ALEXANDRIA – The NCUA Board is scheduled to issue final rules to allow CUSOs to undertake additional activities and changes in credit card practices at its meeting next Thursday.
The original draft proposal would add two new permissible CUSO activity categories–credit card loan origination and payroll processing services–and broaden the reach of two service categories to include those eligible for credit union membership, and add new examples of permissible CUSO activities.
Through a companion amendment to Part 741, the proposal would also expand the scope of the CUSO rule by extending certain provisions to federally insured, state-chartered credit unions to ensure that regulators have access to books and records and that CUSOs operate as separate entities. Additionally, the proposal clarifies that CUSOs may buy and sell participations in loans they are currently authorized to originate, according to NCUA.
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The board is also issuing final rules aimed at stopping unfair and deceptive credit card practices. The draft of the regulations, issued by NCUA, the Federal Reserve and the Office of Thrift Supervision, would ban practices such as charging interest on repaid debt and not providing adequate notice on when payments are due. Also, debit card issuers would be barred from imposing an overdraft charge if the overdraft is caused solely by a hold placed on funds exceeding the purchase amount. Similarly, credit card holders wouldn't be charged for exceeding their credit limit if this only occurs because a hold was placed on their account.
CUNA and NAFCU expressed concern that some of the rules would increase the regulatory burden on their members and would make it harder for credit unions to manage the risks involved in providing credit.
The board is also scheduled to hear a status report on the health of the National Credit Union Share Insurance Fund.
The meeting, the agency's last scheduled one for this year, begins at 10:00 a.m. at its headquarters here.
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