Credit Card Act and The Path to Regulation Z Compliance

CBS assumes that each customer has received and read the various articles from CUNA Mutual Group regarding the “Viable Alternatives” to the August 20, 2009 requirements. Click Here to read the article, “The Path to Regulation Z Compliance.”

Each of the viable alternatives requires a monthly member statement for all open-end loans. Meanwhile, CBS has already begun the necessary programming to the CAMS-ii member statement programs. These changes, which will be deployed by the August 31, 2009 period-end, will include a next payment due date on the members’ statements.

Note: The aforementioned programming changes apply only to the CAMS-ii member statement programs. CBS will not make any changes to the old-style CAMS member statement programs. If your credit union has not converted to the CAMS-ii member statements, you must contact CBS (via support@camsbycbs.com) immediately.

Additionally, full compliance with Alternative 1 will require your credit union to analyze the loans with a payment frequency less than monthly and analyze the loans with a monthly due date inside twenty-one days. For credit unions that have loans with a payment frequency less than monthly, remember that CAMS-ii has a “payroll hold” capability that helps ensure that funds are frozen and released when the loan payment becomes due.

Based upon the analytical findings and needs of the credit unions, CBS may develop some conversion programs to assist with the loan frequencies and due dates. The full scope of this development cannot be determined at this time as each credit union may have different requirements.

After CBS’ discussions with CUNA Mutual Group, Alternative 2 appears to be more complex, time consuming, and potentially more expensive for the credit union. Also, CAMS-ii currently does not support creating/sending statements more frequently than once a month and on a period-ending date other than a calendar month-end. CBS believes that Alternative 2 is the least desirable of the options.

To help alleviate/reduce the additional cost of monthly statements, this may be an ideal time to encourage members who use Internet Branching to sign up for electronic document delivery. Also, remember that the CAMS-ii system has an electronic document delivery solution (e-Delivery) for those members who use the Internet but are not registered for Internet Branching.

IRA Certificate Advisory

We are issuing this advisory because some credit unions have notified us that some IRA certificates did not renew as they should. After researching the issues, we found that in these cases that the Automatically Renew Upon Maturity check box had not been selected in the IRA Certificate Setup. If the Automatically Renew Upon Maturity check box is not selected, this indicates to the system that the certificate has matured and the credit union is going to take some 'manual' action.

The year-end release for 2008 (CAMS-ii version 2.8.0) created a New IRA Account Defaults section in the Control-IRAs parameters (Back Office > Standard > Parameters > Control-IRAs) so credit unions could establish default values for the New IRA Certificate Setup. These default values appear when new IRA certificates are opened so that some of these critical items are not missed. After the release installed, credit unions had to set up their respective defaults.

If you have not set the New IRA Account default values, we encourage you to do so. When you choose the default settings that you want to use, they will appear every time that you set up a new IRA certificate. In exceptional cases, you can still choose the other, non-default settings in the New IRA Certificate Setup screen. Therefore, you are not limited to only those default settings.

CAMS-ii also produces a monthly Certificate Maturity Report (CU$MATURE) that shows any IRA certificates that have matured or are about to mature. This can can help you identify any IRA certificates that are nearing maturity or have matured that should have been set for automatic renewal.

Please address any questions on this advisory to the CBS Issue Tracking System.