Corporate Assessment; Opt In Issue; Credit Card Agreement Specifications; FinCEN "Stored Value" Rule
Posted by Anthony Demangone
NCUA has issued Letter to Credit Union 10-CU-09 to discuss the recent NCUA board actions concerning its corporate stabilization program. Â If your credit union has questions about the 13.4 basis points assessment, this guidance provides a good deal of information.Â
***
Here was an interesting issue that I just stumbled upon. Â A credit union called to note that certain gas stations near his credit union have created their own "debit card." (I'm assuming this is nation-wide.) The card links to the member's credit union account, but it clears as an ACH transaction. Â The question was this: how do these cards fit within Regulation E's overdraft protection rule? Â Answer:Â They don't. Â
Regulation E's ODP opt-in rule only applies to cards issued by or on behalf of the account-holding bank or credit union. Â This comes from the Official Staff Interpretation section of Regulation E:
Section 205.17(b) applies to ATM and one-time debit card transactions made with a debit card issued by or on behalf of the account-holding institution. Section 205.17(b) does not apply to ATM and one-time debit card transactions made with a debit card issued by or through a third party unless the debit card is issued on behalf of the account-holding institution. ç 17(b)(1)(i) of the Official Staff Interpretations supplement to Regulation E.Â
***
A little birdie told me that she received an email from the Fed indicating that the Fed will create new technical specifications for submitting credit card agreements per Reg Z.  The next submission is due by August 2, 2010. Reportedly, the Fed will be emailing the new specifications shortly.Â
***
The Credit CARD Act mandated that new regs be issued to address the "stored value" system in relation to anti-money laundering and financial crimes.  Well, FinCEN yesterday, FinCEN issued a proposal to deal with that mandate.  The proposal, though, does not apply to depository institutions.   It is focused on MSBs.  But don't forget that the recent changes to the BSA manual do discuss risk mitigation controls for credit unions that offer stored value products. Here's a 7-page overview (member log-in needed) of the BSA manual changes. It will be made available to anyone who signs up for our July 14th webcast, which will also address the BSA changes.Â