Be Aware of New and Coming Regs on FACT Act, Team Says

WASHINGTON – Requirements for which credit unions are responsible under the new Fair And Accurate Credit Transactions or FACT Act and those for which they might be responsible under coming regulations were the topic of a standing room only meeting of credit unions executives and board members attending CUNA’s Governmental Affairs Conference. A team of agency officials and credit union executives joined forces at CUNA’s GAC to present the material to the break-out session. The team approached the topic as though the credit union were walking through an application for credit with a member who had either been a possible victim of identity theft or had other circumstances which would trigger the act. Andrew Smith, a program manager for the Federal Trade Commission, joined with Regina Metz, a compliance officer with NCUA and Anne Gehring, a senior lawyer with CUNA Mutual Group to help the audience understand what credit unions are responsible for doing and not doing under the act, which replaces the former Fair Credit Reporting Act and to get a sense of what might be coming down the pike as federal regulators begin to put the legislation in regulatory form. Among the most immediate changes which are already in place are the fraud alerts which the regulations have mandated will come up on credit reports and which mandate the credit union to take additional steps to verify the member’s identity. Other topics included what a credit union must do when it is underwriting a loan that is secured by real estate as well who may receive a borrower’s credit information, for example in circumstances where there is a primary borrower as well as a co-signer on a loan. The panel called on credit unions to work though CUNA and the Leagues to help influence the regulations which, the panel admitted, will have to stem from a law which has been poorly written in some places. Among these in particular were the regulations involving medical information which, for example, would appear to preclude a credit union from using knowledge it may have about a loan applicant’s vehicle being modified for a handicap- even if the modification might significantly increase the cost of the vehicle and thus the loan. “Right now, all the financial regulators are wrestling with these issues and would welcome your input,” Smith said. – [email protected]