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#1222527 - 07/24/09 09:02 PM Re: Credit Card Reform Act/OE Loans MHuff
AuditorK Offline
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I believe that's the case Compliance Rookie. You also can't report them as delinquent to a credit reporting agency.

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#1222606 - 07/24/09 10:53 PM Re: Credit Card Reform Act/OE Loans AuditorK
Dolly Nugent Offline
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Southern California
Well, I'm not crazy after all! This is what I posted a few days ago.
"Update. I just looked at our ODP product parameters and learned that we do NOT charge a late fee. Based on this, I do not believe that we need to comply with the 21 day requirement.

The CCA says that creditors will be required to adopt reasonable procedures designed to ensure that periodic statements issued in connection with all Regulation Z-covered open-end accounts are mailed or delivered to consumers not later than 21 days BEFORE THE PAYMENT DUE DATE.

The Periodic Statement Requirements for Non-HELOCS states, "A creditor must provide the DUE DATE for a payment IF A LATE CHARGE OR PENALTY RATE MAY BE IMPOSED.”

My interpretation of this is that since we do not charge a late fee, we are not required to provide a due date. If we aren’t required to provide a due date, then we would not be required to comply with the 21 day requirement.

Is my thinking correct?"

So now all I need to do is find out if we report to credit bureas.
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#1222615 - 07/24/09 10:59 PM Re: Credit Card Reform Act/OE Loans MHuff
Dolly Nugent Offline
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Can you tell us who did this presentation? I need to know, as this may impact our bank. smile
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#1222776 - 07/27/09 03:00 PM Re: Credit Card Reform Act/OE Loans Dolly Nugent
MHuff Offline
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It was a Fiserv communication review.

Another question I have is if grace days are to be included in the 21-day period, or if they are in addition to it. We do not have credit cards, but we do have HELOCs.
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#1222795 - 07/27/09 03:24 PM Re: Credit Card Reform Act/OE Loans MHuff
#Just Jay Offline
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My understanding is that depends on what you do with your grace days... if the loan continues to accrue interest, or is mandated by the state (yeah for WI Consumer Act), then they cannot be counted.
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#1222843 - 07/27/09 04:23 PM Re: Credit Card Reform Act/OE Loans #Just Jay
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Okay, trying to understand. I don't know how we missed this we thought it was only Credit Cards! Boy oh boy oh boy!

Can anyone tell me if this is just new open-ended loans after 8/20/09 or does it apply to existing loans billed on or after 8/20/09?

I believe I read for all existing but want to make sure I didn't mis-interpret this.

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#1222918 - 07/27/09 06:24 PM Re: Credit Card Reform Act/OE Loans ComplyWithMeToo
pacar Offline
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Need a quick clarification:

Currently, we mail HELOC Billing statements on the last day of the month. Payments are due on the 15th. Payments can be accepted until the 25th of the month without a late charge. If, however, the payment is after the 25th, the late charge will apply.

Because we have a grace period included, and because that grace period pushes the payment date to the 25th, we DO NOT have to change our specs or anything.

Correct? Or am I misinterpreting this? I have read and re-read this message thread so much my head is spinning...

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#1222936 - 07/27/09 06:50 PM Re: Credit Card Reform Act/OE Loans pacar
Dan Persfull Offline
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The grace period does not push the due date to the 25th. The payment is contractually due on the 15th. You just can't assess a late charge unless the payment is paid after the 25th.
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#1222940 - 07/27/09 06:56 PM Re: Credit Card Reform Act/OE Loans Dan Persfull
pacar Offline
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So, since we inform them that the late charge would apply after the 25th, we're OK...

Can it really be that easy?!?

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#1222992 - 07/27/09 08:04 PM Re: Credit Card Reform Act/OE Loans pacar
MHuff Offline
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We will be pushing our HELOC due date to the 25th (statements are mailed on the 1st), with the 10-day grace period to follow.

Are we required to send the 15-day written notice?
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#1222995 - 07/27/09 08:09 PM Re: Credit Card Reform Act/OE Loans MHuff
pacar Offline
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I just had a conversation with our vendor. He made an excellent point (and it was quite a "duh" moment for me...):

If we change the due dates on the HELOC's, we're going to have contractual issues to deal with (not to mention more account maintenance). The easier alternative is simply to have our billing date be earlier. So if we move our billing date and mail statements on the 23rd, we can keep the due date at the 15th and not encounter so much maintenance.

Is anyone else going down this path, or are most of you changing the due dates?

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#1223018 - 07/27/09 08:43 PM Re: Credit Card Reform Act/OE Loans pacar
Dolly Nugent Offline
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Southern California
What are the contractual issues? Our HELOC agreement indicates, "Your payments will be due monthly. You agree to pay not less than the Minimum Payment on or before the due date indicated on your periodic billing statement." No date is mentioned.

Our plan is to move the due date and include a statement stuffer that says the following:

"IMPORTANT INFORMATION REGARDING YOUR HOME EQUITY LINE OF CREDIT

We are pleased to let you know that we are making changes to the payment due date on your home equity line of credit. This change is being made to give you more time to make your payment. Beginning with your August statement, you will have an additional 10 days to submit your payment. Your due date will appear on your statement."
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#1223027 - 07/27/09 08:53 PM Re: Credit Card Reform Act/OE Loans Dolly Nugent
pacar Offline
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Our old software actually defines the payment date (we're transitioning to a new platform in the middle of all of this that has built in language like yours, Dolly).

Do you have a grace period before a late fee is imposed? (I can't recall if you posted that previously or not)

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#1223037 - 07/27/09 09:06 PM Re: Credit Card Reform Act/OE Loans pacar
Dolly Nugent Offline
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Southern California
Our software has a field to indicate how many days from the statement date to the due date. I guess everyone needs to know how their core system works.

