(a) Required disclosures by creditor Before opening any account under an open end consumer credit plan, the creditor shall disclose to the person to whom credit is to be extended each of the following items, to the extent applicable:
(1) The conditions under which a finance charge may be imposed, including the time period (if any) within which any credit extended may be repaid without incurring a finance charge, except that the creditor may, at his election and without disclosure, impose no such finance charge if payment is received after the termination of such time period. If no such time period is provided, the creditor shall disclose such fact.
(2) The method of determining the balance upon which a finance charge will be imposed.
(3) The method of determining the amount of the finance charge, including any minimum or fixed amount imposed as a finance charge.
(4) Where one or more periodic rates may be used to compute the finance charge, each such rate, the range of balances to which it is applicable, and the corresponding nominal annual percentage rate determined by multiplying the periodic rate by the number of periods in a year.
(5) Identification of other charges which may be imposed as part of the plan, and their method of computation, in accordance with regulations of the Board.
(6) In cases where the credit is or will be secured, a statement that a security interest has been or will be taken in
(A) the property purchased as part of the credit transaction, or
(B) property not purchased as part of the credit transaction identified by item or type.
(7) A statement, in a form prescribed by regulations of the Board of the protection provided by sections
1666 and
1666i of this title to an obligor and the creditors responsibilities under sections
1666a and
1666i of this title. With respect to one billing cycle per calendar year, at intervals of not less than six months or more than eighteen months, the creditor shall transmit such statement to each obligor to whom the creditor is required to transmit a statement pursuant to subsection (b) of this section for such billing cycle.
(8) In the case of any account under an open end consumer credit plan which provides for any extension of credit which is secured by the consumers principal dwelling, any information which
(A) is required to be disclosed under section
1637a (a) of this title; and
(B) the Board determines is not described in any other paragraph of this subsection.
(b) Statement required with each billing cycle The creditor of any account under an open end consumer credit plan shall transmit to the obligor, for each billing cycle at the end of which there is an outstanding balance in that account or with respect to which a finance charge is imposed, a statement setting forth each of the following items to the extent applicable:
(1) The outstanding balance in the account at the beginning of the statement period.
(2) The amount and date of each extension of credit during the period, and a brief identification, on or accompanying the statement of each extension of credit in a form prescribed by the Board sufficient to enable the obligor either to identify the transaction or to relate it to copies of sales vouchers or similar instruments previously furnished, except that a creditors failure to disclose such information in accordance with this paragraph shall not be deemed a failure to comply with this part or this subchapter if
(A) the creditor maintains procedures reasonably adapted to procure and provide such information, and
(B) the creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under section
1666 of this title. In lieu of complying with the requirements of the previous sentence, in the case of any transaction in which the creditor and seller are the same person, as defined by the Board, and such persons open end credit plan has fewer than 15,000 accounts, the creditor may elect to provide only the amount and date of each extension of credit during the period and the sellers name and location where the transaction took place if
(A) a brief identification of the transaction has been previously furnished, and
(B) the creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under section
1666 of this title.
(3) The total amount credited to the account during the period.
(4) The amount of any finance charge added to the account during the period, itemized to show the amounts, if any, due to the application of percentage rates and the amount, if any, imposed as a minimum or fixed charge.
(5) Where one or more periodic rates may be used to compute the finance charge, each such rate, the range of balances to which it is applicable, and, unless the annual percentage rate (determined under section
1606 (a)(2) of this title) is required to be disclosed pursuant to paragraph (6), the corresponding nominal annual percentage rate determined by multiplying the periodic rate by the number of periods in a year.
(6) Where the total finance charge exceeds 50 cents for a monthly or longer billing cycle, or the pro rata part of 50 cents for a billing cycle shorter than monthly, the total finance charge expressed as an annual percentage rate (determined under section
1606 (a)(2) of this title), except that if the finance charge is the sum of two or more products of a rate times a portion of the balance, the creditor may, in lieu of disclosing a single rate for the total charge, disclose each such rate expressed as an annual percentage rate, and the part of the balance to which it is applicable.
