NAFCU Regulatory Final on Reg Z

Posted by Anthony Demangone

NAFCU has released its Regulatory Final for the Regulation Z final rule.  It is available for members here.

Here's a snippet of the good stuff you'll find inside:

Summary of Major Differences between the Proposed Rule and the Final Rule

The following includes the section number and a brief summary of the most significant changes to the final rule that either differ from the proposed rule or that simply were not discussed in the proposed rule. For more information on any of these significant changes, please see the section-by-section analysis for the section referenced.

§ 226.55(b)(2) – Variable Rate Exception. The rule states that an issuer that includes an interest rate floor in a variable rate plan may not use the variable rate exception to increase the interest rate on an account.

§ 226.55(b)(3) – Advance Notice Exception. The rule effectively states that any issuer that did not send a change in notice terms by January 7, 2010 is prohibited from increasing the APR on an existing balance even if notices are sent out prior to the February 22, 2010 effective date of this rule.

§ 226.7(b)(11)– Due Date; Late Payment Costs. The final rule authorizes an issuer to set a due date of the last day of the month. The proposed rule would have required due dates to be the same numerical day each month, effectively prohibiting due dates on the 29th, 30th or 31st of any month.

§ 226.56 – Requirements for Over-the-Limit Transactions. The final rule requires issuers to provide consumers confirmation of the decision to opt-in to have over-the-limit transactions honored. The proposed rule sought comment on whether the Board should impose such a requirement.

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NAFCU Members, we've also updated our Reg Z overview document to include the following sections:

• Subprime Fees on Credit Cards

• Limitations on Fees in the First Year of Credit Card Account

• Double-Cycle Billing Prohibition

You can access it here.

Comments

[Greg Daniels]

waht are most CU's doing to have members opt-in for over the limit fees? Do you know of any CU's stopping this practice?

[Anthony Demangone]

Hi Greg,

I don't have a grip on what the industry is doing as a whole. But I am aware of many creditors that are doing away with the fees.

- Anthony

[Diane Hatcher]

After reading up on the subject, looks like the easiest way to comply would be to not charge overlimit fees. As small as our credit card portfolio is, it would be too time consuming (time is money) to monitor an opt-in/opt-out system. The cost would outweigh the benefit.
I wish the law makers would understand these are fees that are AVOIDABLE and are in place to teach financial responsibility.