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Opinion

How the small print can lead to big problems

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Spring is in the air. You can almost hear compliance examiners sniffing around your credit union, and they aren’t just smelling the roses.

On the contrary, when they visit they look at everything, especially forms. All it takes is one slip up and you realize small print matters.

Remember, certain types of accounts require specific disclosures. For instance, new membership accounts require different types of disclosures than, say, member business lending or open-end home equity (OEHE) lending. It is important to stay on top of these types of requirements as they change from time to time.

In fact, it would be wise to take a few moments and review your credit union’s general disclosure requirements. Make sure your forms comply with all state and federal regulations. If an area seems problematic, find help.

For instance, if an account is held by more than one member, what are you required to disclose? In addition, how many disclosure forms are you required to provide? Do integrated form disclosure requirements differ from traditional paper forms?

Remember when the Dodd-Frank Act mandated that TILA and RESPA disclosures integrate? It was an extremely arduous and lengthy process spanning a couple of years. However, once the integration was complete, everything changed.

The effort was noble. Combine two disclosure statements into one to make it less cumbersome for consumers and credit unions. However, this meant a complete rework of the forms. If a compliance examiner walked in and you were using old TILA and RESPA forms instead of the new disclosure after the switch, you could be faced with fines or worse.

And remember, this is but one of many examples. Involve yourself with the credit union industry long enough and you find change to be a constant. New rulings and regulations from the Consumer Financial Protection Bureau constantly impact forms. So, it is imperative to make sure your small print is up to date, yet it is also important to make sure you are disclosing proper information depending on the circumstance.

There are other concerns to consider as well. Take social media, for instance. Making a post about your credit union with a picture or statistic is good for audience engagement purposes.

But any time a credit union posts on social media they are bound by different compliance issues and terms of service specific to each social media platform. Deciding what to disclose can be problematic.

Yet, there are different disclosure requirements if you mention a product or service. Different compliance language is required if the post is a competition, and the Federal Trade Commission comes into play.

The National Labor Relations Act intersects with a company's social media policy since it covers all private sector employees. Because of that, it is important for credit unions to have a policy in place if their employees will be posting on the credit union’s behalf.

In addition, you will need further compliance language if linking to a third-party site. Not disclosing the right information could result in a non-compliance event. Even online, small print matters.

If your credit union offers Spanish membership and Spanish lending forms, the disclosures would also need to be made in Spanish, provided the disclosures are available in English. So make sure your small print is in order.

Are your Spanish documents compliant with all state and federal regulations? This applies to our OEHE and closed-end home equity lending packages, membership forms, automobile lending and more.

Pretty much all credit unions offer electronic fund transfers to its members. Your credit union is required to provide members with initial disclosures of the terms and conditions of EFT services, as well as disclose the member’s liability for unauthorized EFTs.

New members are provided a summary of their consumer rights under the regulation. Regulation E disclosures may include preauthorized credits, preauthorized payments, electronic check conversion, and electronic returned check charge.

Small print matters, and working with your forms supplier ensures your disclosures stay in order.

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