(7) The balance on which the finance charge was computed and a statement of how the balance was determined. If the balance is determined without first deducting all credits during the period, that fact and the amount of such payments shall also be disclosed.
(8) The outstanding balance in the account at the end of the period.
(9) The date by which or the period (if any) within which, payment must be made to avoid additional finance charges, except that the creditor may, at his election and without disclosure, impose no such additional finance charge if payment is received after such date or the termination of such period.
(10) The address to be used by the creditor for the purpose of receiving billing inquiries from the obligor.
(11)
(A) In the case of an open end credit plan that requires a minimum monthly payment of not more than 4 percent of the balance on which finance charges are accruing, the following statement, located on the front of the billing statement, disclosed clearly and conspicuously: Minimum Payment Warning: Making only the minimum payment will increase the interest you pay and the time it takes to repay your balance. For example, making only the typical 2% minimum monthly payment on a balance of $1,000 at an interest rate of 17% would take 88 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum payments, call this toll-free number: XXXXXX. (the blank space to be filled in by the creditor).
(B) In the case of an open end credit plan that requires a minimum monthly payment of more than 4 percent of the balance on which finance charges are accruing, the following statement, in a prominent location on the front of the billing statement, disclosed clearly and conspicuously: Minimum Payment Warning: Making only the required minimum payment will increase the interest you pay and the time it takes to repay your balance. Making a typical 5% minimum monthly payment on a balance of $300 at an interest rate of 17% would take 24 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum monthly payments, call this toll-free number: XXXXXX. (the blank space to be filled in by the creditor).
(C) Notwithstanding subparagraphs (A) and (B), in the case of a creditor with respect to which compliance with this subchapter is enforced by the Federal Trade Commission, the following statement, in a prominent location on the front of the billing statement, disclosed clearly and conspicuously: Minimum Payment Warning: Making only the required minimum payment will increase the interest you pay and the time it takes to repay your balance. For example, making only the typical 5% minimum monthly payment on a balance of $300 at an interest rate of 17% would take 24 months to repay the balance in full. For an estimate of the time it would take to repay your balance, making only minimum monthly payments, call the Federal Trade Commission at this toll-free number: XXXXXX. (the blank space to be filled in by the creditor). A creditor who is subject to this subparagraph shall not be subject to subparagraph (A) or (B).
(D) Notwithstanding subparagraph (A), (B), or (C), in complying with any such subparagraph, a creditor may substitute an example based on an interest rate that is greater than 17 percent. Any creditor that is subject to subparagraph (B) may elect to provide the disclosure required under subparagraph (A) in lieu of the disclosure required under subparagraph (B).
(E) The Board shall, by rule, periodically recalculate, as necessary, the interest rate and repayment period under subparagraphs (A), (B), and (C).
(F)
(i) The toll-free telephone number disclosed by a creditor or the Federal Trade Commission under subparagraph (A), (B), or (G), as appropriate, may be a toll-free telephone number established and maintained by the creditor or the Federal Trade Commission, as appropriate, or may be a toll-free telephone number established and maintained by a third party for use by the creditor or multiple creditors or the Federal Trade Commission, as appropriate. The toll-free telephone number may connect consumers to an automated device through which consumers may obtain information described in subparagraph (A), (B), or (C), by inputting information using a touch-tone telephone or similar device, if consumers whose telephones are not equipped to use such automated device are provided the opportunity to be connected to an individual from whom the information described in subparagraph (A), (B), or (C), as applicable, may be obtained. A person that receives a request for information described in subparagraph (A), (B), or (C) from an obligor through the toll-free telephone number disclosed under subparagraph (A), (B), or (C), as applicable, shall disclose in response to such request only the information set forth in the table promulgated by the Board under subparagraph (H)(i).
