CUNA Comment Letter

Interim Final Rule - Truth in Savings

VIA FACSIMILE (202) 622-7754

January 28, 2000

Ms. Becky Baker
Secretary of the Board
National Credit Union Administration
1775 Duke Street
Alexandria, Virginia 22314-3428

RE: Interim Final Rule - Truth in Savings

Dear Ms. Baker:

The Credit Union National Association (CUNA), which represents more than 90 percent of the state and federal credit unions, appreciates the opportunity to comment on the National Credit Union Administration’s (NCUA) interim final rule on the Truth in Savings Act (TISA). The NCUA requested comments on the rule, which would allow credit unions to issue periodic statement disclosures in electronic form as long as the member agrees to this form of delivery. This interim final rule appeared in the Federal Register on November 26, 1999.

TISA requires NCUA to establish regulations substantially similar to the TISA regulations promulgated by the Federal Reserve Board of Governors (Federal Reserve). The Federal Reserve published a similar regulation in September. Similar to that rule, NCUA’s rule applies only to periodic statement disclosure, while other TISA disclosures may not be provided in electronic form. Both rules also require a member to agree to receive electronic disclosures and provide clearly informed consent, but do not explain what constitutes a valid agreement or adequate consent.

CUNA supports electronic delivery of disclosures that would improve the operations of credit unions. These changes to the rules would reduce costs and paperwork associated with issuing periodic statements. They would also improve service to credit union members by providing members with more options. Before this rule, credit union members had asked to receive periodic statements electronically and requested that credit unions stop sending them paperwork. Under this interim rule, credit unions can provide members with that option and thereby make their services more convenient to members.

CUNA also believes that credit unions should be able to offer other required disclosures to their members electronically. CUNA realizes that the Federal Reserve is considering proposed rules that provide for electronic delivery of more TISA disclosures and other disclosures. CUNA believes that electronic delivery of additional disclosures should be available as soon as possible so that credit unions and their members experience all the conveniences associated with electronic disclosures.

While the current rule adds to this convenience, CUNA is concerned that some credit unions may not feel able to take advantage of the rule because of its ambiguity. For example, the interim rule does not specify what constitutes a valid agreement and does not clarify whether a member can agree electronically to electronic delivery. This uncertainty may constrain some credit unions from doing as much as they could to enhance service. Therefore, CUNA suggests that NCUA clarify that electronic consent is a valid agreement. CUNA also recommends that NCUA provide other examples of what establishes a valid agreement. Any guidance that NCUA offers should be illustrative rather than restrictive or burdensome, so that credit unions are not competitively disadvantaged.

CUNA is aware that NCUA’s rule must be substantially similar to the Federal Reserve’s regulation. We urge NCUA to coordinate with the Federal Reserve as to what constitutes a valid agreement as other institutions have similar concerns regarding the need for clarification on this issue. These clarifications could be added and the rules still would be substantially similar. Guidance could be provided in the commentary or supplementary information.

In conclusion, CUNA supports electronic delivery of periodic statements. Please feel free to contact me, if you have any questions or comments at (202) 218-7766.


Michelle Q. Profit
Assistant General Counsel