Proposed Regulations

Congress enacted TILA to regulate certain credit practices and promote the informed use of consumer credit by requiring uniform disclosures about its costs and terms. Under TILA section 128, creditors must provide TILA disclosures to consumers in writing before consummation of certain closed-end credit transactions. Exemptions are provided for a limited number of transactions.

The rule requires financial institutions to adopt reasonable procedures to ensure that periodic statements are mailed to consumers at least 21 days before the payment is due. Notably, this 21 day requirement applies to credit cards and “all open-end consumer credit plans.”

The NACHA Operating Rules (Rules) currently require credit unions to make adjustment entries within 60 days after the settlement date. This has proven difficult to meet in some cases where a claim of unauthorized entry is made within the allowable period of 60 days from the transmittal showing the unauthorized transaction.

On October 18, 2001, the NCUA Board approved an advance notice of proposed rulemaking (ANPR) on part 703, the regulation governing federal credit union investments. NCUA is soliciting public comment on whether it should revise its investment rules and has identified provisions that may warrant clarification or revision.

The Federal Reserve Board has issued interim final rules establishing standards for the electronic delivery of disclosures under Regulations B (Equal Credit Opportunity), E (Electronic Fund Transfers), M (Consumer Leasing), Z (Truth in Lending), and DD (Truth in Savings).

On October 19, 2000, the NCUA Board unanimously approved a proposed Interpretive Ruling and Policy Statement (IRPS) on the Central Liquidity Facility advance policy. The policy statement is intended to clarify the role of the CLF and the circumstances in which the CLF will approve a request for an advance

The Financial Accounting Standards Board (FASB) has released for public comment its preliminary views on the reporting at fair value of financial instruments and certain related assets and liabilities.

NACHA Rules Work Group #11, Authorization Issues, recently issued a request for comment on a proposed rule amendment that would modify the authorization requirements for the collection of service fees relating to Re-presented Check (RCK) entries.

On June 20, 2002, the NCUA Board of Directors unanimously approved a proposed rule that seeks comments on several issues in Part 704, the rule governing corporate credit unions (corporates). The proposed rule follows two earlier Advance Notices of Proposed Rulemaking (ANPRs), issued in 1999 and 2000, and a proposed rule issued September 21, 2001 seeking similar information.

On February 7, 2002, the Federal Reserve Board published proposed amendments to Regulation C, which implements the Home Mortgage Disclosure Act. The Board requests public comment on: (1) the appropriate threshold for collecting price data on higher cost loans; (2) a proposal to require lenders to ask telephone applicants their race, ethnicity, and sex; and (3) a proposal to require lenders to report lien status for applications and originated loans.

Recently, NCUA published proposed rules regarding share insurance, which are intended to simplify and clarify current regulations and provide parity with the deposit insurance rules of the Federal Deposit Insurance Corporation.

The Internal Revenue Service (IRS) has issued a notice of proposed rulemaking containing proposed amendments to income tax regulations promulgated under section 401(a) of the Internal Revenue Code.

Recently, the National Credit Union Administration (NCUA) published a request for comments and suggestions on ways it can identify and reduce regulatory burdens with respect to share account – deposit relationships and miscellaneous consumer rules that may be outdated, unnecessary, or unduly burdensome.

Recently, the Federal Reserve Board (Board) proposed guidance on overdraft protection programs, amendments to Regulation DD, and additions to the staff commentary to the Regulation DD. Both the guidance and the amendments are concerned with the current disclosures and practices by financial institutions with respect to the treatment of overdrafts.

Recently, NACHA—The Electronics Payments Association (NACHA) issued a proposed rule to modify the provisions of the Operating Rules to allow unauthorized entries that are transmitted to consumer accounts and incorrectly bear corporate Standard Entry Class (SEC) Codes (CCD, CTX, or CBR) to be returned within a sixty-day time frame.

Recently, the National Credit Union Administration (NCUA) approved an interim final rule to amend 12 C.F.R. Part 707 and its official staff interpretation. Part 707 implements the Truth in Savings Act (TISA).

The National Credit Union Administration (NCUA) has published for comment proposed changes to the rule on uninsured secondary capital accounts. The proposed changes include a new subsection allowing low- income designated credit unions to redeem discounted secondary capital under certain conditions, and eliminating the existing restriction on redemption in section 701.34(b).

National Credit Union Administration (NCUA) and other financial regulators, issued a proposed advisory regarding the unsafe and unsound use of limitation of liability provisions and certain alternative dispute resolutions in external audit engagement letters. The proposal advises the credit union's board of directors, audit committee and management that they should not enter any agreement that contains external auditor limitation of liability provisions with respect to financial statement audits.

The Board of Governors of the Federal Reserve System (Board) has issued an advance notice of proposed rulemaking to amend 12 C.F.R. § 226, “Regulation Z,” which implements the Truth in Lending Act. The proposal seeks to begin a review of open-end credit rules in the following three categories: (1) the format of open-end credit disclosures; (2) the content of the disclosures; and (3) the substantive protections provided by the regulation.