Has anyone read the ABA Newbytes this morning? Thoughts?


Issue: Section 232.8(e) provides that it is unlawful if a creditor “uses a check or other method of access to a deposit, savings, or other account maintained by the covered borrower,” subject to certain exceptions. The regulation thus appears to prevent creditors from accessing accounts by accepting payments from covered borrowers by check or via an electronic fund transfer (as defined in Regulation E, 12 C.F.R. pt. 1005), including, for example, via ACH debits. We do not believe this result was intended because it will be harmful to covered borrowers, particularly those deployed overseas, who will not be able to use all available payment options.

That was my question when I first read the rule last year, because I read it the same way ABA did. I am glad they are trying to get clarification on it. While we don't have a large military presence in my area, I know it will affect other FIs and how they can offer repayment options on credit products.

I did read it and hope for clarification.

Entities have gotten together and are trying to get clarification on several areas. The following site has details on sections that need clarification. I found this helpful.

http://www.aba.com/Compliance/Documents/MLA-ProposedSolutions2016Apr.pdf

The federal register doesn't explain this at all. I can not seem to even find the proposed rule that explains what it means. It only states that it has accepted the rule as proposed. Do you think it has anything to do with the right of setoff? If a customer defaults can we access the customers accounts per the right of setoff verbiage on our promissory note. I am super confused about this.