| Important Information About Your New Loan Due Date
If you have a loan with Bay Cities Credit Union, you will see a new due date on your statement. However, your established due date(s) and the way you've been paying your loan have not changed. If you've been making payments weekly, semiweekly or monthly on a different date than the new one on your statement, that stays the same.
If you've been paying by deductions from your check or any other automatic payment plan, that stays the same.
So, what has happened; why the change?
You may have heard about the new Credit Card Accountability, Responsibility and Disclosure Act (Credit CARD Act of 2009). Most of this Federal law governs credit cards but one section governing statements applies to all multi-featured open-end loan plans, including most Credit Union's loans.
Once again, this does not change how or when you've been making your payments, even if you've been mailing in your payments instead of paying them by an automatic means. For example, if you've been mailing in your payments to make a due date of the 15th of the month, continue doing so, even though the new due date is on the 25th. All payments are credited as soon as they are received.
If you have any questions, please contact the loan department at (510) 690-6166.
Frequently Asked Questions (FAQ)
- Why is this happening?
The United States Congress created and the President signed a new bill called the "Credit Card Act of 2009". While the bill was originally targeted to make sweeping changes to how credit card issuers operate, the bill also included language that affects ALL open-end loans. Most loans at Bay Cities Credit Union are open-end. Thus, we were required to make these changes to comply with the new regulations.
- Why was my loan due date changed to the 25th?
One of the provisions of the law requires that the financial institution notify the borrower at least 21 days in advance of the actual payment due date. Since the statements are usually mailed by the 3rd of each month, moving the due date to the 25th allows the proper notification to you about your next loan payment.
- My loans are on payroll deduction/automatic transfer/paid through direct deposit. How will this be affected?
If your loans are automatically paid through payroll deduction, direct deposit, or an automated transfer, you do not need to do anything. Your payments will continue as always, whether they are set up as weekly, bi-weekly, twice a month, or monthly.
- I mail a check each month to pay my loan. How will I be affected?
There will be no change. You may continue to send your check monthly any time prior to the 25th of the month to pay your loan.
- I want to keep paying my loan on the date I already have. That fits into my budget. Do I have to change?
No. You may continue to pay your loan on the same day as before, as long as you make your monthly payment by the due date of the 25th.
- I still have coupons with my original due date. Can I use them?
Yes.
- What happens if my loans are paid ahead?
If your loans are paid ahead, your next loan payment date was advanced to the 25th of the month. If it is currently due before the 25th of the month, the due date was changed to the 25th of the month in which it was due (i.e.; a due date of September 1st would have been changed to September 25th). If it is currently due on the 26th, 27th, 28th, 29th, 30th, or 31st of the month, it was advanced to the 25th of the following month.
- What happens if my loan is delinquent?
If your loan is delinquent, then the payment due date was advanced to the 25th of the month in which the payment was due. For example: if your due date was August 1st, your new due date was set to August 25th.
- Will my payment amount remain the same?
If your payment frequency was already set to monthly, then your payment amount remains the same. If your payment frequency was semi-monthly, bi-weekly, or weekly, then we adjusted the payment amount to reflect a monthly payment frequency. For example: if you pay your loan semi-monthly (twice a month) and your deduction amount is $150, we converted your monthly payment to $300. As mentioned in #3, if your loan is setup for automatic payments, we are not changing the amount you have deducted. So, in the above example you would still pay us $150 twice a month which equals the $300 monthly amount. We will be monitoring the accounts closely to ensure there are no problems. Our goal in this is to comply with the new regulation while making it as easy for you as possible.
- Does the term of my loan get extended?
Possibly. It you continue to make your payments as before (weekly, biweekly, semi-monthly, etc.), the term will not be extended. However, if you choose to make your payments on the new due date of the 25th, then the term will be longer. This is similar to what happens when you participate in our Skip-a-Pay Program.
- Will my interest rate change?
There will be no interest rate changes as a direct result of this law.
- How will this change affect the amount of interest due on my loan?
Interest on your loan accrues daily. For example, if your loan is paid bi-weekly, each payment includes 14 days worth of interest. If you pay your loan monthly on the same day, you may pay 30 or 31 days (or 28 from February to March) of interest each month, depending on the number of days between payments.
If you continue to make your payments as before, there should be no change in the interest collected over the course of the loan.
If you choose to wait until the new due date of the 25th, it will extend the amount of time it takes you to pay off your loan and you will end up paying slightly more in interest charges.
- Do I have to sign new loan papers to make this change take effect?
No. That's one of the advantages of open-end lending.
- Will this affect my credit report or rating?
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.
If you have any other questions or wish to discuss this further, please contact the Credit Union: 510-690-6100.
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