I do not agree. I do not think your charging a late fee or reporting to the credit bureau changes anything. The Commentary provides that the payment due date "is the due date according to the legal obligation between the parties - not the end of the additional period of time." If you wish to provide a ‘grace period' (or courtesy period) following the due date before a late fee is assessed (or are required to do so by state law) you cannot add that period to the mailing date to determine when the 21-day period expires: you must still allow the full 21 days between mailing the statement and the contractual date the payment is due.

Also, Reg Z defines open-end line of credit as:

Open-end credit means consumer credit extended by a creditor under a plan in which:
(i) The creditor reasonably contemplates repeated transactions;
(ii) The creditor may impose a finance charge from time to time on an outstanding unpaid balance; and
(iii) The amount of credit that may be extended to the consumer during the term of the plan (up to any limit set by the creditor) is generally made available to the extent that any outstanding balance is repaid.

If your Ready Reserve meets this definition then I believe it is covered by section 106 of the CARD Act and the 21-day period applies. Unless and until we get clarification from the Fed contradicting this, you should proceed with caution.

I have been assured that it will cut and be in the mail 21 days prior to the due date.

"Can a customer request the setup of an automatic draft from their DDA account before the due date of the 25th."

They can setup it up on any day on which you will allow and can accommodate.

Thanks for the reply. I may be getting into more semantics here than necessay but in these cases, the payment due date on the system is what the customer requested not the 24 day window. Payments will automatically come out on this date (if a payment hasn't already been made). Without something in writing from the customer to prove what they want (some the accounts are old and good records weren't maintained), how can I prove compliance on these 100 or so accounts?

I was considering changing everyone to the 24 days, sending them a letter about the change and indicating if they want a different payment due date then they need to request it in writing. Your response seems to indicate I'm ok - which would be great, but I have no documentation of the customers wishes. Our loan agreements just say the payment due date is what's listed on the periodic statement.