Everything you said is correct, including the fact that the cosigner, guarantor, or joint applicant must be at least 21 and must be qualified based on the ability to pay criteria.

So the only way an account can have two young consumers (let's say a married couple that are both 18), would be for the primary applicant to have qualified on their own. If the primary does qualify on their own, the card issuer can then include the co-applicant's information in the Ability to Pay process to determine if that would impact the credit line approved. BUT a credit line increase can not be provided for accounts with young consumers only (credit line increase only provided for those accounts with co-apps that are 21 or older and approved by the co-app)

I think I am answering myself in regard to the accounts with two young consumers - a credit line increase can not be made to a young consumer account that was opened pursuant to (b)(1)(ii) unless the co-applicant that is at least 21 agrees (granted the young consumer is still not 21). Since a credit card account was opened with two young consumers (obviously the primary young consumer qualified independently), then it was NOT opened pursuant to (b)(1)(ii) - which requires the co-app to be 21 or older. A credit line increase can be provided to those accounts with two young consumers. PLEASE someone correct me if my rambling is wrong.

If the underage consumer wants a cr line increase and qualified by himself (and qualifies for the increase by himself) there is no cosigner, co-borrower or guarantor involved.

Thanks for the help guys. I appreciate you! :o)

Sorry, back on the young consumer issue Two concerns:
1.) If the application allows for joint income, how do you evaluate a young consumer individually to determine if the co-applicant is needed? Ex. Two young consumers and joint income is provided. Based on Ability To Pay, income is to be considered. Based on Young Consumers, must determine if primary can qualify on their own or if a co-app of 21 or older is needed. Can't use the joint income to evaluate independent ability to repay?

2.)In regards to two 'young' applicants that apply for an account, if the first 'young' applicant does not qualify on their own and we do an automatic check to determine if the age of the co-applicant is 21 or older (and it is not because these are two 'young' applicants) - How does the Adverse Action Notice work? Do you send a notice to the first/primary 'young' applicant and explain the reasons why they did not qualify was based on their individual reasons AND a co-applicant that is at least 21 is required?

I have a question about the ability to repay. Does that mean that we need to verify the income that is supplied by the appliccant for a credit card? I read it taht we are required to get an income amount from the applicant, but not necessarily have to require proof of the income.

I can't seem to find a response to this other than the reference to new disclosures at renewal. I have been getting new card agreements from some of the big issuers and am wondering if we are required to do so. We have only fixed-rate cards, and are eliminating the over limit fee and our penalty rate. Since those are positives, we are considering putting a notice in with the monthly statements. Our question is whether or not we have to disclose the new payment application rules (which is a change for us) since they don't seem to be required to be disclosed at account opening. Is the payment allocation method something that will need to be disclosed going forward?

We informed of the new payment allocation process in our inserts along with other items that were in the customer's favor (and really they couldn't opt out) - we did not add the paymnet allocation process in the agreement, as I do not think it is required.

Any takers on the young consumers??

I just listened to the two hour BOL Gigantic Reg Z changes Webex and they did a wonderful job summarizing this mess. Hats off to Marybeth and Jack.

But I'm walking away still not sure if the new account opening disclosures and periodic statement format go into effect on 02/22 for non-HELOC, consumer, over draft lines of credit and other non-HELOC consumer lines of credit.

And if so, am I the only one who's not prepared?

Please Help!!!

No, you aren't the only one who isn't prepared. I just sat through the webinar as well, and am still unclear if we need to make statement formatting changes for our other open-end (non-home secured) lines of credit.

.....I'm studying.....had to stop.....was going to post, but I noticed two of you already have. I have the same question. When are the G-10, G-17 and G-18 Models mandatory? The forms are not mentioned in the cool chart (on page 5) and are not "grayed" (which was how the 2-22 changes are indicated in the materials). Help, please.

I hope I'm right, but I have them scheduled for July!

In fact, Alphabet soup shows it effective 2/22, mandatory 7-1-2010...I feel better now.

Ok...the new periodic statement (G-18) is mandatory 2-22 because section 226.7(b)(11-13) is mandatory on 2-22-10.

So does the new 02/22 mandatory statement format include non-credit card, open-end consumer overdraft lines of credit?

And, is the new account opening disclosure mandatory for the above also on 02/22?

Sorry, still confused.

Confused as well.....the handy chart on page 5 indicates that 226.7(b)....periodic statement rules....only apply to Credit Cards. But for 226.7(b)(13), there is a check in every box.....applies to all four categories of loans. Why didn't they merely put an "x" in column 1 (applies to all open-end consumer credit plans)? But the statement Form (G-18) appears to only apply to credit cards........I think.

I don't know about the account opening disclosure....am wondering when that's applicable as well!

226.7(b)(11)Cr card info on periodic stmts must include due date and amount of any late payment fee and increased periodic rate goes into effect 2-22. 226.7(b)(12) min pmt warning, repay est & repay discl also go into effect 2-22 for cr card stmts.

The remaining format and content req for stmts go into effect in July.

Ahou, so is it your understanding that unless we offer credit cards, we have no changes to periodic statements that would impact our other open-end products on 02/22?

Any thoughts on the account opening disclosure?

That's interesting because the program materials for yesterday's seminar have everything that's mandatory on 2-22 shaded gray. All of the periodic statement requirements are shaded in gray:
226.7(b)(11)(i)(11)
226.7(b)(12)(i)& (F)(1)-(F)(2)
226.7(b)(12)(ii)(iii)(iv)(v)
226.7(b)(13)
The Fed document states same (docket R-1370 page 1). What am I missing?

So I'm not the only confused and frustrated one.

A large bank mailed out a letter dated 2/1/2010 that states "in response to a regulatory change, your line of credit account access using an ATM/Check Card will be removed Feb 22. this means that you will no longer be able to use an AMT machine to withdraw cash from your line of credit or transfer funds from your line of credit to another account. This change will not impact your home equity line of credit. Are they just being cautious or is this provision in the law?

[Ahou, so is it your understanding that unless we offer credit cards, we have no changes to periodic statements that would impact our other open-end products on 02/22?

Any thoughts on the account opening disclosure?]

The only periodic stmt requirements for Feb for non-cr cards is timing requirements/grace period expiration date, assuming you don't offer deferred interest.

Account opening disclosure tabular format is effective in Jul.

Spring, do you still feel that some of the recent posts conflict with the information provided at yesterday's webex?

The final rules indicate that when considering ability to repay, the issuer to consider debt to income, debt to assets or residual income. When considering income and assets, the rule indicates that the issuer would be permitted to rely on information provided by the consumer and in the credit report.The final rule further defines this to indicate that issuer may make a reasonable estimate of the consumer's income or assets based on "empirically derived, demonstrably and statistically sound models". Many of the credit bureaus are providing this as an option where validation of income and employment is done and an answer returned with the credit report. There is obviously a cost to use these services.

From everything I can read, you would either need to use one of these methods to test the reasonableness of the income/assets or you would need to verify the income via paystubs, tax returns, etc.

Regarding the Ability to Pay, yes that is the understanding we have as well. In the proposed rules it did not provide we could use a income estimator (empirically derived, demonstrably and statistically sound model). This would have impacted any pre-approved offers and reliance on 'old' information in line increase evaluations. You don't have to verify income but you would be at the mercy of the customer for providing realistic information for income. The final rules allowing this model was one of the only forms of relief provided for us.