Notifying members of credit card limit changes

This past weekend I received a letter from my credit union letting me know they were increasing my credit limit. This is highly convenient as I was just getting ready to begin booking trips for next year (don’t tell my husband!). This made me realize the NAFCU Compliance team has seen many questions regarding the types of notices required when increasing or decreasing a member’s credit card limit. There are a couple of regulations that govern notice requirements for loans such as Regulations B and Z as well as the Fair Credit Reporting Act (FCRA) as implemented by Regulation V. Let’s break down which regulations trigger a notice requirement if the credit union decides to change a member’s credit limit.

Increasing Credit Limits

Regulation Z sets notification requirements for certain post-consummation changes such as increasing the required minimum periodic payment of a credit card. See, 12 C.F.R. § 1026.9(c)(2). The rule also lists changes that do not trigger the advance notice requirement in section 1026.9(c)(2)(v). The commentary to that section makes it clear increasing the member’s credit limit does not trigger Regulation Z’s advance notice requirement. However, nothing in the rule prevents the credit union from providing a friendly notice to let the member know about their new limit like my credit union sent me this past weekend.

 

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