Compliance Blog

Posted by Anthony Demangone

When I look back on 2009, I might call this the year that lacked 6 words.  Had the Credit CARD Act contained "For a credit card account under..." much of our collective frustration could have been avoided.  And if I had hair, I would not be bald.

In any event, I thought I'd take a moment to recap where we are on the 21-day issue.

1. In May, the Credit CARD Act required us to mail or deliver periodic statements at least 21 days before the due date for all open-end loans in order to be able to treat those payments as late for any reason.

2. On July 15, the interim final rule that implemented the August 20 provisions of the Credit CARD Act.  And the rule did not stray from the Act.  We had to stick to the 21-day timing requirement, although the rule did create a "temporary" solution that would allow us to add a disclosure to our periodic statements if we could not fully comply with the 21-day requirement.

3. On September 29, the Fed issued a proposal to implement the February 22, 2010 provisions of the Credit CARD Act.   In the proposal, the Fed decided to republish the various proposals that it had issued recently that touch upon open-end lending.  A new comment clarifies the 21-day issue.  In short, it clarified the penalty for not complying with the 21-day proposal.  It seems to say that the prohibition against treating a payment late for any reason only lasts for 21 days after the mailing of a periodic statement.  This guidance appears to contradict what the Fed had issued in the interim final rule in July.

4. Just a few weeks ago, Congressman Jack Welch (D-VT) introduced a bill that would create a technical fix to alter the Truth in Lending Act to limit the 21-day provision to credit card accounts.  Last week, it seemed that the U.S. Senate was close to moving it on to President Obama's desk.  But this has not happened yet.

So we wait.

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Next week, I will host a free go-to-webinar to highlight NAFCU's online training program, designed for volunteers and new employees. Specifically, the webinar will take place next Tuesday, November 3, from 2 to 3 p.m., EST.  You can sign up for the register using the link above.

I'll go over the ins and outs, and those who sign up will receive a free trial to the training program so that you can kick the tires.  There's a good BSA module within the training program, so this may be something that your credit union could use.