Compliance Question of the Week
November 28, 2011
November 29, 2011
Is a credit union required to send a monthly statement if no share drafts have cleared an account and no EFT transactions have occurred during the monthly cycle?
No, a monthly statement would not be required in this situation. The Electronic Fund Transfer Act (EFTA) and Section 205.9(b) of Regulation E require the credit union to deliver periodic statements for each monthly cycle in which an electronic fund transfer (EFT) has occurred—or at least quarterly if no transfer has occurred.
Share and share-draft account disclosures are governed by the Truth in Savings Act (TISA), not the EFTA. As implemented by the National Credit Union Administration’s (NCUA) Part 707, TISA does not require the credit union to deliver periodic statements at all. However, if the credit union does deliver periodic statements, the disclosures must also comply with TISA’s requirements, including proper disclosure of annual percentage yield earned, amount of dividends, fees imposed, and length of the statement period.
So, if there is no EFT activity, quarterly statements will suffice, regardless of share draft activity. However, if the credit union usually delivers monthly statements on a regular basis, its members may expect to receive them regardless of transaction activity. So, member notification, as well as some reeducation, may be necessary.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.
Posted in Compliance.