Recent Final Rule Analysis & Regulatory Comment Call

CUNA
June 5, 2009 | COMMENTS

Technical Changes to the FACT Act “Red Flags” and Affiliate Marketing Rules

The National Credit Union Administration, the Federal Trade Commission and the other financial institution agencies recently issued a final rule that makes technical corrections to the identity theft “red flags” and address discrepancy rules and to the affiliate marketing rules that were issued under the Fair and Accurate Credit Transactions Act.

The first link below provides more information about the “red flags” and address discrepancy rules, and the second link provides more information about the affiliate marketing rules:

1. http://www.cuna.org/reg_advocacy/member/download/finalanalysis_ftc_ncua_110207.pdf
2. http://www.cuna.org/reg_advocacy/member/analysis/ncua_ftc_110807.html

The agencies made several technical corrections to the identity theft “red flags” and address discrepancy final rules. These include a clarification that address discrepancy notices need only be provided by nationwide consumer reporting agencies.

The agencies made the following two corrections to the affiliate marketing rules:

• A model form that allows consumers to voluntarily opt-out of marketing by businesses and their affiliates was amended by inserting language in brackets that allows businesses to disclose the duration of any opt-out period.
• An additional provision in the instructions to the model forms to clarify that a person may add a disclosure to the forms that explains the treatment of opt-outs by joint consumers.

If you have any questions or need a copy of the final rule, please feel free to contact Senior Vice President & Deputy General Counsel Mary Dunn at mdunn@cuna.com or Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.com or by telephone at (800) 356-9655, extension 6736 or 6732. You may also access the rule here.

FTC Advance Notice of Proposed Rulemaking - Mortgage Acts and Practice

The Federal Trade Commission (FTC) has initiated two advance notice of proposed rulemaking (ANPR) with regard to mortgage loans. The purpose is to request and analyze comments in response to the ANPR for purposes of developing specific proposed rules in the future that would prohibit or restrict mortgage loan practices.

One ANPR addresses the activities that occur throughout the mortgage loan process. This includes advertising, marketing, origination, appraisals, and loan servicing. The other ANPR addresses the practices of those who offer loan modification and foreclosures rescue services to consumers, which have been the subject of recent scams.

For both ANPRs, the FTC is requesting general comments as to whether the agency should develop rules to restrict or prohibit activities in these areas. These ANPRs do not include any detailed or specific proposals. Any rules that would be developed would be issued under the unfair or deceptive acts or practices provisions of the FTC Act.

The rules adopted by the FTC will not apply to banks, thrifts, or federal credit unions. However they will apply to other entities in which the FTC has jurisdiction under the FTC Act and this would include state-chartered credit unions. Any rules that would apply to state-chartered credit unions would be in addition to the current rules that apply to mortgage lending.

Comments in response to the ANPR on activities that occur throughout the mortgage loan process are due by July 30, 2009. Please submit your comments to CUNA by July 21, 2009. Comments directed to the FTC must refer to “Mortgage Acts and Practices Rulemaking, Rule No. R911004.”

Comments in response to the ANPR on activities offered by loan modification and foreclosure rescue services are due by July 15, 2009. Please submit your comments to CUNA by July 7, 2009. Comments directed to the FTC must refer to “Mortgage Assistance Relief Services Rulemaking, Rule No. R911003.”

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.com or to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.com ; or mail them to Mary or Jeff in c/o CUNA's Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, 6th Floor, Washington, DC 20004. You may also contact us if you would like a copy of the ANPRs or you may access them on the Internet at the following addresses:

• http://www.ftc.gov/os/2009/05/R911004mortgageacts.pdf
• http://www.ftc.gov/os/2009/05/R911003mortgageassistance.pdf

> Read the full comment call @ cuna.org

> Regulatory & Legislative Resources for HR/TD Council Members