Credit cards and the member’s right to reject

A compliance officer sits at her desk dutifully reviewing a new policy. She is calm and relaxed – it’s almost time to go home for the day and her favorite song just came on the radio that sits in the corner of her office. Then, a member of the credit union’s lending staff knocks on her door. “I have a credit card question for you,” he says. Suddenly, calm and relaxed goes out the window and she starts to feel a little like this:

Credit card compliance – the three little words that strike fear in even the most seasoned compliance officer. In an effort to make these issues less of a nightmare, NAFCU has written numerous articles and blogs on credit card compliance. Today’s blog provides a refresher on yet another one of these rules: the right to reject.

Section 1026.9(c)(2)(iv)(B) explains that members have the right to reject any “significant change in account terms.” This NAFCU blog discusses which terms are significant, but generally, terms required to be disclosed at account opening are considered significant terms. This includes, among other things, the minimum interest charge, transaction fees, late payment fees and over-the-limit fees. When a credit union makes changes to these fees, the member has the right to reject the change. If a member does reject the change, credit unions are permitted to terminate or suspend credit privileges, provided the credit card agreement gives the credit union the authority to do so.

 

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