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Jan 22, 2010
Categories: Consumer Lending

Reg Z Grab Bag; NAFCU Member Conference Call

Posted by Anthony Demangone

Here are a few issues that have come up regarding the new Regulation Z final rule. 

  • We know that there is a general prohibition on increasing rates and certain fees during the first year after a credit card is opened.  The final rule clarifies that the prohibition will only apply to new accounts opened on or after February 22, 2010.  See p. 519 of the final rule. 
  • The date for determining whether a change-in-terms notification  must comply with the new requirements of Regulation Z is generally the date on which the notice is sent.  So, if a change-in-terms is mailed on February 21, 2010, you'd follow the July 2009 interim final rule's requirements.  If you sent it on February 22, 2010, you'd follow the new rules. See p. 497 of the final rule.  The Fed gives this example: 

For example, if the change being disclosed is a rate increase due to the consumer’s failure to make a required minimum payment within 60 days of the due date, a notice provided prior to February 22, 2010 is not required to disclose the consumer’s right to cure the rate increase by making the first six minimum payments on time following the effective date of the rate increase.  

But don't forget the major exception to this general rule I dealt with in this blog post.  

  • The 45-day notice requirement for changes in terms applies to all open-end (non-home secured) loans on February 22, 2010, not just to credit cards.  Take a look at footnote 1 on page 8 of the final rule. 
  • The Federal Reserve has created this website to alert consumers to the new protections.  Clearly, this is what the Fed views as the most important changes.  This website is certainly worth a glance or two.
  • Many of you have signed up for the blog in the past few days.  If you are looking for Reg Z resources, don't forget these two posts: 
  1. This blog post pulls out and organizes the major sections of the final rule that will take effect February 22, 2010.  
  2. This blog post rips out the overview and other useful sections from the final rule.  
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Attention NAFCU members: Please mark your calendar for "Challenges & Opportunities," a NAFCU member-only conference call on Wednesday, Feb. 10, from 4-5 p.m. EST. NAFCU President Fred Becker and the association's senior staff (including me) will report on the latest developments in Washington affecting credit unions, including the proposed Consumer Finance Protection Agency, overdraft protection and interchange fees, financial services reform and recent trends in compliance and regulation. In addition, we will discuss the outlook for the economy.

The Member Call-In is free, but you must register to participate. Call our Member Service Center at (800) 344-5580 or register online here. 

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Have a great weekend, everyone.

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