The ink is barely dry on the credit card rules' overhaul and CUNA and NAFCU are asking lawmakers and the Federal Reserve to clarify or change provisions.
The focus of concern is the requirement that credit unions mail statements for credit cards and open-end loan products 21 days before payment is due. The trade associations say including open-ended loan products-such as lines of credit associated with checking accounts and home equity lines of credit-would create expensive compliance costs for credit unions. The provision will take effect Aug. 20.
“Many credit unions let members choose monthly due dates…and also to provide them with consolidated monthly statements that often combine their account activity with their loan activity,” NAFCU Director of Compliance Anthony Demagone said in an interview. “But if they have to give 21 days notice they would be sending out statements all the time and this would make it prohibitively expensive to comply.”
He said this could cost some credit unions about $100,000 between compliance and lost fees.
CUNA compliance experts wrote in a memo to credit unions that the safest way to comply with the credit card provisions is to push back the payment due date beyond the 21-day mailing period.
But on the open-end loan products, they wrote, adjusting due dates “cannot simply be done across the board” without creating extensive problems. CUNA said the biggest problem will be with home equity lines of credit, because existing regulations make it hard to adjust a payment due date once a contract has been signed.
Both trades have sent letters to Congress and plan to write the Federal Reserve.
The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 was signed into law in May, with certain provisions taking effect in August.
The new law requires card issuers to reassess customers' interest rates every six months if the issuer raises the rate, and bans raising rates unless a consumer is more than 60 days late on a payment, interest rate hikes on existing balances, and double-cycle billing.
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