WASHINGTON-Though some have said a merger between CUNA and NAFCU would be beneficial to credit unions, the Federal Reserve's recent proposal to standardize the "clear and conspicuous" provisions of a number of consumer protection regulations is one example where the trades' points of view diverge. While NAFCU offered overall support for the Fed's proposal in its official comment letter, CUNA argued that while it supported the idea of standardization, the Fed's timing was poor. According to CUNA, the "clear and conspicuous" standards of Regs Z, B, E, M, and DD would conform to the standards outlined in the privacy regulations, which are currently undergoing amendments aimed at simplifying them. "With changes to the content and format of the privacy notices under consideration, we do not believe it would be advisable to change the existing `clear and conspicuous' disclosure requirements in Regulations Z, B, E, M, and DD to conform to a standard that has not proven to be useful for consumers and that may change in the future," CUNA Assistant General Counsel Jeff Bloch wrote. The Fed has proposed these changes in response to the perception that the notices are too difficult to comprehend and not serving their intended purpose. "While we didn't totally oppose the concept-the concept has a lot of merit-the problem with it is the agencies are now looking at their privacy notices and that would also.need to be standardized with these other notices that the Fed is trying to tinker with," CUNA Associate General Counsel Mary Dunn explained. She added that the Fed's timing is "off-the-mark." On the other hand, NAFCU's comment letter read, "NAFCU believes that consumer disclosures should be obvious, clear, and easily understandable. Standardization will not only serve to inform and protect consumers, but should also assist financial institutions with compliance." NAFCU President and CEO Fred Becker wrote that the trade association generally agreed with the Fed's proposal that "clear and conspicuous" should mean a disclosure that is reasonably understandable and designed to call attention to its importance. However, some NAFCU member credit unions raised concerns over this last standard. Mostly, they were concerned that implementing such standards would burden them with additional reprinting and paper costs. Additionally, members noted that the current model forms might not be appropriate for the proposal so those should be updated as well. CUNA also stated that proposed model language would enhance the comment process. In addition, CUNA emphasized that the information to be disclosed under Regs Z, B, E, M, and DD is more technical than that included in the privacy notices and questioned whether the same format would be sufficient; the proposal could actually result in longer disclosures, Bloch wrote. He added, "The compliance burden of reviewing, redesigning, and reissuing disclosures will outweigh the benefits for consumers." Both groups agreed the changes required at least an 18-month compliance period. CUNA and NAFCU also wrote in their respective comment letters that the current disclosures regarding credit protection program fees, such as debt cancellation and protection programs, are adequate as they stand. These fees should not be included as a finance charger under Regulation Z. -

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