(ii)
(I) The Board shall establish and maintain for a period not to exceed 24 months following the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, a toll-free telephone number, or provide a toll-free telephone number established and maintained by a third party, for use by creditors that are depository institutions (as defined in section
1813 of title
12), including a Federal credit union or State credit union (as defined in section
1752 of title
12), with total assets not exceeding $250,000,000. The toll-free telephone number may connect consumers to an automated device through which consumers may obtain information described in subparagraph (A) or (B), as applicable, by inputting information using a touch-tone telephone or similar device, if consumers whose telephones are not equipped to use such automated device are provided the opportunity to be connected to an individual from whom the information described in subparagraph (A) or (B), as applicable, may be obtained. A person that receives a request for information described in subparagraph (A) or (B) from an obligor through the toll-free telephone number disclosed under subparagraph (A) or (B), as applicable, shall disclose in response to such request only the information set forth in the table promulgated by the Board under subparagraph (H)(i). The dollar amount contained in this subclause shall be adjusted according to an indexing mechanism established by the Board.
(II) Not later than 6 months prior to the expiration of the 24-month period referenced in subclause (I), the Board shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the program described in subclause (I).
(G) The Federal Trade Commission shall establish and maintain a toll-free number for the purpose of providing to consumers the information required to be disclosed under subparagraph (C).
(H) The Board shall
(i) establish a detailed table illustrating the approximate number of months that it would take to repay an outstanding balance if a consumer pays only the required minimum monthly payments and if no other advances are made, which table shall clearly present standardized information to be used to disclose the information required to be disclosed under subparagraph (A), (B), or (C), as applicable;
(ii) establish the table required under clause (i) by assuming
(I) a significant number of different annual percentage rates;
(II) a significant number of different account balances;
(III) a significant number of different minimum payment amounts; and
(IV) that only minimum monthly payments are made and no additional extensions of credit are obtained; and
(iii) promulgate regulations that provide instructional guidance regarding the manner in which the information contained in the table established under clause (i) should be used in responding to the request of an obligor for any information required to be disclosed under subparagraph (A), (B), or (C).
(I) The disclosure requirements of this paragraph do not apply to any charge card account, the primary purpose of which is to require payment of charges in full each month.
(J) A creditor that maintains a toll-free telephone number for the purpose of providing customers with the actual number of months that it will take to repay the customers outstanding balance is not subject to the requirements of subparagraph (A) or (B).
(K) A creditor that maintains a toll-free telephone number for the purpose of providing customers with the actual number of months that it will take to repay an outstanding balance shall include the following statement on each billing statement: Making only the minimum payment will increase the interest you pay and the time it takes to repay your balance. For more information, call this toll-free number: XXXXXX. (the blank space to be filled in by the creditor).
(12) If a late payment fee is to be imposed due to the failure of the obligor to make payment on or before a required payment due date, the following shall be stated clearly and conspicuously on the billing statement:
(A) The date on which that payment is due or, if different, the earliest date on which a late payment fee may be charged.
(B) The amount of the late payment fee to be imposed if payment is made after such date.
(c) Disclosure in credit and charge card applications and solicitations
(1) Direct mail applications and solicitations
(A) Information in tabular format Any application to open a credit card account for any person under an open end consumer credit plan, or a solicitation to open such an account without requiring an application, that is mailed to consumers shall disclose the following information, subject to subsection (e) of this section and section
1632 (c) of this title:
(i) Annual percentage rates
(I) Each annual percentage rate applicable to extensions of credit under such credit plan.
(II) Where an extension of credit is subject to a variable rate, the fact that the rate is variable, the annual percentage rate in effect at the time of the mailing, and how the rate is determined.
(III) Where more than one rate applies, the range of balances to which each rate applies.
(ii) Annual and other fees
(I) Any annual fee, other periodic fee, or membership fee imposed for the issuance or availability of a credit card, including any account maintenance fee or other charge imposed based on activity or inactivity for the account during the billing cycle.
(II) Any minimum finance charge imposed for each period during which any extension of credit which is subject to a finance charge is outstanding.
(III) Any transaction charge imposed in connection with use of the card to purchase goods or services.
(iii) Grace period
(I) The date by which or the period within which any credit extended under such credit plan for purchases of goods or services must be repaid to avoid incurring a finance charge, and, if no such period is offered, such fact shall be clearly stated.
(II) If the length of such grace period varies, the card issuer may disclose the range of days in the grace period, the minimum number of days in the grace period, or the average number of days in the grace period, if the disclosure is identified as such.
