Contents:

• Overview of the Credit CARD Act of 2009
  Key elements and how CFE cardholders will be affected.
  
  
• FAQs
  Find Answers to frequently asked questions or submit your questions to CFE.
  
  
• New Sample CFE Credit Card Statement
  Coming Soon! Preview format changes on your CFE Credit Card Statement.
  
  
• Resources
  Helpful links to various Websites and documents.

Objective 1 -- Bans Unfair Rate Increases

The law limits when interest rates can be increased on existing balances, so consumers can have confidence that the interest rates on their existing balances will not be hiked unfairly.

• Retroactive interest-rate hikes are banned except when:
• An introductory or "teaser" period ends.
• The interest rate is a variable rate tied to an index.
• The card user completes the terms of a workout plan for debt repayment or fails to comply with terms of a workout plan.
• The card user is more than 60 days late in making a monthly payment.
• “Universal Default" Is banned.
• Card issuers that increase interest rates on accounts due to market conditions, creditworthiness or other factors must review those accounts every six months. If those factors have changed, card issuers must, if warranted, reduce the interest rate.

Objective 2 -- Prevents Unfair Fee Traps

The law requires that late fees be reasonable and related to the infraction, and it also governs over-the-limit fees:

• Monthly statements must be mailed 21 days prior to the due date so cardholders have a reasonable amount of time to pay.
• The due date must be the same date each month, and if the payment date falls on a weekend or holiday, the payment will be credited the next business day without penalty.
• Any payment over the minimum balance must be applied to the higher-interest balance first.
• The practice of “double-cycle” billing is prohibited.
• Cardholders now have to “opt-in” for over-the-limit fees; otherwise, any transaction that exceeds their credit limit will be rejected. This helps consumers avoid over-the-limit fees because they must first provide their permission to process transactions that would place the account over the limit.

Objective 3 -- Plain Sight/Plain Language

Credit card contract terms will be disclosed in language that consumers can see and understand so they can avoid unnecessary costs and manage their finances.

• Credit card issuers must provide clear disclosures of account terms including fees, penalties and other terms.
• Any significant change in terms must be provided to cardholders 45 days in advance, with the changes highlighted.
• Consumers must be informed of their right to refuse the change in terms, with an explanation of the options to close or cancel their account, which may not require immediately paying off the entire balance on the account.
• There are requirements for clear statements disclosing payment-due dates, and how long it will take consumers to pay off their credit card debt if they only make the minimum payment each month. Similarly, issuers have to display the payment amount and total interest-cost to pay off the existing balance in 36 months.
• A notice must appear on the monthly statement near the due date, disclosing whether interest rates will increase if one or more payments are not received on time, and what the penalty interest rate will be.

Objective 4 -- Accountability

The act will help ensure accountability from both credit card issuers and regulators who are responsible for preventing unfair practices and enforcing protections.

• Credit Card issuers will now be required to make contracts available on the Internet in a usable format.

Objective 5 -- Protections for Students

The law places strict limitations on the marketing and issuing of credit cards to young people.

• Consumers under the age of 21 must have an adult co-signer on their account, or show proof of income to repay card loans.
• The act contains new protections for college students, including a requirement that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.

1. What is the Credit CARD Act?
   The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, is a bill created by Congress that was signed into law on May 22, 2009. The law aims to protect consumers from unfair and deceptive credit card practices by making changes on how credit card issuers operate. The law also includes changes to all open-end loans.
   
   While CFE has never engaged in unfair credit card practices targeted by the Credit CARD Act, we are required to make some changes to comply with new regulations.
   
   
   
2. What types of CFE loans are affected?
   • PLOCs (statement suffix 07)
   • HELOCs (statement suffix 08,18, 80, 81 & 82)
   • Signature Loans (statement suffix 29)
   • Credit Cards
     
     
     
3. When do the Credit CARD Act changes take place?
   Some changes have already taken place. For example, credit card issuers must give 45-day advance notice of significant changes in terms and give consumers 21 days to make monthly payments. Additional changes are as follows:
   
   
   • February 22, 2010 -- Limited interest rate hikes, no more universal default, more time to pay monthly bills, clearer due dates and times, highest interest balances paid first, limits on over-limit fees, no more double-cycle billing, decreased account opening fees for subprime credit cards, and minimum payment consequences must be disclosed.
     
     
   • July 1, 2010 -- Federal rules on unfair or deceptive credit card practices and disclosure take effect.
     
     
   • August 22, 2010 -- If the issuer began the practice of repricing interest rates after January 1, 2009 due to market conditions or other factors, they must begin reviewing accounts every six months to reduce interest rates. Credit card fees for paying late, exceeding the credit limit or other violations must be reasonable and proportional to the violation. Gift cards must be valid for at least five years; dormancy fees banned, unless no activity in the 12-month period ending on the date on which the charge or fee is imposed.
     
