A press release dated February 1, 2011, indicates that the Federal Reserve Board (FRB) will defer its rulemaking on the disclosures for debt protection products to the Consumer Financial Protection Bureau (CFPB). We'd like to thank all those who responded to the FRB regarding these proposals. It is clear from the statement that the overwhelming number of comments about the rules helped persuade the FRB to step back from making final decisions at this time. When the CFPB takes up this issue, we will continue to monitor the situation, keep you informed, and if necessary, help mobilize the credit union industry again for additional grassroots efforts. But for now, this is a positive and significant development.

The credit union industry is known for pulling together to make positive things happen. Once again, your quick actions have helped to mobilize the entire industry around the Reg Z Fair Disclosure Advocacy Project to raise awareness of the issues. Here are highlights of the key accomplishments:

• Over 2,000 comment letters were submitted to the FRB, and many included powerful personal stories from credit union members.
• Credit Union National Association (CUNA), National Association of Federal Credit Unions (NAFCU) and the National Federation of Community Development Credit Unions submitted comments and in several instances raised the issue in face-to-face meetings with FRB staff.
• Leagues participated in a grassroots advocacy effort. Among others, the Arizona, Indiana, Missouri, North Carolina, North Dakota, Pennsylvania, South Dakota and Virginia Leagues sent in their own comments.
• CUNA Mutual met with FRB attorneys on December 2 in Washington D.C. Credit union member testimonials supporting the value of payment protection products were collected and presented as part of the meeting, humanizing the issue for the FRB attorneys.
• At the request of FRB attorneys, CUNA Mutual submitted alternative disclosure language for their review.
• A study was done by the Consumer Credit Industry Association, demonstrating that the FRB's consumer testing of the disclosure was insufficient. The study also tested an alternative disclosure which tested higher among consumers.
• Media attention including articles and opinion editorials published in The Safety & Soundness Report, Credit Union Journal, Credit Union Magazine and in at least 11 League newsletters and websites.

The Federal Reserve Board (FRB) recently proposed additional Truth-in-Lending disclosures for payment protection products, including credit life insurance, credit disability insurance, debt protection, guaranteed asset protection, and debt suspension. The proposed disclosures require credit unions selling payment protection products with open and closed-end lending to disclose information about the products in the form of a table, including information about the cost and the benefits of the products. The proposed disclosures, however, go much further than sharing useful information about the products - the disclosures cast the products in a strictly negative light. It is likely the proposed regulatory language will have a significant negative impact on credit unions and credit union members.

The credit union industry has always supported fair, accurate and appropriate disclosures to members purchasing these products. However, if passed, the draft regulations would have the opposite effect. The proposed disclosures misrepresent the purpose and value of payment protection products to credit union members. In fact, these disclosures would likely have the impact of discouraging members from considering the purchase of products that are suitable and appropriate for their individual needs.