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Oct 30, 2009
Categories: Consumer Lending

21-Day Fix on to President's Desk; Reg Z Proposal: Timely Settlement of Estates

Update by Anthony Demangone 7:55 p.m., Thursday evening

I just received an email from our lobbying dynamo, Brad Thaler.   Just minutes ago, the U.S. Senate passed H.R. 3606 by unanimous consent. This bill would make a technical correction to the Credit CARD Act to limit the 21-day requirements to credit cards, instead of all open-end lending.  The legislation now goes to President Obama's desk.  He is expected to sign it within days.

Many thanks to all of you for your help in getting this legislation to this point. We'll update you on any developments.

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Posted by Steve Van Beek

Today's blog will be a little lighter in content as we will take a look at a less controversial provision of the Fed's Reg Z proposal.  Section 226.11(c) requires Timely Settlement of Estates.  The summary of the provision lays out the main changes:
"E. Timely Settlement of Estates 
The Credit Card Act directs the Board to prescribe regulations requiring creditors to establish procedures ensuring that any administrator of an estate can resolve the outstanding credit card balance of a deceased accountholder in a timely manner. The proposed rule would impose two specific requirements designed to enable administrators to determine the amount of and pay a deceased consumer’s balance in a timely manner. First, upon request by the administrator, the creditor would be required to disclose the amount of the balance in a timely manner. Second, once an administrator has made such a request, the creditor would be required to cease the imposition of fees and charges on the account (including the accrual of interest) so that the amount of the balance does not increase while the administrator is arranging for payment."

Section 226.11(c) is broken down into three subsections.

  • (1) General Rule. Creditors need to establish reasonable procedures to ensure administrators or executors of estates can determine the amount of and pay any balance on the credit card account. 
  • (2) Fees and Charges. After receiving a request by an administrator or executor, the credit union would not be able to charge interest or late fees to the account.  There is an exception for a joint credit card accounts.       
  • (3) Timely Statement of Balance. Upon request from an administrator or executor, the credit union would need to provide a statement balance within a reasonable period of time.  The proposal considers 30 days, from the date of the request, to be reasonable.  
 The staff commentary also provides examples and additional information (see pages 12-13).   

Have a great weekend!  I'll be spending my Saturday moving and hoping the rain holds off (currently 30% chance - but on moving day that might as well be 75%).  

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