Members May Notice Changes Due to Credit CARD Act

On May 22, 2009, President Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009. There are several protections to consumers in this act; one such protection states that, as a consumer, you are entitled to a periodic statement at least 21 days before your payment is due for all open ended credit loans.   To learn more about this Act, visit www.federalreserve.gov.

McKesson Federal Credit Union presently utilizes multi-featured, open end loan agreements on all installment loans, line of credit loans and home equity line of credit loans.  For all open ended loans, we are required by CARD to send a periodic statement before each payment due date disclosing payment and other information.  The monthly statement includes the necessary information; however, CARDrequires the notice to be mailed 21 days prior to the due date.  In order to meet the requirements of CARD,  McKesson FCU will begin mailing or delivering electronically periodic statements and/or notices to all installment loans,  line of credit loans, and home equity line of credit loans  Note that you can choose to have your periodic statement delivered in environmentally-friendly electronic form.  Go to the e-DELIVERY icon on our homepage and enroll for this service. 

Furthermore, due dates on the aforementioned loan types will have their due dates moved to the 28th of the month from the 25th of the month to accommodate the requirement that the periodic statement be mailed at least 21 days before loan payments are due.

FREQUENTLY ASKED QUESTIONS ABOUT LOAN DUE-DATE CHANGES

 1. Why is this happening?

The United States Congress created and the President signed a new bill called the “Credit Card Act of 2009”. While the bill was originally targeted to make sweeping changes to how credit card issuers operate, the bill also included language that affected all open-end loans. All loans written at McKesson Federal Credit Union (McKesson FCU) since November 2006 are open-end. Thus, we were required to make these changes to comply with new regulations.

 

2. Why is my loan due date being changed to the 28^th?

One of the provisions of the law requires that the financial institution notify borrowers at least 21 days in advance of the actual payment due date. To meet this requirement, McKesson FCU will now include a notification of your due date on your monthly statement. Since the statements are usually mailed by the 3^rd of each month, moving the due date to the 28^th of each month allows the proper notification to you, the member, about your next loan payment.

 

3. My loans are on payroll deduction/automatic transfer/paid through direct deposit. How will this be affected?

If your loans are automatically paid through payroll deduction, direct deposit, or an automated transfer, you do not need to do anything. Your payments will continue as always, whether they are set up as weekly, bi-weekly, twice a month, or monthly.

 

4. I mail a check each month to pay my loan. How will I be affected?

There will be no change. You may continue to send your check monthly to pay your loan.

 

5. I want to keep paying my loan on the date I already have. That fits into my budget. Do I have to change?

No. You may continue to pay your loan on the same day as before, as long as you make your monthly payment by the due date.

 

6. I still have coupons with my original due date. Can I use them?

Yes. If you re-order a new coupon book, the due date will show the new due date of the 28^th.

 

7. What happens if my loans are paid ahead?

If your loans are paid ahead, your next loan payment date will be advanced to the 28^th of the month. If it is currently due before the 28^th of the month, it will change to the 28^th of that month.

 

8. Will my monthly payment amount remain the same?

Yes. All of the other terms of your loan will remain the same, including the monthly payment amount. The only change is the due date.

 

9. Does the term of my loan get extended?

No. If your loan was scheduled to be paid-off in a specific number of payments (ex. 36, 48, 60, etc.), then you will need to make that many monthly payments to pay off the loan.

 

10. Will my interest rate change?

No. Your interest rate will remain the same during the course of your current loan.

 

11. How will this affect the amount of interest due on my loan?

Interest on your loan accrues daily. If you pay your loan monthly on the same day, you may pay 30 or 31 days of interest each month, depending on the number of days between payments.

If you continue to make your payments as before, there should be no change in the interest collected over the course of the loan.

If you choose to wait until the new due date of the 28^th, the amount of additional interest you pay will be the number of days between payments multiplied by the daily interest rate.

 

12. Do I have to sign new loan papers to make this change take effect?

No. The loan disclosure that you signed when you originally took out your loans allows McKesson FCU to make changes to your loan, with prior notice. You received a copy of this disclosure along with the copies of your loan papers. The insert with your statement that you will or have received with your August statement is the “prior notice.”

 

13. How exactly will my loan due date change?

Loan payments previously due on September 25 will have its next due date advanced to September 28, 2009. Going forward, these loan payments will be due on the 28th until fully paid.

 

14. Will there be any effect upon my credit report or rating?

As long as you continue to make your regularly scheduled payments by the due date, there will be no negative effect on your credit report or rating.

 

If you have any other questions or wish to discuss this further, please contact McKesson Federal Credit Union at (203) 381-9492 or toll free (888) 324-6927.