Compliance Blog

Section 204 of the Credit CARD Act covers the posting of credit card agreements on the internet.  Section 204 amends Section 122 of the Truth in Lending Act by including subsection (d).

Posting Agreements.  Credit unions will need to post their credit card agreements on their website for viewing by the public.  If the credit union has numerous types of credit cards it offers its members, it appears each credit card agreement would need to posted separately.

Submission to the Federal Reserve.  In addition to posting their credit card agreements on their websites, credit unions will need to send their credit card agreements to the Federal Reserve.  The Federal Reserve must establish a central repository of all the credit card agreements it receives from creditors - including credit unions.  This central repository must be publicly available on the internet.

Regulations Needed.  The Federal Reserve in consultation with the federal banking agencies, including NCUA, and the Federal Trade Commission may issue regulations to specify the format for posting the agreements on the internet.  Additionally, the agencies have the authority to establish exceptions to the requirements to post credit card agreements on a creditor's website and send the agreements to the Federal Reserve.  

When would these exceptions exist?  The law gives the agencies the ability to provide exceptions where "the administrative burden outweighs the benefits of increased transparency, such as where a credit card plan has a de minimis number of consumer account holders."  

What is de minimis? It is unclear - but if you are a small credit union that will be greatly hampered by this requirement - make sure you submit your comments to the proposed rule from the Federal Reserve (and NCUA) making your case that a credit union of your size should be given an exception.  

Effective Date.  Section 204 does not include its own effective date - which implies it will become effective on February 22, 2010.  The Federal Reserves regulations could specify a different date in order to allow sufficient time for the Federal Reserve to set up a central repository.