Federal Laws

What is the U.S. Patriot act and how does it affect you?

The Check Clearing for the 21st Century Act, or Check 21, is a federal law that improves the efficiency and safety of the Nation's check payment system. According to the Federal Reserve Board, Check 21 was designed to:

• Increase the speed of check clearing
• Lower check processing system clearing costs
• Reduce the vulnerability of the check processing system to disruptions in air and ground transportation

The Check 21 law helps financial institutions like our Credit Union to send checks electronically to each other by converting paper checks to electronic files. The physical paper check becomes an "electronic check" or a "substitute check." This electronic check file contains an image of the front and back of the original check and is suitable for automated processing the same as the original. It qualifies as the legal equivalent of the original check.

How Check 21 affects you:

• Checks may clear in hours instead of days
• When viewing your cleared checks using Members 1st Online, you may see a substitute check

The Fair and Accurate Credit Transactions Act (often referred to as the FACT Act, or FACTA) was signed into law in December 2003. The FACT Act, a revision of the Fair Credit Reporting Act (FCRA), requires each of the nationwide consumer reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months through a central source.

In addition to free credit reports, the following are also in effect:

• Uniform credit standards - These set clear rules on what credit agencies can include in consumer credit reports.
• Safeguarding receipts - Retailers must hide credit and debit card information on customer receipts. Only the last five digits of a card number appear on receipts. All cash registers and point-of-sale terminals must print safeguarded receipts.
• Opt-out rules - Consumers have the right to "opt-out" and block solicitations from affiliates of companies that they do business with.
• Disclosing bad credit news - Financial institutions now have to tell you if they report any negative information about you to the credit bureaus. By law, we may report information about your account to the credit bureaus including late or missed payments or other defaults that affect any of your savings, checking or loan accounts. This information could appear on your credit reports.
  A financial institutions must tell you if it grants you credit at less favorable terms than those received by most other consumers.
• Reporting of false credit news - Any debt collector that learns that information on a consumer's credit report is fraudulent must inform the creditor that the information is false. No retailer or creditor may report credit information to credit bureaus.
• More power for identity theft victims - Identity theft victims that file police reports may block fraudulent information from appearing on their credit reports. Identity theft victims are able to obtain copies of business records that list fraudulent transactions carried out by an identity thief.
• Enhanced fraud alerts - Once a credit bureau receives a fraud alert, it must take steps to ensure that the consumer, not the thief, will be granted credit in the future.
• Special alerts for the military - American military personnel may place special alerts in their credit files while they are serving overseas to help minimize their chances of becoming victims of identity theft.

Loss Prevention & Security Services Department, (717) 795-5202, (800) 283-2328 ext. 5202 or email the Fraud Line