Periodic Statements under the new Reg Z
Written by Steve Van Beek
Everyone is aware of the changes to periodic statements that becomes effective July 1, 2010. Â However, there has been some confusion about which is the first set of periodic statements that need to include the new information. Â The June cycle? Â The July cycle? Â
The Federal Reserve's section on mandatory compliance dates (part of the Credit CARD Act final rule) contains the answer - from page 5-6:
"For all other requirements of ç 226.7(b), periodic statements mailed or delivered on or after July 1, 2010 must comply with the final rule. For example, if a creditor mails a periodic statement to the consumer on June 30, 2010, that statement is not required to comply with the final rule, even if the consumer does not receive the statement until July 7, 2010.ÂFor periodic statements mailed on or after July 1, 2010, fees and interest charges must be disclosed for the statement period and year-to-date. For the year-to-date figure, creditors comply with the final rule by aggregating fees and interest charges beginning with the first periodic statement mailed on or after July 1, 2010. The first statement mailed on or after July 1, 2010 need not disclose aggregated fees and interest charges from prior cycles in the year. At the creditorâÂÂs option, however, the year-to-date figure may reflect amounts computed in accordance with comment 7(b)(6)-3 for prior cycles in the year."  (emphasis added).
Also, in that same paragraph the Federal Reserve mentions that the Year-to-Date total figure for 2010 does not need to include the amount of fees or interest from prior billing cycles (i.e., fees and interest that were charged from January 2010 through the end of the May 2010 billing cycle). Â
However, this could be confusing to members as the disclosure would state "Total Fees Charged in 2010" or "Total Interest Charged in 2010" but would only include fees and interest from the June billing cycle forward. Â While not required, credit unions may want to work with their processor to include some additional information that clarifies that the "Total" only includes fees or interest from the June billing cycle forward. Â This could help prevent member confusion - especially if the member knows he/she was charged a fee in March and April but the "Total Fees Charged in 2010" is showing $0.00. Â An asterisk and disclosure with this additional information should work (but be sure to remove this information when the statements flip over to 2011). Â Â