Comments for That Credit Union Blog

Comment on Frivolous Friday: Ugottaloan! by Current Issues in Credit Unions #42. « That Credit Union Blog

Current Issues in Credit Unions #42. « That Credit Union Blog — Wed, 28 Oct 2009 11:57:33 +0000

[...] CARD Act update. –HOEPA update. –Regulation GG. –Pandemic preparation. –Ugottaloan –Big K Roundup (To Tweet or Not to Tweet; New Developments on Consumer Protection Agency; The [...]

Comment on Timely Collections and Form 1099-C by Becky Howell, CEO

Becky Howell, CEO — Tue, 27 Oct 2009 19:41:14 +0000

I am confused on the bankruptcy issue. It appears to me we don’t file a 1099 C on a member who goes bankrupt unless it is a business expense or loan. Is this correct.

Comment on The Business Judgment Rule: Hardcore Protection for Officers and Directors. by euandus

euandus — Sat, 24 Oct 2009 18:35:17 +0000

I think the business judgment rule has thwarted or diminished property rights, essentially saying that business expertise trumps the rights that owners have over their property. I’ve just posted on this…relating it to the public interest.

Comment on Debtors Not Allowed to Retain If Current by denver credit

denver credit — Fri, 09 Oct 2009 01:26:54 +0000

Wow great post and thanks for the info on the “retain and pay” I never knew that. I will be checking in with my friend down at my local Denver Credit Union
for some more information.

Thanks again,
Youth banker

Comment on eBay Sales of Repossessed Cars by Hunter

Hunter — Sun, 20 Sep 2009 00:53:10 +0000

The problem that remains is what type of notice the member should receive. Some scholars suggest giving a general notice and not identifying whether the sale is private or public, but merely that the sale will occur on eBay and providing the length of time of the sale and the web address.

This is a great resource thanks. It has given me much to consider with advertising and sales of repo cars.

Comment on Current Issues in Credit Unions #40. by Rob Rutkowski

Rob Rutkowski — Wed, 02 Sep 2009 12:56:48 +0000

Excellent discussion indeed Steve! Thanks. And again, I cannot say enough good things about the NAFCU Compliance Blog. The stuff NAFCU put out on the Credit CARD Act when the panic set in was like a lighthouse in a storm.

Comment on Current Issues in Credit Unions #40. by Steve Van Beek

Steve Van Beek — Tue, 01 Sep 2009 16:54:25 +0000

I took a look at the official staff commentary to Section 226.5(b)(2)(ii) and the 14-day rule would apply to all open-end loans if there was a late payment fee assessed. It appears the key words here are “or other charge.” Here is the staff commentary: “Paragraph 5(b)(2)(ii).
1. 14–day rule. The 14–day rule for mailing or delivering periodic statements does not apply if charges (for example, transaction or activity charges) are imposed regardless of the timing of a periodic statement. The 14–day rule does apply, for example:
• If current debits retroactively become subject to finance charges when the balance is not paid in full by a specified date.
• If charges other than finance charges will accrue when the consumer does not make timely payments (for example, late payment charges or charges for exceeding a credit limit).”

The Fed discusses this in its Interim Final Rule as well (and does so in a way that is pretty damning to my argument above): “The current version of Regulation Z, however, applies the 14-day requirement even when the consumer does not receive a grace period. Specifically, current § 226.5(b)(2)(ii) requires that creditors mail or deliver periodic statements 14 days before the date by which payment is due for purposes of avoiding not only finance charges as a result of the loss of a grace period but also any charges other than finance charges (such as late fees). See also comment 5(b)(2)(ii)–1.”

I know some credit unions offer a “courtesy period” of up to 15 days before a late fee would be assessed. It looks like under the old rule, this could have worked – as they may well have been mailing statements at least 14 days prior to when a late fee would be assessed. However, the new rule provides that the payment due date is the relevant date for the 21-day rule and not the end of any courtesy period – which takes away that argument for a lot of credit unions.

Very good discussion on this, I’ve enjoyed it.

Comment on Current Issues in Credit Unions #40. by Katherine Weber

Katherine Weber — Fri, 28 Aug 2009 14:43:16 +0000

My interpretation would be that the 14 day notice requirement in the old Section 226.5(b)(2)(ii) applied to all open ended loans. This section read, “The creditor shall mail or deliver the periodic statement at least 14 days prior to any date or the end of any time period required to be disclosed under Section 226.7(j) in order for the consumer to avoid an additional finance or other charge.” It allowed the creditor to include the grace period (if the loan had one) in counting the 14 days. I do not interpret it to be that there was no requirement on timing at all if there was no grace period. If we take out the reference to the grace period, it would read, “The creditor shall mail or deliver the periodic statement at least 14 days prior to any date in order for the consumer to avoid an additional finance or other charge.” The “any date” presumably being the due date. If the section were to apply only to loans with a grace period, what would the words “any date” be referring to? Also, given the nature of Req Z being a consumer protection reg, it would seem to be even more important to apply to the loans without grace periods. Just my take on it!

Comment on Current Issues in Credit Unions #40. by Steve Van Beek

Steve Van Beek — Thu, 27 Aug 2009 21:36:47 +0000

Rob, the former version of §226.5(b)(2)(i) contains the general requirement – but it is subsection (ii) which contained the timing requirement. Subsection (ii) required statements to be sent “at least 14 days prior to any date or the end of any time period required to be disclosed under § 226.7(j).” Section 226.7(j) requires the disclosure of any “free-ride period” or “grace period.”

For simple interest loans, with no grace period, it doesn’t appear the 14-day provision would have applied.

Comment on Current Issues in Credit Unions #40. by Rob Rutkowski

Rob Rutkowski — Thu, 27 Aug 2009 21:19:50 +0000

Thanks for listening, Steve! I’m not sure that I agree with you on the prior 14 day rule. Take a look at the former version of Reg Z §226.5(b)(2)(i). I don’t think that exempted accounts without grace periods from the 14 day notice. I do agree that Congress did forget to contemplate grace periods in §163 of the new TILA. This now requires creditors to adopt reasonable procedures to ensure statements are mailed or delivered at least 21 days before the payment due date and the expiration of the grace period.