The ink is barely dry on the credit card rules' overhaul andCUNA and NAFCU are asking lawmakers and the Federal Reserve toclarify or change provisions.
The focus of concern is the requirement that credit unions mailstatements for credit cards and open-end loan products 21 daysbefore payment is due. The trade associations say includingopen-ended loan products-such as lines of credit associated withchecking accounts and home equity lines of credit-would createexpensive compliance costs for credit unions. The provision willtake effect Aug. 20.
“Many credit unions let members choose monthly due dates…and alsoto provide them with consolidated monthly statements that oftencombine their account activity with their loan activity,” NAFCUDirector of Compliance Anthony Demagone said in an interview. “Butif they have to give 21 days notice they would be sending outstatements all the time and this would make it prohibitivelyexpensive to comply.”
He said this could cost some credit unions about $100,000 betweencompliance and lost fees.
CUNA compliance experts wrote in a memo to credit unions that thesafest way to comply with the credit card provisions is to pushback the payment due date beyond the 21-day mailing period.
But on the open-end loan products, they wrote, adjusting due dates“cannot simply be done across the board” without creating extensiveproblems. CUNA said the biggest problem will be with home equitylines of credit, because existing regulations make it hard toadjust a payment due date once a contract has been signed.
Both trades have sent letters to Congress and plan to write theFederal Reserve.
The Credit Card Accountability, Responsibility, and Disclosure Actof 2009 was signed into law in May, with certain provisions takingeffect in August.
The new law requires card issuers to reassess customers' interestrates every six months if the issuer raises the rate, and bansraising rates unless a consumer is more than 60 days late on apayment, interest rate hikes on existing balances, and double-cyclebilling.
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