Compliance Blog

Written by Steve Van Beek

Today, I wanted to highlight three technical changes to your disclosures that need to be made prior to January 1, 2013.  I'd recommend trying to get these updated and changed early as there will surely be numerous rulemakings coming from the CFPB in the second half of 2012.  Also, these changes might require working with your forms providers so it makes sense to build in a little extra implementation time.

Regulation Z - Credit Card Application & Account Opening Disclosures

Sections 12 CFR 1026.60 (applications and solicitations) and 12 CFR 1026.6 (account opening disclosures) were changed during the CFPB's republishing to reflect the CFPB's authority over Regulation Z and credit cards.  

After January 1, 2013, your credit card disclosures would need to reference the CFPB (in the past they mentioned the Federal Reserve).  You can see the small change by viewing the Fed's prior G-10(B) model form with the CFPB's current G-10(B) model form.    

Additional details and discussion available in this January 10, 2012 blog post.  

Regulation B - Adverse Action Notices

The CFPB's republishing of Regulation B also resulted in a required change - by January 1, 2013 - for Federal Credit Unions.  FCUs under $10 billion in assets need to change their notices to include NCUA's Office of Consumer Protection.  FCUs over $10 billion in assets would need to include the CFPB's address.  

State-chartered credit unions should check the address on their notices and determine if it matches the FTC address in #9 from Appendix A.  FCUs can also find the appropriate address in Appendix A of Regulation B.  

For additional details, check out this January 13, 2012 blog post.    

Regulation V - Risk-Based Pricing Notices

Regulation V was also tweaked during the Great Regulatory Republishing of 2011 and will require the CFPB's address on risk-based pricing notices after January 1, 2013.  

The requirement comes from 12 CFR 1022.73(a)(1)(viii) which mandates that credit unions provide this on their risk-based pricing notices:

"(viii) A statement directing consumers to the Web site of the Bureau to obtain more information about consumer reports;"

The commentary to Appendix H indicates that credit unions can use the reference to the Federal Reserve until January 1, 2013 as the disclosure about the Fed is considered an "acceptable change":

"ix. Until January 1, 2013, substituting “For more information about credit reports and your rights under Federal law, visit the Federal Reserve Board's Web site at www.federalreserve.gov, or the Federal Trade Commission's Web site at www.ftc.gov. â€ for “For more information about credit reports and your rights under Federal law, visit the Consumer Financial Protection Bureau's Web site at www.consumerfinance.gov/learnmore. â€"

After January 1, 2013 - credit unions need to make sure they have the updated language referencing the CFPB.  Appendix H has the model forms where you can see the risk-based pricing notice requirements.  

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An interesting twist is that the CFPB's webpage - www.consumerfinance.gov/learnmore - doesn't have any new information for consumers and they just link to existing information from other agencies.  If those agencies failed to protect consumers, how is providing the same information going to change this?