Credit CARD Act: Crushing Madness.

If you are into compliance in the least bit, your life is being at least partially consumed at the moment by the Credit CARD Act and the furious efforts of the Federal Reserve Board to put out regulations that support it.  Our good friends at the NAFCU Compliance Blog have virtually dedicated every day for the last month or more to explaining what’s going on.  This is a terrific resource for compliance officers.  We’ve been covering it monthly on CIiCU as well.

The magnitude of the changes to Regulations Z cannot be understated.  Regulation Z is the big kahuna of consumer lending regulations.  The changes by Congress and the Fed and the lightening quick deadlines established are making the entire U.S. consumer lending industry frantically scramble to get into compliance. 

How can credit unions best react to this?  Push as much of it as possible to your credit card and statement vendors.  Some of it is still going to be in the credit union’s lap.  Particularly onerous are the August 20th requirements concerning the 45-day notice when you want to make an APR change (and other changes) to a credit card agreement.  Previously, you only needed 15 days notice.  Of course 45 days becomes effectively 60 days because you aren’t going to send a separate mid-month mailing to all of your members.  You’re going to want to send the notice with the normal member statements.

The other significant change is going from providing statements 14 days before a payment is due to 21 days before payments are due.  This also has an 8/20/2009 deadline. 

All of the trades are pushing out seminars and guidance on the changes:  CUNA, NAFCU and CUES.  The Leagues are doing this as well.  My advice to compliance officers is to take in as much as possible.  August 20th is less than a month away.  After that, many more changes are required by February 22, 2010.


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