(iv) Balance calculation method
(I) The name of the balance calculation method used in determining the balance on which the finance charge is computed if the method used has been defined by the Board, or a detailed explanation of the balance calculation method used if the method has not been so defined.
(II) In prescribing regulations to carry out this clause, the Board shall define and name not more than the 5 balance calculation methods determined by the Board to be the most commonly used methods.
(B) Other information In addition to the information required to be disclosed under subparagraph (A), each application or solicitation to which such subparagraph applies shall disclose clearly and conspicuously the following information, subject to subsections (e) and (f) of this section:
(i) Cash advance fee Any fee imposed for an extension of credit in the form of cash.
(ii) Late fee Any fee imposed for a late payment.
(iii) Over-the-limit fee Any fee imposed in connection with an extension of credit in excess of the amount of credit authorized to be extended with respect to such account.
(2) Telephone solicitations
(A) In general
In any telephone solicitation to open a credit card account for any person under an open end consumer credit plan, the person making the solicitation shall orally disclose the information described in paragraph (1)(A).
(B) Exception Subparagraph (A) shall not apply to any telephone solicitation if
(i) the credit card issuer
(I) does not impose any fee described in paragraph (1)(A)(ii)(I); or
(II) does not impose any fee in connection with telephone solicitations unless the consumer signifies acceptance by using the card;
(ii) the card issuer discloses clearly and conspicuously in writing the information described in paragraph (1) within 30 days after the consumer requests the card, but in no event later than the date of delivery of the card; and
(iii) the card issuer discloses clearly and conspicuously that the consumer is not obligated to accept the card or account and the consumer will not be obligated to pay any of the fees or charges disclosed unless the consumer elects to accept the card or account by using the card.
(3) Applications and solicitations by other means
(A) In general
Any application to open a credit card account for any person under an open end consumer credit plan, and any solicitation to open such an account without requiring an application, that is made available to the public or contained in catalogs, magazines, or other publications shall meet the disclosure requirements of subparagraph (B), (C), or (D).
(B) Specific information An application or solicitation described in subparagraph (A) meets the requirement of this subparagraph if such application or solicitation contains
(i) the information
(I) described in paragraph (1)(A) in the form required under section
1632 (c) of this title, subject to subsection (e) of this section, and
(II) described in paragraph (1)(B) in a clear and conspicuous form, subject to subsections (e) and (f) of this section;
(ii) a statement, in a conspicuous and prominent location on the application or solicitation, that
(I) the information is accurate as of the date the application or solicitation was printed;
(II) the information contained in the application or solicitation is subject to change after such date; and
(III) the applicant should contact the creditor for information on any change in the information contained in the application or solicitation since it was printed;
(iii) a clear and conspicuous disclosure of the date the application or solicitation was printed; and
(iv) a disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided in the application or solicitation since it was printed.
(C) General information without any specific term An application or solicitation described in subparagraph (A) meets the requirement of this subparagraph if such application or solicitation
(i) contains a statement, in a conspicuous and prominent location on the application or solicitation, that
(I) there are costs associated with the use of credit cards; and
(II) the applicant may contact the creditor to request disclosure of specific information of such costs by calling a toll free telephone number or by writing to an address, specified in the application;
(ii) contains a disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll free telephone number and a mailing address at which the applicant may contact the creditor to obtain such information; and
(iii) does not contain any of the items described in paragraph (1).
(D) Applications or solicitations containing subsection (a) disclosures An application or solicitation meets the requirement of this subparagraph if it contains, or is accompanied by
(i) the disclosures required by paragraphs (1) through (6) of subsection (a) of this section;
(ii) the disclosures required by subparagraphs (A) and (B) of paragraph (1) of this subsection included clearly and conspiciously
(except that the provisions of section
1632 (c) of this title shall not apply); and
(iii) a toll free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided.
(E) Prompt response to information requests
Upon receipt of a request for any of the information referred to in subparagraph (B), (C), or (D), the card issuer or the agent of such issuer shall promptly disclose all of the information described in paragraph (1).
