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Compliance changes lead credit unions into 2010


The compliance changes keep coming. Here’s a look at a few recent developments and upcoming compliance deadlines for 2010:


  • Check processing. We told you in last month’s League News that sometime in early 2010, all of the nation’s paper checks will be processed in just one place – Cleveland. The government has announced that Feb. 26 is the big day. After that, checks from across the country will have to be treated as “local.” That means unions will need to change how fast they make funds available when a member deposits a paper check. Credit unions may need to update their disclosures and lobby posters, too. For more information, see The League’s Dec. 4 Compliance Courier article, online here.


  • Truth In Lending. Keep an eye out for final rules on the Truth in Lending changes that go into effect Feb. 22. A few dozen rules are being changed, so this is a big amendment to Reg. Z. Most of the rules will affect credit cards, but some affect other kinds of open-end lending, too. The League covered the proposed rules in a recent compliance webinar – Regulatory Update Part II held on Oct. 27. To purchase an archived recording of the webinar, contact Judy Phillips at (800) 242-0833, Ext. 6020.


  • FACT Act. In 2003, the “FACT Act” made big changes to the nation’s credit reporting laws. This month, the regulators finally got around to issuing the last of the rule changes that the FACT Act required. Credit unions that do risk-based pricing will have to give consumers a special notice if they get credit on less favorable terms than other people because of their credit report. The alternative will be to let everyone who applies for consumer loans know their credit scores. Your credit union will have plenty of time to get ready for this change; the final rules are effective January 1, 2011. The League will update its “Guide to the FACT Act” soon with details.


  • Garnishments. In mid-December, Wisconsin updated its list of property that creditors cannot reach when trying to collect on a debt. The $1,000 exemption for consumers’ personal accounts went up to $5,000. This affects how credit unions should respond when other creditors garnish a member's credit union accounts. Similarly, when the credit union is trying to collect on a debt, a debtor will be able to protect more funds held in a personal bank account from garnishment by the credit union. Collateral on a secured loan is not subject to these exemptions.


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