If you are reading this, you must have some interest in how the Credit Card Act of 2009 (CCA2009) is impacting credit unions. Finding and implementing a compliance solution to CCA2009 has been all consuming lately at FORUM Solutions and has made us a little cranky (maybe it is just me being cranky). With this act being signed by President Obama on May 22, the interim final ruling being issued on July 15 and a compliance date of August 20 calling it a short window is being generous. Here at FORUM we are swept up in the CCA2009 compliance tornado because of our use of the multi-featured open-ended lending (MFOEL) platform. We have enjoyed this platform for many years as it has given us the ability to remove obstacles and burdens from the loan application process for our members who are repeat and loyal borrowers from the credit union. This has streamlined processes making us more efficient in our lending process which results in lower transaction costs per loan initiated and these lower costs are passed on to our members in the form of lower loan rates. The CCA2009 language includes not just credit cards, but any loan issued under this MFOEL platform which for us includes auto loans, signature loans, overdraft protection lines of credit, and home equity lines of credit. Really the only loans not impacted are auto loans originated at the dealership (done under a closed end note), fixed term second mortgages, and first mortgages. Here at FORUM more than 25,000 member loans are impacted by this new rule. In a nutshell, compliance to CCA2009 means we have to issue a statement with specific data elements as a kind of payment reminder to the member at least 21 days in advance of the due date. I won’t bore you with the details of the data elements. The important thing to keep in mind is depending on a member’s due date their regular monthly statement won’t necessarily satisfy the new requirement for 21 day notice and for those on payroll deducted payments how do you give 21 days notice when they pay weekly or bi-weekly? In our opinion, this is where the unintended consequences comes in – did the legislators really intend to include such loan situations and potentially penalize those on payroll deduction? We applaud their efforts in attempting to clean up unscrupulous credit card behavior by mostly mega credit card issuers, however we just think the quick action swept more in to the scope of this than they intended. We sent our comment letter to the Federal Reserve Board (at least made us feel better for a few minutes) and have been working on the solution. Interested in what we are doing? – read on…

The FORUM Solutions team led out on finding the best compliance option that would be one, member centric and two, cost efficient. We had several ideas and narrowed them down to two after much debate and help from legal counsel as well as talking to other credit unions. The final two were bumping due dates on loans that did not have an end of month due date and modifying our regular statements to comply with the Act and issuing modified loan statements with a coupon payment reminder. We settled on the delivery of modified loan statements. We didn’t want to bump members’ due dates and we didn’t want to mess with their payroll deduction either. Speaking of payroll deduction we did figure out a way to preserve this payment behavior. For those members who are enrolled on e-Statements (60%+) we will be delivering these new payment reminder statements electronically and for the others we will delvier through paper. We are blessed here at FORUM Solutions to have such a talented and passionate team. I really don’t like it when people call us the IT department, thus the name FORUM Solutions, as we do so much more than information technology. The team gets credit unions and credit union lending. Many of my teammates have been reading not only the CCA2009 language but also Regulation Z in their attempt to better understand the problem so we can deliver the right solution – trust me that is a sign of dedication. Thankfully we have the talented designers, systems gurus, and developers on the team to think of, mold, and implement a custom solution that is member centric, cost efficient and compliant. We will make the deadline and we feel good about the solution. I have talked to many credit unions that aren’t in a position to make the deadline and as a result have to suspend collecting late loan fees and reporting to the credit bureaus which is not fair to the overall membership. Clearly unintended consquences in our opinion and we still have hope that perhaps this Act will be modified in the near future.