While CUNA’s Compliance Community and CompBlog are the credit union community’s premier source for the latest compliance information, CUNA’s compliance staff will also be going “back to basics” on the second and fourth Wednesday of each month. These posts will examine longstanding regulations that credit unions still must ensure they are in compliance with.
Several sections of Regulation Z (which implements the Truth in Lending Act) implement the Higher Education Opportunity Act (HEOA), which became effective in February 2010. Credit unions that extend private education loans must provide disclosures about loan terms and features on or with the loan application. They must also disclose information about federal student loan programs that may offer less costly alternatives.
Additional disclosures must be provided when the loan is approved and when the loan is consummated.
The disclosure requirements apply to closed-end loans made expressly for post-secondary educational expenses but do not apply where educational expenses are funded by credit card advances, or real-estate-secured loans or other open-end loans.
In addition, the rule does not apply to education loans made, insured, or guaranteed by the federal government, which are subject to disclosure rules issued by the Department of Education.
The information credit unions must be prepared to disclose includes: