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WASHINGTON-CUNA and NAFCU have asked the Federal Reserve Board to narrow its proposal under Regulation Z on disclosures for open-end credit as required under the new bankruptcy law. In its comment letter responding to the Fed’s request for public comment, CUNA suggested that the proposal could be whittled down to strictly cover credit cards. CUNA explained that “the problems and abuses that were intended to be addressed by these provisions emanated primarily from practices specific to credit cards.” NAFCU agreed in its letter, and added, “NAFCU has heard concerns from member credit unions that, with the number of consumer protection disclosures becoming increasingly copious, consumers are becoming overwhelmed. Consequently, there is a concern that consumers are not reading the disclosures that are provided to them. The benefits of the disclosures are negated if the information is not being utilized by consumers.” In brief, CUNA’s 22-page comment letter further stated that the annual percentage rates the Fed would require as hypothetical examples for periodic statements should not change over time for the sake of simplicity. Regarding the tables the Fed is supposed to provide for credit unions and other lenders to use in calculating repayment periods if only making minimum payments, CUNA said it should be similar to the hypotheticals in the periodic statements to avoid confusion. The group also suggested that the actual repayment period with minimum payments is impossible to calculate and it should be termed a “good faith” estimate. Additionally, CUNA recommended that disclosures on the true cost of making only minimum payments should be distributed to all credit card holders whether they carry a revolving balance or not, among other things. NAFCU also expressed concerns about the “significant compliance challenges” presented by the Reg Z amendments. “Indeed, establishing toll-free numbers and modifying disclosures will prove costly for financial institutions,” NAFCU’s letter read. Though the trade association noted that the Fed is required to maintain the toll-free number for two years for smaller institutions, eventually the expense will be borne by the credit unions themselves. “NAFCU believes that in implementing the amendments to TILA made by the Bankruptcy Act, the Board should be cognizant of the significant compliance burden involved,” NAFCU said.

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