Yes, we have a grace period of 10 days on our HELOC. smile
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#1223068 - 07/27/09 10:01 PM Re: Credit Card Reform Act/OE Loans Dolly Nugent
complygirl Offline
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Is anyone having to make adjustments to the Right to Cure Notice days or HUD Notice days because of these new rules? Just curious...we're trying to determine if we need to make such changes.

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#1223103 - 07/28/09 01:35 AM Re: Credit Card Reform Act/OE Loans pacar
#Just Jay Offline
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Originally Posted By: pacar
I just had a conversation with our vendor. He made an excellent point (and it was quite a "duh" moment for me...):

If we change the due dates on the HELOC's, we're going to have contractual issues to deal with (not to mention more account maintenance). The easier alternative is simply to have our billing date be earlier. So if we move our billing date and mail statements on the 23rd, we can keep the due date at the 15th and not encounter so much maintenance.

Is anyone else going down this path, or are most of you changing the due dates?


I am not the only one thinking this!! yeah!!!

We are not changing due dates either, since they are due daily (30 days from loan closing).

We are just adjusting our lead time from 10 days to 25 (plus the 10 days 'grace' mandated by the state mad ). We will have to do some manual billing, but this seems far easier than adjusting due dates.

Unless I am missing something confused

By the way, in listening in on a conference call with our vendor today as well, I am getting the impression that many people do not understand the definition of a 'grace period' in this new legislation. It has some very clear meanings, and limitations that many of us have not traitionally associated with a grace period. I encourage everyone to review the definition and the examples given to determine if they have a true 'grace period' in place.

Also, in the same call with the vendor, the vendor was making the some statements that the examiners are not going to be prepared to review for this, that they will most likely not be concerned if we have missed the dealine as long as we have a plan in place to comply within the next cycle or two. I found this to be very dangerous, not only on the part of the vendor, but for anyone thinking this as well. My understanding is, per the rule and opinions, that if you are not ready to comply on the 20th of August your only recourse is to refrain from any negative penalties being assessed against your customer, or reporting them negative in any fashion. Maybe just me, but I do not see any wiggle room in this.
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#1223201 - 07/28/09 01:52 PM Re: Credit Card Reform Act/OE Loans #Just Jay
Janet Munns Offline
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We are just changing the billing date and leaving the due date the same. This will cause an overlap due to the grace period but this is the easiest of the choices.
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#1223217 - 07/28/09 02:04 PM Re: Credit Card Reform Act/OE Loans Janet Munns
pacar Offline
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I think the biggest advantage to changing the due date is the ability to "sell" it to your customers as a nice thing you are doing for them. Dolly's sample language (post 1223018) really gives it a nice spin. If we simply move the billing notice creation date to an earlier date without changing the due date, it will be harder to "spin it" like that.

Also, our billing statements contain an entire month of transactions (since we cut all bills on the last day of the month). If we bump up the creation date, we'll no longer have a calendar month on the statement.

We're having some discussions on this at our bank to determine which option would be the best choice. (How about neither?!? sigh...)

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#1223220 - 07/28/09 02:09 PM Re: Credit Card Reform Act/OE Loans pacar
#Just Jay Offline
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Cheeseheadland
I respectfully disagree about the 'spin'... the fact is it arriving in the mail so early with a blurb should be a positive enough spin.

I do understand you calendar month history point though. For us not a big deal since ours cut daily.
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#1223227 - 07/28/09 02:14 PM Re: Credit Card Reform Act/OE Loans #Just Jay
pacar Offline
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Originally Posted By: Just Jay
I respectfully disagree about the 'spin'... the fact is it arriving in the mail so early with a blurb should be a positive enough spin.


Very true. I'm just trying to come up with some nice language to include in the statement and not really coming up with anything that sounds so nice!

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#1223238 - 07/28/09 02:20 PM Re: Credit Card Reform Act/OE Loans pacar
#Just Jay Offline
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I would refrain from opening with "Due to Obama's Credit Card Act..." laugh
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#1223378 - 07/28/09 04:01 PM Re: Credit Card Reform Act/OE Loans #Just Jay
MHuff Offline
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Since this falls under Reg Z, commercial LOCs are not affected, correct?
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#1223426 - 07/28/09 04:42 PM Re: Credit Card Reform Act/OE Loans pacar
4newt Offline
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East Texas
Originally Posted By: pacar
... our billing statements contain an entire month of transactions (since we cut all bills on the last day of the month). If we bump up the creation date, we'll no longer have a calendar month on the statement.

We're having some discussions on this at our bank to determine which option would be the best choice. (How about neither?!? sigh...)


We are having the same issues. We even have some older loans that specifically list the payment due date. Therefore, we think we are going to have to retype those loans using our current loan docs. While our newer loans do not list a specific due date on the loan docs, defering to the statements (billing notices). Normally, all loans under this type can be changed as a whole. If anyone has a better idea on how to handle this, please share!!!

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#1223537 - 07/28/09 06:33 PM Re: Credit Card Reform Act/OE Loans 4newt
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The bank has statements coming up for Aug as follows:
Aug 1---- payment due date Aug 15*
Aug 4-----payment Aug 19*
Aug 16----payment due date Sept 1*
*ALL have late fees assessed after 15 days if not paid.

These statements drop before the 8-20-09 effective date.
What needs to be done with these statements or do we need to make our changes beginning with the September 1, 2009 statements?

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#1223645 - 07/28/09 08:06 PM Re: Credit Card Reform Act/OE Loans wanted
Deena Offline
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The 21 day requirement is effective for statements mailed on or after 8/20, so (assuming the statements you listed above are mailed prior to that) you wouldn't need to make the changes yet.
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