CUNA, NAFCU Offer Input On Changes To RegZ

WASHINGTON - (03/30/05)–Both CUNA and NAFCU have providedcomment to the Federal Reserve with suggestions on how it canimprove and update its Regulation Z (Truth in Lending).CUNA’s 27-page comment letter urges the Fed to make the ruleeasier for consumers to understand, and less burdensome for creditunions to apply and was developed by a group of credit unions thatwere assembled for that purpose. Among CUNA’s suggestions wasto eliminate the usage of Average Percentage Yield, which currentlyallows for blending in additional fees or charges and instead useonly the actual interest charged with a separate disclosure forother fees and charges. NAFCU, meanwhile, said it believes that thecurrent format of account-opening disclosures is sufficient giventhe volume of information needed to be expressed to a consumer."Before any changes to the format of the disclosures can beeffectuated, it appears necessary to revise or condense the contentof the disclosures themselves," the trade group said. It did notethat it believes that a fee should not be classified as a financecharge based on whether the fee affects the amount of creditavailable. To classify a finance charge in this manner may not givea consumer meaningful information. NAFCU suggested that a morestraightforward disclosure of the cost of credit with an actualdollar amount per periodic billing cycle of incurred interest andan actual dollar amount of incurred fees will ameliorate theseconcerns.