Regulation Z Proposal: Online Disclosures of Credit Card Account Agreements

Posted by Anthony Demangone

First, please accept my apology for such a post on a Friday. 

As you ready your credit union to comply with the massive changes to Regulation Z's open-end rules, do not put off today's topic too long.  While the online disclosure of credit card account agreements sounds like it could be simple...it simply is not.  In short, you'll need to post your credit card agreement on your website. And you'll have to submit them to the Fed as well.  The Fed will create a website where people can go to view all the credit card agreements that exist in American. 

Yee-haw.  Pop me some popcorn.  I can't wait.

In today's post, I wanted to give you a taste of what is involved.  For painful, excruciating detail, please refer to this document. 

• First, note that the Fed created a "small issuer" exemption.  If your credit union has less than 10,000 credit card accounts open (including dormant accounts), you are not subject to the requirement to submit agreements to the Fed. 
• The new requirements will be housed at 12 C.F.R. Part 226.58.
• Even if your agreements do not include pricing (i.e., APRs), you'll need to provide this information to the Fed, along with applicable fees.
• You only need to upload agreements to the Fed that you currently offer to the public.
• You'll need to register with the Fed, and upload agreements electronically to them 4 times a year.  The Fed indicates that it will provide specific details on how to do this in the near future. 
• While the quarterly submissions are generally due no later than the first business day after January 31, April 30, July 31, and October 31, there is special timing for the first two submissions.  The first submission would be due February 22, 2010, and the next one would be due August 2, 2010.
• Here's the rub.  Or one of them, anyway.  If you change your agreement, including pricing or provisions) you need to update the agreement on the next quarterly submission.  And if an agreement no longer is offered, you'll need to notify the Fed about that as well.
• Much of the specifics are outlined in Appendix N of Regulation Z.

As I said, I apologize for sending this to you on a Friday.

***

We are reworking our regulatory compliance newsletter.  After we began the process, we realized that we had a terrible name.  What happens when you let attorneys name a newsletter?  Well, we called ours...The NAFCU Regulatory Compliance Newsletter.  Pretty creative, huh?

Well, what should we call it?  We're asking you, NAFCU members, to come up with a new name for the new newsletter.  I'll give some sort of award for two entries: 1) one for the name we end up using; and 2) one for the name that makes me laugh the hardest.

Send ideas to [email protected].

***

Have a great weekend, everyone!  (Even you Buckeye fans.)

Comments

[Cindy]

Call it the "How to Make My Co-Workers Hate Me More Newsletter".

[Southernmost Sue]

"Comply or Die" or
"Uber-Geeks Anonymous" or
"This Won't Hurt a Bit" or
"This Stuff is Interesting,Really I Swear"

[Joanne]

We are...Penn State!

[Anthony Demangone]

Editor's note: Even if you are exempt from submitting agreements to the Fed, you're still on the hook for posting them to your own website. This comes from the proposal:

As proposed comment 58(f)-2 would clarify, the requirement to provide access to credit card agreements under proposed § 226.58(f)(2) would apply to all open credit card
accounts under open-end (not home-secured) consumer credit plans, regardless of whether such agreements are required to be submitted to the Board pursuant to proposed § 226.58(d). For example, an issuer that is not required to submit agreements to the Board because it qualifies for the de minimis exception under § 226.58(e) would still be required to provide cardholders with access to their specific agreements under § 226.58(f)(2). Similarly, an agreement that is no longer offered to the public would not be required to be submitted to the Board under § 226.58(d), but would still need to be provided to the cardholder to whom it applies under § 226.58(f)(2).

[Joyce]

According to the proposal, card issuers are to register with the Board by 2/1/2010 in order to post their card agreements online. Have there been any updates regarding the registration process? I have not been able to find anything.
Thanks!

[Anthony Demangone]

Nothing on this yet. I would think that the final will come out shortly, but I've been saying that for weeks.