Six times a year, NAFCU publishes "The Federal Credit Union." Each issue contains a compliance-related column. The most recent installment is "The Reasons Why." I designed it as a tool for my fellow tellers and members service reps. (That's where I started in credit union land.) The column supplies regulatory answers to some common member complaints. NAFCU members can access it here. NAFCU members: if you'd like a pretty .pdf of the article, please email us at [email protected].
For you non-NAFCUers, Here's a snippet:
The situation: A member writes a check on Jan. 1, 2008 , but dates the check March 1, 2008. The payee deposits the check right away, and your credit union clears the check against your member’s account. The member is quite upset and demands an explanation.
The explanation. The Uniform Commercial Code allows credit unions and banks to pay postdated checks, as long as a member has not given the credit union notice of the postdating. In addition, the member must give the notice “at such time and in such a manner” that gives a credit union a reasonable opportunity to act on the item. If the member provides such a notice, it is effective for the same amount of time as a stop payment. The rationale is clear. When a member postdates a check, it is an agreement between the member and the payee. As credit unions clear millions of checks each year, it is unreasonable to expect them to look for postdated checks unless the member brings it to their attention beforehand. If the member asks where he can read this, point him to UCC § 4-401(c).
The column addresses seven other situations. Enjoy.
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NCUA recently issued a Fraud Alert to warn credit unions about a HELOC-related scam. The scam involves fraudulent wire transfers involving home equity lines of credit, and it has occurred at several financial institutions, including credit unions. Read the NAFCU Today article about it here. A few members indicated that they've had a hard time locating the alert. Ask and you shall receive. Access the actual Fraud Alert here.
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NAFCU has asked the NCUA Board to extend the compliance deadline for the fair-credit affiliate marketing rule until April 1, 2009. We've spoken with quite a few members who have highlighted the numerous operational challenges involved in complying with the rule. Read about the extension request here. We're holding a webcast this Wednesday to address affiliate marketing. You can read more about the webcast here.
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