From Kathy Thompson:

As CUNA’s SVP for Compliance, credit unions pay me to worry with them about the compliance burden they are facing – and I don’t need to tell you that it’s only getting worse.  Based on all the questions we are getting on Reg E’s overdraft restrictions that become effective July 1, credit unions are very focused on how to address the restrictions on charging fees for overdrafts created by ATM and one-time debit transactions.

But I’m worried that credit unions aren’t focusing adequate time and resources on the other regulation effective July 1 – the comprehensive Reg Z changes on open-end credit rules.  Yes, your data processor and forms provider can make many of the compliance changes for you.  But if your credit union has a “multi-featured, open-end lending” plan, such as LoanLiner, you are undoubtedly going to have to make some important changes in your policies and procedures.  The Fed proposed to kill off “MFOEL” three years ago by saying every sub-account had to be self-replenishing.  CUNA and CUNA Mutual convinced the Fed to reverse itself – but there was a price to be paid on new compliance steps.

In today’s NewsWatch, my colleague Mike McLain writes about “Five UnTruths about Truth in Lending,” where he briefly explains what actions you need to take to comply by July 1.  Note particularly, “Untruth #2,” where he talks about routinely pulling credit reports, and “Untruth #3” on cautions on making car loans.

CUNA is offering another webinar on May 25  on this subject, just to make sure credit unions understand the new requirements.  Please don’t make me worried on July 2 that credit unions aren’t on top of this – the Truth in Lending Act’s liability provisions (and the starving lawyers out there looking for class-action lawsuits) make me worried enough.

Kathy Thompson is the SVP for Compliance & Legislative Analysis for the Credit Union National Association.