As credit unions are well aware, Regulation Z's new open-end lending rules under the Truth-in-Lending Act take effect July 1, 2010. Regulation Z establishes (among other things) uniform methods for disclosing credit terms. There is a lot of confusion among credit unions regarding the rules' effect on multifeatured credit plans.

Under the old rules, credit unions were allowed to provide open-end disclosures to all subaccounts under their plans, regardless of whether it was a revolving line of credit or a closed-end subaccount, such as a vehicle loan underwritten by the credit union.

In 2007, the Federal Reserve Board began its periodic review of the open-end rules. Through that process, it learned how credit unions' multifeatured plans work. The board said it could understand why Regulation Z was interpreted to allow open-end disclosures on closed-end subaccounts. But it also stated that it never intended the rules to be applied that way and closed the loophole when issuing its final rule in January 2009. The board emphasized that the Truth in Lending Act and Regulation Z have distinctly different rules for open-end and closed-end credit. It ruled that under a multifeatured plan, open-end advances must receive open-end disclosures and closed-end advances must receive closed-end disclosures.