to our request, in particular their formal acknowledgment (by their letter) that compliance with any applicable guidance or rules cannot be determined until they are finally adopted by the agencies. We look forward to working in the future with NCUA and the other agencies as this regulatory process continues.” -

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