     
     
4. How will the Credit CARD Act affect CFE members?
   Many of the regulatory changes will be transparent to CFE cardholders. However, our credit card statement format, disclosure language, and system methods will be changing in accordance with the new regulations. To further understand the impact of the Act on CFE, please review our Webpage for a summary of the law, a full explanation of how CFE members will be affected and links to helpful resources.
   
   
   
5. Will my credit card rate change?
   Your rate will not change as a direct result of the Act. CFE rates will remain as variable. The rate for purchases, cash advances and balance transfers is determined by Prime Rate (Wall Street Journal Index). The Wall Street Journal Index is published in the consumer-rates table of the Wall Street Journal on the 15th of each month (or the next business day if not published on the 15th) effective with your billing statement the following month.
   
   A penalty APR will be applied to your account if you are 60 days past due. If your APR is increased for the reason stated, the penalty APR will apply until you make six consecutive minimum payments when due.
   
   
   
6. What is an introductory/promotional rate?  How are they affected?
   An introductory rate is an interest rate that's usually below-market and is offered for a certain period of time and expires at a determined time. Introductory rates generally apply to balance transfers and cash advances.
   
   Under the Act, introductory/promotional rates must last for at least six months.
   
   
   
7. Will the terms and conditions of my credit card agreement change?
   Yes. We must notify consumers of significant changes in terms on their accounts at least 45 days prior to the changes taking effect. We must also inform consumers of their right to cancel or close the account if you do not agree to the changes.
   
   
   
8. What if I don't accept the new terms and conditions?
   You may reject any significant change in terms. Please call the Member Service Center at 407-896-9411, or outside Orlando, 800-771-9411, option 3, or by mailing us at: CFE Federal Credit Union, Attn: Card Services, PO Box 958471, Lake Mary, FL 32795-8471. In calling or writing us to reject new terms, you will forego any credit availability for the account and the account will be terminated or suspended. CFE will establish an amortization period required by law for the balance on the account beginning no earlier than the date on which CFE was notified of the rejection. The right to reject a change in terms does not apply if CFE has not received your required minimum periodic payment within 60 days after the due date for that payment.
   
   
   
9. Will my credit card statement change?
   Yes. A visual description of changes will be made available to you soon.  However, statement changes will include the following:
   
   
   • Format Adjustments -- Your statement will be easier to understand by making available important information including your transactions, fees, minimum payment and due date; the estimated time it would take you to pay off your balance by only paying the minimum payment; the amount you would need to pay monthly in order to pay off your balance in 36 months; and a summary of year-to-date fees and the interest you've paid.
     
     
   • Established Due Dates -- Your bill will be due on the same date of the month, every month.
     
     
   • Advanced Statement Delivery -- Your statement will be mailed 21 days before your monthly payment is due.
     
     
     
10. Will my credit card payment due date change?
    Possibly, based on required changes that payments are to be due on the same date each month.
    
    
• Can I select my due date?
  Yes. Please call the Member Service Center at 407-896-9411 or outside Orlando, 800-771-9411, option 3, to specify your choice of due date for the 2nd, 9th, 16th or 22nd of the month. You may also complete the form listed here and fax back to the Member Service Center at 407-333-7920.
  
  Due Date Request Form
  
  
  
11. What if my payment due date falls on a non-business day, such as weekend or holiday?
    If your due date falls on a weekend or holiday, payments must be made by the next business day following the weekend day/holiday to avoid late-payment penalties.
    
    
    
12. What is double cycle billing?
    CFE does not use the method of double-cycle billing. However, double-cycle billing is a method used by creditors to calculate the amount of interest charged for a given billing period. Double-cycle billing takes into account not only the average daily balance of the current billing cycle, but also the average daily balance of the previous period. Double-cycle billing can add a significant amount of interest charges to customers whose average balance varies greatly from month to month.
    
    
    
13. Will this Act affect my Mortgage?
    The Credit CARD Act of 2009 does not include mortgages so your mortgage will not be affected.
    
    
    
14. How and where can I make payments to my CFE credit card?
    CFE's payment options have not changed. You may continue to make payments via MATT Web, at any CFE branch location and via mail by sending your payment to CFE Federal Credit Union, PO Box 4969, Orlando, FL 32802-4969. Under the Act, you can no longer be charged additional fees to pay your bills by mail, electronic transfer, telephone or other methods, unless you request expedited payment, such as a last minute payment to avoid late fees. However, CFE does not participate in these types of fees.
    
    
    
15. How does CFE calculate finance charges under the new Act?
    CFE uses the average-daily-balance method (including current transactions). We figure the interest charge on your account by applying the periodic rate to the average daily balance of your account. To get the average daily balance, we take the beginning balance of your account each day, add any new purchases/advances/fees, and subtract any unpaid interest or other finance charges and any payments or credits. This gives us the daily balance. Then, we add up all the daily balances for the billing cycle and divide the total by the number of days in the billing cycle. This gives us the average daily balance.
    
    
    
16. Payment allocation – How will CFE apply my payments to balances under the new Act?
    For any monthly payment amounts that exceed the minimum payment due, CFE will apply the overage to balances with the highest interest rate first, then to balances ranging from next highest to lowest.
    
