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Gigantic Changes to Regulation Z Rules for Open-end Credit
(Presented By: Mary Beth Guard and Jack Holzknecht)
WHAT?
The Regulation Z Rules for open-end credit are changing, and changing, and changing again. The changes impact all types of open-end accounts. It is challenge to just list everything that is unfolding.
  | WEBINAR TIME:
11:30AM - 1:30PM PT
12:30PM - 2:30PM MT
1:30PM - 3:30PM CT
2:30PM - 4:30PM ET |
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On December 18, 2008 the Federal Reserve Board issued final rules to revise the open-end credit rules in Regulation Z. Those rules have since been amended by the Credit CARD Act.
On December 18, 2008 the Federal Reserve Board issued final rules to revise the open-end credit rules in Regulation AA.
On May 22, 2009, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) was signed into law. The Credit CARD Act amends the Truth in Lending Act (TILA) and establishes a number of new requirements pertaining to open-end consumer credit plans.
Stage One - On July 15, 2009 the Federal Reserve Board issued interim final rules to implement selected sections of the Credit CARD Act. The July revisions became effective on August 20, 2009.
Stage Two - On September 29, 2009 the Federal Reserve Board proposed additional rules designed to protect consumers who use credit cards from a number of potentially costly practices.
Stage Three - On January 10, 2010, the Federal Reserve Board withdrew the December, 2008 amendments to Regulation Z and Regulation AA and adopted extensive new changes to Regulation Z to implement the CARD Act, with many of the new provisions slated to take effect February 22, 2010.
Stage Four - The remaining provisions of the Credit Card Act go into effect on August 22, 2010.
Interim Stage - On November 6, 2009 President Obama signed the Credit CARD Technical Corrections Act (CCTCA). The CCTCA amends the Truth in Lending Act, as amended by the Credit CARD Act, to make a technical amendment with respect to the timing of payments related to open end consumer credit plans. The CCTCA narrows the coverage to credit card accounts.
On July 23, 2009 the Federal Reserve Board proposed significant changes to Regulation Z rules to improve the disclosures consumers receive in connection with Home-equity lines of credit (HELOCs).
TOPICS
Upon completion of this program participants will understand:
The status of final rules that revise Regulation Z for open-end accounts other than home equity lines of credit;
- Types of credit covered by the rules; and
- New disclosure rules for:
- account-opening disclosures;
- periodic statement disclosures;
- change-in-terms notices;
- credit and charge card application and solicitation disclosures; and
- advertising provisions.
The prohibitions against engaging in certain acts or practices in connection with consumer credit card accounts.
- Unfair acts or practices regarding time to make payment.
- Unfair acts or practices regarding allocation of payments.
- Unfair acts or practices regarding increases in annual percentage rates.
- Unfair balance computation method.
- Unfair charging of security deposits and fees for the issuance or availability of credit to consumer credit card accounts.
The Credit CARD Act requirement (as amended by the CCTCA) to ensure that periodic statements are mailed or delivered at least 21 days prior to the payment due date and the date on which any grace period expires, including:
- Types of credit covered by the rules;
- What constitutes reasonable procedures;
- The meaning of "treating a payment as late for any purpose;"
- The definition of payment due date;
- The payment due date exceptions;
- Free ride or grace periods;
The Credit CARD Act rules governing notices of changed terms, including:
- When notices are and are not required;
- The timing of notices for different types of changes;
- What constitutes a "significant change in terms;"
- Content of the required notices;
- Requirement for a toll-free number; and
- Penalty rates;
The final amendments to Regulation Z to:
- Protect consumers from unexpected increases in credit card interest rates by generally prohibiting increases in a rate during the first year after an account is opened and increases in a rate that applies to an existing credit card balance;
- Prohibit creditors from issuing a credit card to a consumer who is under the age of 21 unless the consumer has the ability to make the required payments or obtains the signature of a parent or other cosigner with the ability to do so;
- Require creditors to obtain a consumer's consent before charging fees for transactions that exceed the credit limit;
- Limit the high fees associated with subprime credit cards;
- Ban creditors from using the "two-cycle" billing method to impose interest charges; and
- Prohibit creditors from allocating payments in ways that maximize interest charges; and
The status of rules to revise the Regulation Z rules that are applicable to Home Equity Lines of Credit that require new:
- disclosures at application;
- disclosures at account opening;
- periodic statements; and
- change-in-terms notices
WHY?
This program contains core knowledge all banks need to comply with the rapidly unfolding rules for open-end credit.
WHO
This program is designed for operations officers, compliance officers, loan officers, auditors and others who must comply with rules regulating open-end credit.
About the Speakers:
Jack Holzknecht is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. He is an experienced consultant who has provided training to thousands of bankers and examiners for twenty-four years. He has the ability to identify the key compliance issues from each regulation. Jack's career began in 1976 as a federal bank examiner. He later headed the form and software and education divisions of a regional consulting company. In that capacity he developed loan and deposit form systems and software. He also developed and presented training programs to bankers in 43 states. Jack has been an instructor at compliance schools presented by the Georgia, Iowa, Kentucky, Pennsylvania, Nebraska, New York and Texas bankers associations. He developed and delivered compliance training for the FDIC and OTS for ten years. He is a Certified Regulatory Compliance Manager and a member of the National Speakers Association. He is also a "BOL Guru" at http://www.bankersonline.com/ and frequently answers compliance questions sent to "Bankers' Threads."
Mary Beth Guard currently serves as Executive Editor of BankersOnline.com and CEO of Glia Group, Inc., Mary Beth has had a long and distinguished career, graduating from law school in 1980. She has focused her work exclusively on the banking industry since 1984. Previously, Mary Beth served as EVP/General Counsel and COO for the Oklahoma Bankers Association, EVP of Specialized Services for Thomson Financial Publishing, and General Counsel for the Oklahoma State Banking Department. Mary Beth is on the advisory board for Bankers' Hotline and Compliance Action, as well as on the editorial board for ABA Bank Compliance magazine. She has presented training programs for virtually every major national financial industry association, as well as more than a dozen state bankers associations and a host of other organizations. In addition, Mary Beth has written more than a thousand banking-related articles and is a BOL Guru.
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888-229-8872