By Mary Arnold
With slightly less than three months to comply with the first requirements of the Credit CARD Act of 2009, credit unions have completed what might be called the "speed round."
And, for the most part, they aced it, based on responses to a CUES Net survey that CUES member Patrick Williams conducted with participants in the members-only listserve. After regularly sharing their frustrations at the inadvertent consequences of the act for open-end lenders and batting around various compliance methods for the greater part of two months, 82 percent of respondents pronounced themselves in compliance, reported Williams, chief information officer for $575 million Philadelphia Federal Credit Union.
He announced the two-question, online survey to the listserve on Aug. 20, the first CARD Act deadline, because "I was seeing so many various solutions to the problem that I thought it would be helpful to understand how the credit union industry has handled the problem as a whole. Each solution had its supporters and detractors, and each solution had different impact on the cost to the credit union, while not addressing what the member really wants, but attempting to comply with what Congress believes is best for the consumer."
On Aug. 26, Williams reported the results, based on 248 responses, or about a 15 percent response rate. For those in compliance, the most popular way of getting there was moving due dates later in the month (57 percent), followed distantly by printing multiple due dates on statements (17 percent). Extending the time until late fees would be charged and "other" each scored 16 percent of responses. Sending separate loan statements/billing notices (12 percent), ceasing to charge late fees (12 percent) and changing the statement mailing (10 percent) rounded out the list of actions. Another four percent reported doing "nothing."
Eleven percent of those deeming themselves not in compliance also reported doing nothing, though most had taken actions: moved due dates later in the month (31 percent), stopped charging late fees (20 percent), printed multiple due dates on statements (18 percent), extended the time until late fees would be charged (18 percent), "other" (18 percent), and sending separate loan statements/billing notices (13 percent).
In a few comments pertaining to the "other" category, 'Netters said they were taking advantage of the Fed's "short period of time" provision, in which prominent disclosure can substitute for delivering the statement at least 21 days in advance of the due date. As explained by NCUA Chairman Debra Matz on Aug. 28, this disclosure can be "elsewhere on or with the periodic statement" and should explain that "the consumer’s payment will not be treated as late for any purpose if received within 21 days after the statement was mailed or delivered.”
No definitive word yet on how how long a "short period of time" might be.
Mary Arnold is VP/publications for CUES.
