Breakout Session 2

Frank Drake

Navigating the ‘Plastic Prohibition” - Legitimating Offsets of Deposits against Credit Card Debt
Frank Drake, Esq., Smith Debnam Narron Drake Saintsing & Myers, Raleigh, North Carolina

Generally, the offset of deposits against unpaid credit card bills is forbidden by the Fair Credit Billing Act (16 USC §1666(h)) and its related federal regulations. Credit unions cannot invoke their statutory lien on all deposits to recoup credit card delinquencies.  However, what cannot be done by statute can be done by contract – IF you do it right. Too many CUs are doing it wrong. That is a compliance mess waiting to happen. This segment will explore the few right ways and many wrong ways that CUs try to gain a member’s voluntary consent to work an offset of deposits against plastic debt. Specific steps, specific instructions and best methods allow for understanding, conformity with the regulation and resort to the exceptions.  Learn it here, and do it right.

Knowledge Level: Basic
No Prerequisites or advanced preparation required
Field of Study: Regulatory Ethics

About Frank Drake

Franklin Drake has been a partner in the Raleigh, North Carolina law firm of Smith Debnam Narron Drake Saintsing & Myers since 1994, following a sixteen year practice specializing in creditor's rights, bankruptcy, and repossession law in Louisville, Kentucky. There, he was Senior Vice-President of William Mapother's law firm.  Mr. Drake graduated from the University of North Carolina in 1975 with a B.A. with honors and with his law degree in 1978. He has practiced in North Carolina, Kentucky, West Virginia and the federal courts of southern Indiana. For the last 30 years, he has lectured regularly at practical training courses, bankruptcy and regulatory compliance programs and webinars. Sponsors include NASCUS, CUNA, NAFCU, ACUIA, AACUL, NCUMA, state regulators and more than two dozen state credit union leagues across the US. His articles on the practical application of laws and regulations to credit union procedures have appeared in state bar magazines, nationally distributed newsletters and on the Internet. For the past 31 years, Frank has advised and represented most of the major secured and unsecured financers on secured lending, bankruptcy and regulatory compliance matters. He especially enjoys guiding his clients around compliance pitfalls and how NOT to get sued.

View All Sessions