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MADISON, Wis. – Starting in 2006, credit cardholders across the country faced an increase in the minimum payments that they had to make to their credit card accounts per billing cycle – unless they held a card issued by a credit union. Even though credit union and bank minimum card payments have historically been considered similar, banks have widely increased the minimum payments their cardholders must make each month in response to regulator guidance that they do so. However, NCUA is under no obligation to offer similar guidance to credit unions and has said it has no plans to offer any, according to Mike McLain, senior compliance counsel for CUNA. That means that effectively there is a gap between the payments banks are required to ask of their cardholders and those credit unions may ask. It’s unclear, however, whether this gap is a benefit to credit unions. On the one hand the higher minimum payments have been cited as a possible cause of additional bankruptcy filings by financially stretched cardholders. Presumably CUs would not face those higher risks. On the other hand, consumer activist concerns led to the payments increase guidance and now it may appear that CUs are out of step on the strategy, McLain noted.

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