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CAC Discussions
The Consumer Advisory Council discussed a variety of current topics at its fall 2004 meeting. The meeting is always an early alert for the year's compliance issues.
The first topic on the agenda was CRA - always a CAC classic. The Council discussed the current divergence in the agencies' CRA rules, with bank representatives expressing concerns that different rules could have uneven effects, even including an impact on safety and soundness. Consumer advocates generally supported uniformity but not at any price. The consumer advocates believe that the $1 billion distinction for small or large banks is not appropriate. Banks can expect opposition to any such proposal from the other agencies.
Both banks and consumer activists agreed that the community development test needs work. Examiners have narrowed the meaning of the test and made it difficult for many smaller banks to meet the test. Consumer groups do not want to see this problem solved simply by raising the threshold.
It should be no surprise that bounce protection was hotly discussed. The primary concerns here were the concerns that the programs were not properly disclosed and many actually promoted with some deception in the marketing. Consumer advocates want the programs to be covered by Truth in Lending, which would be accomplished by making an adjustment to the definition of credit in Regulation Z. Clearly the industry would be wise to provide clear information about any bounce protection program.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 12, 11/04
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