The rules made significant changes to how credit unions and other financial institutions were required to support
open-end credit. So much that the NCUA issued a letter to federal credit unions advising them to review their policies and procedures to ensure they were in compliance with changes to Regulation Z that became effective July 1, 2010.
In April 2005 the Bankruptcy Act was enacted, which contains several amendments to TILA, including provisions requiring new disclosures for
open-end credit accounts.
However, over the past 20 years,
open-end credit has become widely available to households, initially in the form of credit cards (Canner 1988).
The complaint sufficiently pleads facts that state the company violated the Virginia Consumer Finance Act, either as an unlicensed consumer finance lender or as an
open-end credit plan lender.
When subaccounts continue to meet the revolving and replenishing criteria for
open-end credit, the credit union can check the member's credit rating when first establishing the account and again when they raise the credit limit.
In a typical
open-end credit sale, the contractor completes a credit slip and credit charge application with the consumer when making the sale.
While lawmakers and aides didn't intend to include the provision on
open-end credit in the legislation, it may not be simple to remove, said NAFCU Director of Legislative Affairs Brad Thaler.
This effort will be undertaken in connection with the Board's periodic review of its regulations; an advance notice of proposed rulemaking is expected to be issued later this year under Regulation Z, focused on disclosures for
open-end credit accounts.
The Federal Reserve Board has opined to HUD that the HECM program is
open-end credit because the line of credit feature may be accessed at any time and, to the extent the borrower repays the outstanding balance, the borrower can re-borrow additional funds.
The league also encouraged credit unions to write to the Federal Reserve about the difficulty of complying with the notification rules on
open-end credit accounts by the Aug.
The regulation carefully defines
open-end credit as "consumer credit extended 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 the outstanding balance is repaid" (Regulation Z 226.2(a)(10)).
Albin wrote the letter to Jennifer Chadwick, a Rochester, N.Y, lawyer who represents an unnamed federal credit union that doesn't impose late fees on a member's
open-end credit account until five days after the payment is due.
