Late Payment Reporting - 30 days late, 60 days

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ChrisGreen
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Late Payment Reporting - 30 days late, 60 days

Postby ChrisGreen » Mon Jul 28, 2014 11:14 am

Reporting a late payment. 30 days after the “due date” in the contract, the credit reporting bureau may change Account Status (field 17A) from “11” meaning “0-29 days past due date” (i.e. current) to “71” meaning “30-59 days past due date” and to “78” meaning “60-89 days past due date” if the payment has not been made. Although a consumer’s relationship with the creditor may be affected in other ways, Metro 2 does not recognize a method to report an account holder delinquent until at least 30 days have past from the “due date”.

As a result, someone could pay late under the terms of their contract, even past a “grace period” but still not be reported as late for credit reporting purposes for days or weeks, until at least 30 days have past. Regarding the Account Status field, until the 30-day mark, the payment is a matter between the creditor and consumer. Although no regulation outright prohibits the credit reporting industry from implementing a capability to report a payment less than 30 days late on a credit report (i.e. either past the due date or past the grace period but less than 30 days late from the due date), threatened regulation concerning having a 30 day late mark removed after five years suggests the capabilities of reporting are in place to remove the threat of regulation of late payment reporting that has surfaced from time to time to create a form of self-regulation through the industry standard given the prominent placement and unusual emphasis of the relevant section with a heading in bold and capital letters stating “INDUSTRY STANDARD FOR REPORTING ACCOUNT DELINQUENCY” .

Non-payment of late fees. Metro 2 does not address directly whether an unpaid late fee can result in the loan being considered delinquent. Some creditors seek to apply an alleged late payment it receives to the late fee first and then to the principal and interest. Regulators do not outright prohibit attributing a portion of a normal payment amount to the late fee thus making principal short. One interpretation by the National Credit Union Association allows the short amount to be added in the form of one more principal payment added to the payment schedule as long as the due date is advanced to the next regular scheduled payment date. Sheila Albin, “Tracking Late Fees”, (March 12, 2004)(A full payment minus the late fee must “advance” the due date thus prohibiting “pyramiding” late fees.); Sheila Albin, “The Credit Practices Rule”, (December 9, 1997).

As a result you must look to a patchwork of laws and regulations that address how late fees being imposed affect accounting for the loan. The FTC Credit Practices Rule (also separately adopted by bank and credit unions regulators) regulates how holders of “consumer loans” treat a payment that does not include a late fee. Subsequent timely regular payments that do not include the late fee are prohibited from being considered delinquent to preclude “pyramiding” late fees. 16 C.F.R. section 444.4 (FTC), 12 C.F.R. section 227.15 (bank loans), 12 C.F.R. section 706.4 (credit union loans), 12 C.F.R. section 226.36(c)(1)(ii)(home loans), 12 C.F.R. section 1024.33c (transfer mortgage servicing).

Other rules and presumptions may affect accounting, late fees and proof of the date of receipt of the payment. These include the terms of the contract itself (especially provisions addressing application of payments and choice of law), state contract common law, state UCC, the applicable state’s Retail Installment Sales Act, common law mail box presumption , student loan regulations and for open end accounts, proper accounting may depend on whether the creditor accepts payment by electronic or telephone means. In addition many other laws, regulations and official interpretations may affect accounting for receipt of payment and accounting for late fees.

Article by: Chris Green
Christopher Green
Attorney at Law
Two Union Square Suite 4285
601 Union Street
Seattle WA 98101

Chris@MyFairCredit.com(206) 686-4558
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ChrisGreen
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Joined: Thu Feb 16, 2012 3:38 pm
Location: Seattle WA
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Re: Late Payment Reporting - 30 days late, 60 days

Postby ChrisGreen » Wed Aug 06, 2014 12:25 pm

Great Article by John Ulzheimer regarding late payments for credit cards and credit reporting:

In fact, the credit industry standards manual (The Credit Reporting Resource Guide) states, “The clock for a 30-day delinquency starts 30 days after the due date, as opposed to the billing date.”

This gives you a pretty generous grace period before negative information is sent to the credit bureaus.

Think about it…the CARD Act requires that your credit card due date has to be at least 21 days from the day the statement is sent.

So, that’s 21 days plus 30 days before any late payments are reported to the credit bureaus…or 51 days.

Point being, if you end up with a late payment on a credit card account then you probably deserved it.


https://www.mint.com/blog/credit/how-la ... port-0913/
Christopher Green
Attorney at Law
Two Union Square Suite 4285
601 Union Street
Seattle WA 98101

Chris@MyFairCredit.com(206) 686-4558
(206) 686-2558 facsimile
http://myfaircredit.com/attorneys/chris ... e-attorney
https://plus.google.com/+Chris-Green-At ... Washington


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