A Busy Fall for Banking
This fall saw two major changes in banking. The one that will impact the most individuals, business and consumer alike, throughout the next year involves the switch from traditional magnetic stripe debit and credit cards to chip-enabled cards. As of October 1, 2015 there was a shift in liability for fraudulent charges from being solely the responsibility of financial institutions to being the responsibility of the party in the “payment chain” with the least security against fraud. Prior to this change, the responsibility fell solely on the financial institution to reimburse any consumer who is the victim of a fraudulent charge, even if the merchant accepting the transaction had insufficient data security. Occasionally a small reimbursement for a fraction of the actual cost was distributed by the card company such as MasterCard or Visa. The goal is to make the card technology more secure, by using a micro-chip that creates a one-time code for each transaction making the card harder for fraudsters to duplicate. As a business owner, if you have not already made the switch to a chip-enabled terminal or spoken with your merchant card processor about doing so you should contact them as quickly as possible. The second major change involves the paperwork and processing of mortgage loan applications. In an effort to make the actual costs of a loan clearer for consumers, the process and forms for loan disclosures have been changed as of October 3, 2015. Referred to as the “Know Before You Owe” rule, the TILA/RESPA mortgage disclosure rule states that lenders must give potential buyers new, easier-to-use disclosures about their loan three business days prior to the closing date. This allows the buyer to carefully review the terms of the deal before the actual closing. The new rule improves the way potential buyers receive information about mortgage loans, both when applying for a loan and before closing. Both efforts highlight the ever-changing landscape of the banking industry both in an effort to keep customer information secure and to make sure that financial information is presented in a manner that is clear and easy to understand. As a local community bank, we at The Coop work hard to make sure our relationship with you is a two-way street. We’re committed to doing our part to protect you from fraud and providing information about our products and services that’s useful and easy to understand. If you don’t feel like you have this kind of relationship with your bank, it may be time to consider a switch.