CUNA Consumer Protections Subcommittee Gets to Work on ID Theft, Bounce Protection

WASHINGTON-CUNA Assistant General Counsel Jeff Bloch has been working with the organization’s Consumer Protection Subcommittee on top priority issues of late, including identity theft guidelines and bounce protection plans. Bloch said the subcommittee would be reviewing NCUA’s proposed identity theft guidelines and helping CUNA develop its official comment letter. He said the subcommittee members would be considering whether the guidance is flexible enough, particularly for small credit unions. “In the guidance is a lot of information about flagging accounts, monitoring accounts, etc. and I think we’re going to look closely to see if the smaller credit unions really have the resources and the technology to be able to fulfill the guidance,” Bloch said. CUNA’s Consumer Protection Subcommittee will also be commenting on whether fees for bounce protection plans should be reported as an annual percentage rate, which the Fed is looking into. “The problem here is that any fee that’s charged that could even come close to covering the cost, since the loans are short-term, it would be expressed in a very high annual percentage rate,” Bloch explained. “First off, for federal credit unions that are subject to the 18% usury ceiling, that pretty much would mean that they would no longer be able to offer such programs and also, for other credit unions, since you don’t really know how long the loan will ultimately be, it’s a very complicated and cumbersome process to try to figure out what that annual percentage rate is.” Bounce protection marketing has been generally considered by some as deceptive and CUNA is setting out to separate credit unions from the rest of the pack.