Congress, in a somewhat hurried effort to address abuse by the big, national credit card issuers, included language that applies the new Credit Card Act of 2009 to all "open-end loans".  By definition, open-end loans are home equity loans and any signature or collateral loan on which additional advances can be made, meaning that the vast majority of ACU loans are covered by the new law.  Members have always enjoyed the convenience of open end plans, since they give them the ability to borrow with less paperwork, and often without a trip to the loan officer.  The primary requirement of the law is that we must now provide a 21-day monthly payment notice prior to a late charge being applied to a loan, or prior to the reporting of delinquency to the credit bureau.

Please note that most first mortgages and auto loans closed at the dealership will not be subject to the new law.

In order to avoid having to send a separate loan payment notice monthly, we will use our monthly statement to provide the 21-day notice.  However, that will require that all loan due dates be pushed to the end of the month.  You saw that disclosure in your August statement.  That disclosure also confirmed that if you make your loan payments via payroll deduction or direct deposit, you need not change anything. 

We apologize for any inconvenience this presents to you.  As this credit card legislation worked its way through Congress credit unions made it very clear how including a broad open-end definition would affect our members, and we believed any such provision had been removed.  Ultimately, however, a broader application was adopted, and we must now comply.  In that a primary objective of Alabama Credit Union's service is a high level of convenience, we regret that this law forces us to make changes to what you've come to appreciate as member-friendly service.  We pledge our best efforts to minimize the law's impact on you.

If you have any questions, please give us a call.

Steve Swofford
President