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CU Compliance Connection

CU Compliance Connection. CFPB TILA Independent Ability to Repay. CFPB Independent Ability-to-Repay. Truth in Lending Credit Card Accountability Responsibility and Disclosure Act CARD Act. CFPB Independent Ability-to-Repay. Truth in Lending 2009 – CARD Act Statement requirements

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CU Compliance Connection

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  1. CU Compliance Connection CFPB TILA Independent Ability to Repay

  2. CFPB Independent Ability-to-Repay • Truth in Lending • Credit Card Accountability Responsibility and Disclosure Act • CARD Act

  3. CFPB Independent Ability-to-Repay • Truth in Lending • 2009 – CARD Act • Statement requirements • Fee limitations • Rules for consumers under age 21 • 2010 – Amendment • Independent ability-to-repay for all consumers

  4. CFPB Independent Ability-to-Repay • Truth in Lending §1026.51 • “In light of the statutory framework established by TILA, the independent ability to repay may have unduly limited the ability members aged 21 or older, including spouses or partners who do not work outside the home, to obtain credit.”

  5. CFPB Independent Ability-to-Repay • Truth in Lending – Four Main Elements • Remove reference to the independent ability-to-repay • Consider income and assets that a member over 21 has a reasonable expectation of access • Members under age 21 must have the independent ability-to-repay • Amendment does not violate Reg. B – even for members under age 21.

  6. CFPB Independent Ability-to-Repay Ability to Pay Tests If the non-applicant’s salary or other income is deposited regularly into a joint account shared with the member applicant, the credit union is permitted to consider the amount of the non-applicant’s income that is being deposited regularly into the account to be the applicant’s current or reasonably expected income.

  7. CFPB Independent Ability-to-Repay Ability to Pay Tests If the non-applicant’s salary or other income is deposited into an account that the member applicant does not have access to; however, the non-applicant regularly transfers a portion of that income into the applicant’s individual deposit account. A credit union is permitted to consider the amount of the non-applicant’s transferred income that is regularly deposited into the member applicant’s account to be the members reasonably expected income.

  8. CFPB Independent Ability-to-Repay Ability to Pay Tests If the member applicant does not have access to the non-applicant’s salary or other income and it is not deposited into a joint account; however, the non-applicant regularly uses a portion of their income to pay for the member applicant’s expenses, a credit union is permitted to consider the amount of the non-applicant’s income that is used regularly to pay for the applicant’s expenses to be the applicant’s current or reasonably expected income because the member applicant has a reasonable expectation of access to that income.

  9. Thank you for joining me for this overview of the Independent Ability-to-Repay amendment. Stay Tuned....

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