PRINCE GEORGE, Va. — Some credit unions are leaning on free programming provided by processing vendors in order to comply with the "hugely cumbersome" Credit CARD Act - but others are taking matters into their own hands.
Although Fort Lee FCU here could have paid its core vendor to convert open-end loan data, the $135-million CU decided to use existing reporting tools and spreadsheets to help comply with the Aug. 20 deadline set by the Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act), according to Dwayne Sneade, IT systems administrator.
"We cut costs by bringing the conversion in-house," Sneade explained. "We pulled a report of all loan types that fell under the new regulation. Then, using 'if-then-else' statements, we converted old due dates, payment frequency and total payment due" fields into compliance. About 3,700 of 5,400 total loan accounts at Fort Lee were impacted by CARD, he said.
Too Much to Do in Too Little Time
Merging the converted spreadsheet data into the loan database would have taken too much time, said Sneade. Instead, the CU sent the converted data in three sets to its core vendor, which instantly merged the data for a fee, said Sneade. Quality assurance would have been improved had the data been done in one set, he added.
FORUM CU, Indianapolis, Ind., had no choice but to set aside other projects and develop custom loan statements "from scratch" per the CARD Act, as its vendor didn't offer a solution in time for the compliance deadline, said Doug True, SVP-technovation at the $1-billion CU.
"We created a loan statement that could be delivered electronically, for members subscribed to e-statements, and in paper format for the traditionalists," said True. The statement includes compliant data, along with a loan coupon and payment instructions, he said. Instead of moving payment due dates to comply with the CARD Act, FORUM is sending payment notices 28 days in advance.
Meanwhile, IEC FCU in Springfield, Ill., is relying on the processing vendor to keep its credit card program in compliance, said Tootie Holmes, manager at the $11-million CU. The same is true for Employees CU (ECU) in Dallas, according to Vonda Burkhart, VP and CFO at the $48-million CU. ECU's core processor "did a good job in writing programs that would convert our open-end loans over to a monthly pay due date and recalculated the loan payments automatically," Burkhart said. The core processor and the CU's credit card processor "handled everything" at no additional charge, for what was a "hugely cumbersome" process, she said.
But credit unions that are looking to processing vendors for CARD help may need to insist on personal attention. Vendors can't provide a one-size-fits-all solution, according to Share One, a Memphis, Tenn.-based core processor CUSO.
Making Mass Changes
"We have had many conversations with each client credit union and no two have the same needs," said Daryl Tanner, Share One CEO. "In some cases we are making mass changes to payment dates and partial payments, and for others, we are doing very little."
Not all Share One clients are rushing to comply, Tanner continued. "A few seem preoccupied and aren't giving this very much attention. One or two woke up and asked us to do something 'right now.' Some won't be impacted."
Share One isn't charging clients for CARD compliance, except in cases requiring custom programming, he said.
At a Share One blog, Jerry Williams, CIO at $1.2-billion Eglin FCU of Fort Walton Beach, Fla., describes his "short-term" approach to "avoid non-compliance" with CARD: "We don't want to change payment days, statement 'freqs' or courtesy periods until the dust settles on this mess. For now, I've written an SQL script that advances the next payment date on loans that are about to go one more month past due by one month."
