New credit card legislation

Pacific Service CU Platinum Visa

Pacific Service CU Platinum Visa

Signed into law May 22, 2009, by President Obama, parts of the new Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 will go into effect in February.  The purpose of Congress’ reform is to protect consumers against acts that the Federal Reserve calls “unfair or deceptive.”

 

Some banks implemented changes in anticipation of the final legislation going into effect.  You may have already been affected in the form of rising rates and fees, decreased credit limits and canceled lines of credit, without cause.

 

The good news is that, for the most part, we already meet the majority of the new requirements.  While other institutions are raising rates and adding fees, we are still providing honest value.  We still offer the same rate for purchases, cash advances and balance transfers.  Unlike the big bank credit cards, we have no cash advance fee, no balance transfer fee and no default APR – meaning, we won’t raise your rate if you make a late payment.

 

You will notice some modifications to our program, including how information is displayed on your statements and how information is disclosed.

 

The largest change for us as a result of the legislation is moving from a fixed-rate to a variable-rate product.  The rate will be tied to the Prime rate and will rise and fall as does the Prime rate, similar to most variable-rate home equity lines of credit.  The good news is that this change allowed us to reduce or maintain rates for the majority of our members.  A small group of our members’ rates will increase slightly due to credit qualifications; however, those members will have the opportunity to have their rate reviewed and lowered as their credit improves.

 

We’ve put a lot of time and effort into redesigning our credit card program to comply with the new regulations and in the best interests of our members.  You can be confident that our rates and terms will continue to be among the most competitive in the marketplace.

 

I am happy to take questions in the comments section.

5 comments on this post.
  1. Eileen Borton:

    Hello Steve – I went on-line to take a look at PSCU and found your Blog. What a great way to communicate to members important information and benefits such as the rates on credit cards; same rates for purchases, cash advances, balance transfer and the topper – no default APR! Looking forward to your next entry. ~Eileen~

  2. Juan Valdez:

    Hi Steve, Thank you for making the effort to communicate with your members and the community at large.

    I have two questions:
    1) I heard from my friend that credit union deposits are not insured by the FDIC. Does this mean they are at risk?

    2) PSCU always offers competitive rates on savings accounts, but sometimes other credit unions occasionally offer higher rates. Why doesn’t PSCU always offer the highest rate in the marketplace for every deposit product?

    Keep up the hard work!
    Juan

  3. Steve:

    Hi Juan -

    1) No, quite the opposite. The FDIC insures banks. Credit unions are insured by the National Credit Union Administration (NCUA). Your savings are federally insured up to $250,000. There are additional coverage options available based on the types of accounts owned and the number of beneficiaries. Here is a link to a brochure which describes the coverage in detail. http://www.ncua.gov/Resources/ShareInsurance/HowYourAccountInsured.pdf

    2)Although we always strive to offer deposit rates that are among the best in the market, we have to balance the needs of our saving and borrowing members. With the current state of the economy, we have very little loan demand. Loan demand is what drives our income and allows us to pay above-market rates. In addition, many institutions are overpaying for deposits because they are looking for liquidity. While we strive to provide our members with market leading value with those products and services we offer, it simply is not in the best interest of our members to match all pricing offers.

    Thanks for your comments and I appreciate your continued support of the credit union.

  4. Chris:

    I live in Washington DC and just had to have my credit card replaced because it was compromised. To my enormous disappointment my old “Big Sur” picture has been replaced with your extremely bland “platinum” logo. I truly enjoyed the Big Sur art on the card, particularly here in the East. what can Pacific Service do to liven up the card? Now, it is just like ever other boring card issue by any bank.

  5. Kristin:

    Hi Chris! I’m sorry you’re disappointed with the card image. I liked the coast picture, too. Unfortunately, we received feedback in both directions for the “Big Sur” card, so we decided to incorporate our new color standards. We’re always making improvements to our program. Your suggestion will be included. Thanks for the comment. Kristin, Vice President, Marketing

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