WASHINGTON – Credit unions should not look for any relief in complying with several provisions of the CARD Act, which go into effect tomorrow, Aug. 20. The Federal Reserve has sent a letter to CUNA saying its ability to provide relief from the legislation's requirements is constrained by the CARD Act's legislative language.
Both CUNA and NAFCU have been seeking relief from certain aspects of the Act related to open-end lending [for details, search CARD Act in the cujournal.com search engine]. In its letter, the Fed did say credit unions have the option for a "short period of time" (which it did not further define) after August 20 to provide the required disclosures elsewhere on or with the member's statement indicating the member's payment will not be treated as late for any purpose if received within the allowed 21-day window.
Doing so would allow the credit union to assess late fees if the payment is made after the 21-day period. For state chartered CUs, the rule will be enforced by the Federal Trade Commission; for federals, by NCUA.