    
    
17. How can I make payments to my CFE credit card account?
    Payments can be made online via MATT Web, at any CFE branch location, by telephone at (407) 896-9411, or outside Orlando, (800) 771-9411, option 3, or mailed to CFE Federal Credit Union, PO Box 4969, Orlando, FL 32802-4969.
    
    
    
18. What is the cut-off time for making payments in-person at CFE branch locations, and when will the payment be applied to my account?
    Payments will be accepted at CFE branch locations until the close of business and applied the same day. CFE branch locations have varied hours of operations; please consult our branch locations and hours.
    
    
    
19. If I make a payment online via MATT Web or Infolink (PSCU), when will the payment be applied to my account?
    If you transfer your payment prior to 5 p.m. on a business day the payment will post to your credit card that day.  Payments after 5 p.m. will be applied the following business day.  Payment transfers on Saturdays, Sundays and holidays will apply the following business day.
    
    
    
20. If I make a payment by telephone through CFE's Member Service Center, when will the payment be applied to my account?
    If you transfer funds from a CFE account prior to 5 p.m. on a business day the payment will be applied to your credit card that day.  Payments after 5 p.m. will be applied the following business day.  Payment transfers on Saturdays, Sundays and holidays will apply the following business day.
    
    If you transfer funds from a non-CFE account the payment will typically be applied to your credit card the following business day, depending on your financial institution and how long it takes for CFE to receive the funds.
    
    
    
21. Will CFE's credit card grace period change?
    No. You will continue to have a 25-day grace period before you are assessed any late payment fees/ charges. A CFE cardholder's cycle date through the due date equals the grace period. Cash advances do not have a grace period.
    
    
    
22. Will CFE's late-payment fee change?
    Yes. The new late-payment fees are as follows.
    
    
• $0 -- $499 balance= $15
• $500 -- $2,000 balance= $25
• $2,001+ balance= $30
  
  
  
23. Will CFE’s over-the-limit policy change?
    Yes. CFE will no longer have over-the-limit fees. However, by using your CFE credit card, you agree not to exceed the established limit. If at any time your account is over the limit for reasons such as fees or interest, your next statement will include the amount over the limit in the minimum payment due.
    
    
    
24. What is universal default?
    CFE does not engage in universal default and the Credit CARD Act bans it. Universal default is when a lender changes the terms of a loan from the normal terms to the default terms (i.e., the terms and rates given to those who have missed payments on a loan) after the lender is informed that their customer has defaulted with another lender, even though the customer has not defaulted with the current lender.
    
    
    
25. What is a subprime card and/or what is predatory lending?
    CFE has never participated in subprime or predatory lending. Subprime cards are a type of credit card issued to people with substandard credit scores or limited credit histories. These cards will typically carry much higher interest rates than other credit cards. They also come with extra fees and lower credit limits.
    
    Predatory lending is dishonest actions carried out by a lender to entice, induce and/or assist a borrower in taking a mortgage that carries high fees and/or a high interest rate, strips the borrower of equity, or places the borrower in a lower-credit-rated loan to the benefit of the lender.
    
    
    
26. What is a delinquent account?
    A delinquent account is a term used to describe an account that has failed to meet required obligations according to agreements set at the opening of the account. Delinquent accounts include accounts that are overdue in payments.
    
    
    
27. Will my CFE credit card limit change?
    Not as a result of the Act. Your credit card limit will remain the same during the course of your current loan unless you request a credit increase or CFE notifies you otherwise.
    
    
    
28. Will prepaid cards, such as gift cards, be affected by the act?
    Yes. Prepaid cards, gift cards and gift certificates cannot expire within 5 years of activation or unless the terms of expiration are clearly disclosed. The Act bans dormancy fees, inactivity fees or services fees on gift cards unless there has been no activity in a 12-month period and CFE clearly discloses all fees before the gift card is purchased. Fees are limited to one per month.
    
    Exclusions to the Act include only prepaid phone cards, reloadable cards, loyalty or award cards, cards issued for admission to special events or venues/theme parks, and certificates issued in paper.
    
    
    
29. Can students still apply and have a credit card?
    Yes. However, the Credit CARD Act restricts CFE's ability to provide credit cards to young members who are under the age of 21. In order to issue credit cards to such members, the application will have to: 1) include the signature of a consignor, guarantor or joint applicant who has attained the age of 21 and has the means to repay the debts incurred; or 2) include financial information indicating that the underage member has the ability to repay the debts incurred. Future credit-line increases will follow the above requirements.
    
    
    
30. What if I am a member of the armed forces?
    The Act caps credit card APRs for service members at 6 percent as long as they are deployed. The Federal Reserve Board added a provision that allows credit card issuers to increase rates on cards owned by service members to restore APRs to pre-deployment levels.
    
    
    
31. Will these changes affect my credit report?
    No. As long as you continue to make your regularly scheduled payments by the due date, there will be no negative effect on your credit report or rating.