Have you Registered Yet??
Make sure to get your registration in soon for the upcoming Credit Union Professionals Forum scheduled for Fargo, North Dakota, on Tuesday, August 16.
Each year credit union professionals from North Dakota and South Dakota gather to discuss and learn from each other on a variety of topics. This event is open to all credit union professionals, the only requirement is a willingness to ask questions and engage in conversation with others.
This event is driven by you, the attendee, and so far we have some great topics and issues that we will be talking about in Fargo including – retention strategies; grants; tracking online/digital branch growth/success; ways to increase net income; future of overdraft fee income; lending; CECL; exam issues; and much much more!
Don’t miss your opportunity to learn from your fellow credit union peers. This FREE event is the perfect, casual setting to gain an understanding of the pressing topics and opportunities your credit union faces and issues relevant to your credit union.
Registration is required so we can be sure to accommodate everyone joining us – lunch is on us and be sure to stay for the social following the forum (all free).
Free Flood Insurance Webinar
Don’t forget to register for the free interagency webinar next week – Flood Insurance Q&As, on Wednesday, July 27 at 1 PM (Central).
The federal financial regulatory agencies are hosting an interagency discussion of recent updates to the Interagency Questions and Answers Regarding Flood Insurance (Q&As), which were released on May 11, 2022.
Staff from the Board of Governors of the Federal Reserve System, Farm Credit Administration, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency will provide an overview of the revisions to the Q&As, which were updated to reflect significant changes to the federal flood insurance requirements in recent years.
We will follow the presentation with a questions-and-answers segment. Please send in questions via email in advance of the event to facilitate the Q&A segment.
Please register at this link - https://www.webcaster4.com/Webcast/Page/577/45801.
Compliance Reminder – Oral disclosure of APR.
Regulation Z, which implements the Truth in Lending Act, provides numerous disclosure do’s and do not’s. From an advertising perspective the requirements can be confusing as the regulation includes a lot of – if you say “this” then you must say “that”, but you must never say “that other thing” when stating “this.” That is a reminder article for another day – but until then be sure to check out the advertising channel in Infosight for handy checklists for advertising different loan products. Today’s article is a reminder of what can and can’t be said when someone calls the credit union and inquires about a loan rate – yes, there is a regulation that covers that too which is found under 12 CFR 1026.26 – Use of annual percentage rate in oral disclosures.
With regard to open-end credit, the regulation provides that in an oral response to a consumer's inquiry about the cost of open-end credit, only the annual percentage rate or rates shall be stated. The creditor may state periodic rates in addition to the required annual percentage rate, but it need not do so.
If the annual percentage rate for open-end credit cannot be determined in advance because there are finance charges other than a periodic rate, the corresponding annual percentage rate shall be stated, and other cost information may be given. As further explained in the commentary, “if the annual percentage rate is unknown because transaction charges, loan fees, or similar finance charges may be imposed, the creditor must give the corresponding annual percentage rate (that is, the periodic rate multiplied by the number of periods in a year, as described in §§1026.6(a)(1)(ii) and (b)(4)(i)(A) and 1026.7(a)(4) and (b)(4)). In such cases, the creditor may, but need not, also give the consumer information about other finance charges and other charges.”
With regard to closed-end credit, in an oral response to a consumer's inquiry about the cost of closed-end credit, only the annual percentage rate shall be stated. However, unlike rules for open-end credit, the creditor may state other annual or periodic rates that are applied to an unpaid balance, along with the required annual percentage rate. This rule permits disclosure of a simple interest rate, for example, but not an add-on, discount, or similar rate.
If the closed-end annual percentage rate cannot be determined in advance, the annual percentage rate for a sample transaction shall be stated, and other cost information for the consumer's specific transaction may be given. The Commentary notes, “If the creditor cannot give a precise annual percentage rate in its oral response because of variables in the transaction, it must give the annual percentage rate for a comparable sample transaction; in this case, other cost information may, but need not, be given. For example, the creditor may be unable to state a precise annual percentage rate for a mortgage loan without knowing the exact amount to be financed, the amount of loan fees or mortgage insurance premiums, or similar factors. In this situation, the creditor should state an annual percentage rate for a sample transaction; it may also provide information about the consumer's specific case, such as the contract interest rate, points, other finance charges, and other charges.”
As always, DakCU members may contact Amy Kleinschmit with any compliance related questions.
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