(4) Charge card applications and solicitations
(A) In general Any application or solicitation to open a charge card account shall disclose clearly and conspicuously the following information in the form required by section
1632 (c) of this title, subject to subsection (e) of this section:
(i) Any annual fee, other periodic fee, or membership fee imposed for the issuance or availability of the charge card, including any account maintenance fee or other charge imposed based on activity or inactivity for the account during the billing cycle.
(ii) Any transaction charge imposed in connection with use of the card to purchase goods or services.
(iii) A statement that charges incurred by use of the charge card are due and payable upon receipt of a periodic statement rendered for such charge card account.
(B) Other information In addition to the information required to be disclosed under subparagraph (A), each written application or solicitation to which such subparagraph applies shall disclose clearly and conspicuously the following information, subject to subsections (e) and (f) of this section:
(i) Cash advance fee Any fee imposed for an extension of credit in the form of cash.
(ii) Late fee Any fee imposed for a late payment.
(iii) Over-the-limit fee Any fee imposed in connection with an extension of credit in excess of the amount of credit authorized to be extended with respect to such account.
(C) Applications and solicitations by other means Any application to open a charge card account, and any solicitation to open such an account without requiring an application, that is made available to the public or contained in catalogs, magazines, or other publications shall contain
(i) the information
(I) described in subparagraph (A) in the form required under section
1632 (c) of this title, subject to subsection (e) of this section, and
(II) described in subparagraph (B) in a clear and conspicuous form, subject to subsections (e) and (f) of this section;
(ii) a statement, in a conspicuous and prominent location on the application or solicitation, that
(I) the information is accurate as of the date the application or solicitation was printed;
(II) the information contained in the application or solicitation is subject to change after such date; and
(III) the applicant should contact the creditor for information on any change in the information contained in the application or solicitation since it was printed;
(iii) a clear and conspicuous disclosure of the date the application or solicitation was printed; and
(iv) a disclosure, in a conspicuous and prominent location on the application or solicitation, of a toll free telephone number or a mailing address at which the applicant may contact the creditor to obtain any change in the information provided in the application or solicitation since it was printed.
(D) Issuers of charge cards which provide access to open end consumer credit plans If a charge card permits the card holder to receive an extension of credit under an open end consumer credit plan, which is not maintained by the charge card issuer, the charge card issuer may provide the information described in subparagraphs (A) and (B) in the form required by such subparagraphs in lieu of the information required to be provided under paragraph (1), (2), or (3) with respect to any credit extended under such plan, if the charge card issuer discloses clearly and conspicuously to the consumer in the application or solicitation that
(i) the charge card issuer will make an independent decision as to whether to issue the card;
(ii) the charge card may arrive before the decision is made with respect to an extension of credit under an open end consumer credit plan; and
(iii) approval by the charge card issuer does not constitute approval by the issuer of the extension of credit.
The information required to be disclosed under paragraph (1) shall be provided to the charge card holder by the creditor which maintains such open end consumer credit plan before the first extension of credit under such plan.
(E) Charge card defined
For the purposes of this subsection, the term charge card means a card, plate, or other single credit device that may be used from time to time to obtain credit which is not subject to a finance charge.
(5) Regulatory authority of the Board
The Board may, by regulation, require the disclosure of information in addition to that otherwise required by this subsection or subsection (d) of this section, and modify any disclosure of information required by this subsection or subsection (d) of this section, in any application to open a credit card account for any person under an open end consumer credit plan or any application to open a charge card account for any person, or a solicitation to open any such account without requiring an application, if the Board determines that such action is necessary to carry out the purposes of, or prevent evasions of, any paragraph of this subsection.
(6) Additional notice concerning “introductory rates”
(A) In general Except as provided in subparagraph (B), an application or solicitation to open a credit card account and all promotional materials accompanying such application or solicitation for which a disclosure is required under paragraph (1), and that offers a temporary annual percentage rate of interest, shall
(i) use the term introductory in immediate proximity to each listing of the temporary annual percentage rate applicable to such account, which term shall appear clearly and conspicuously;
(ii) if the annual percentage rate of interest that will apply after the end of the temporary rate period will be a fixed rate, state in a clear and conspicuous manner in a prominent location closely proximate to the first listing of the temporary annual percentage rate (other than a listing of the temporary annual percentage rate in the tabular format described in section
1632 (c) of this title), the time period in which the introductory period will end and the annual percentage rate that will apply after the end of the introductory period; and
(iii) if the annual percentage rate that will apply after the end of the temporary rate period will vary in accordance with an index, state in a clear and conspicuous manner in a prominent location closely proximate to the first listing of the temporary annual percentage rate (other than a listing in the tabular format prescribed by section
1632 (c) of this title), the time period in which the introductory period will end and the rate that will apply after that, based on an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation.
(B) Exception
Clauses (ii) and (iii) of subparagraph (A) do not apply with respect to any listing of a temporary annual percentage rate on an envelope or other enclosure in which an application or solicitation to open a credit card account is mailed.
(C) Conditions for introductory rates An application or solicitation to open a credit card account for which a disclosure is required under paragraph (1), and that offers a temporary annual percentage rate of interest shall, if that rate of interest is revocable under any circumstance or upon any event, clearly and conspicuously disclose, in a prominent manner on or with such application or solicitation
(i) a general description of the circumstances that may result in the revocation of the temporary annual percentage rate; and
(ii) if the annual percentage rate that will apply upon the revocation of the temporary annual percentage rate
(I) will be a fixed rate, the annual percentage rate that will apply upon the revocation of the temporary annual percentage rate; or
(II) will vary in accordance with an index, the rate that will apply after the temporary rate, based on an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation.
(D) Definitions In this paragraph
(i) the terms temporary annual percentage rate of interest and temporary annual percentage rate mean any rate of interest applicable to a credit card account for an introductory period of less than 1 year, if that rate is less than an annual percentage rate that was in effect within 60 days before the date of mailing the application or solicitation; and
(ii) the term introductory period means the maximum time period for which the temporary annual percentage rate may be applicable.
(E) Relation to other disclosure requirements
Nothing in this paragraph may be construed to supersede subsection (a) of section 1632 of this title, or any disclosure required by paragraph (1) or any other provision of this subsection.
(7) Internet-based solicitations
(A) In general In any solicitation to open a credit card account for any person under an open end consumer credit plan using the Internet or other interactive computer service, the person making the solicitation shall clearly and conspicuously disclose
(i) the information described in subparagraphs (A) and (B) of paragraph (1); and
(ii) the information described in paragraph (6).
(B) Form of disclosure The disclosures required by subparagraph (A) shall be
(i) readily accessible to consumers in close proximity to the solicitation to open a credit card account; and
(ii) updated regularly to reflect the current policies, terms, and fee amounts applicable to the credit card account.
(C) Definitions For purposes of this paragraph
(i) the term Internet means the international computer network of both Federal and non-Federal interoperable packet switched data networks; and
(ii) the term interactive computer service means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions.
(g) Insurance in connection with certain open end credit card plans
(1) Change in insurance carrier
Whenever a card issuer that offers any guarantee or insurance for repayment of all or part of the outstanding balance of an open end credit card plan proposes to change the person providing that guarantee or insurance, the card issuer shall send each insured consumer written notice of the proposed change not less than 30 days prior to the change, including notice of any increase in the rate or substantial decrease in coverage or service which will result from such change. Such notice may be included on or with the monthly statement provided to the consumer prior to the month in which the proposed change would take effect.
(2) Notice of new insurance coverage
In any case in which a proposed change described in paragraph (1) occurs, the insured consumer shall be given the name and address of the new guarantor or insurer and a copy of the policy or group certificate containing the basic terms and conditions, including the premium rate to be charged.
(3) Right to discontinue guarantee or insurance
The notices required under paragraphs (1) and (2) shall each include a statement that the consumer has the option to discontinue the insurance or guarantee.
(4) No preemption of State law
No provision of this subsection shall be construed as superseding any provision of State law which is applicable to the regulation of insurance.
(5) Board definition of substantial decrease in coverage or service
The Board shall define, in regulations, what constitutes a substantial decrease in coverage or service for purposes of paragraph (1).
