Fees for reissuing a lost or stolen card. For purposes of 1026.5(b)(2)(ii)(A)(1), the payment due date for a credit card account under an open-end (not home-secured) consumer credit plan is the date the card issuer is required to disclose on the periodic statement pursuant to 1026.7(b)(11)(i)(A). This section does not apply to: 1. See interpretation of 5(e) Effect of Subsequent Events in Supplement I, Explore guides to help you plan for big financial goals, Subpart B - Open-End Credit 1026.51026.16, Subpart C - Closed-End Credit 1026.171026.24, Subpart D - Miscellaneous 1026.251026.30, Subpart E - Special Rules for Certain Home Mortgage Transactions 1026.311026.45, Subpart F - Special Rules for Private Education Loans 1026.461026.48, Subpart G - Special Rules Applicable to Credit Card Accounts and Open-End Credit Offered to College Students 1026.511026.61, Supplement I to Part 1026 - Official Interpretations, Official interpretation of 5(a) Form of Disclosures, Official interpretation of Paragraph 5(a)(1)(ii)(A), Official interpretation of Paragraph 5(a)(1)(iii), Official interpretation of 5(a)(2) Terminology, Official interpretation of 5(b) Time of Disclosures, Official interpretation of 5(b)(1)(i) General Rule, Official interpretation of 5(b)(1)(ii) Charges Imposed as Part of an Open-End (Not Home-Secured) Plan, Official interpretation of 5(b)(1)(iii) Telephone Purchases, Official interpretation of 5(b)(1)(iv) Membership Fees, Official interpretation of 5(b)(2) Periodic Statements, Official interpretation of 5(b)(2)(i) Statement Required, Official interpretation of 5(b)(2)(ii) Timing Requirements, Official interpretation of 5(c) Basis of Disclosures and Use of Estimates, Official interpretation of 5(d) Multiple Creditors; Multiple Consumers, Official interpretation of 5(e) Effect of Subsequent Events. Under 1026.5(d): i. Periodic rates shall not be disclosed in the table. These rules are not implemented in Regulation Z (although they were formerly implemented in 1026.60(f)). ), See interpretation of 60(b)(9) Late Payment Fee in Supplement I. Section 127(c)(4)(D) of the Truth in Lending Act (15 U.S.C. , et seq., and its implementing regulation, Regulation Z (12 CFR 1026 (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. 2. Definition A credit card disclosure is a document that outlines all of the fees, costs, interest rates, and terms that a customer could experience while using the credit card. 1026.22 Determination of annual percentage rate. flexibility will facilitate credit card issuers' ability to quickly assist consumers during the pandemic. Should clearly refer to the disclosure provision it replaces. (ii) Certain disclosures for home-equity plans must precede other disclosures and must be given in accordance with the requirements of 1026.40(a). (5) Grace period. Information permitted in the table. In some cases, one rate may be based on another rate on the account. The description of the specific event or events that may result in an increased rate should be brief. For example, 1026.60(b)(1)(v) would apply if the issuer considers the type of purchase the consumer is making at the time the consumer opens the account, in combination with the consumer's creditworthiness, to determine the rate for which the consumer may qualify at account opening. (3) Fees based on a percentage. This is so whether the fee is a per transaction fee to make a purchase, or a flat fee for each day (or other period) the consumer has an outstanding balance of purchase transactions. The information about costs of the Card is accurate as of the effective date of _____. Where the rate is not tied to an index or formula, the card issuer must disclose the rate that will apply after the introductory rate expires. Substitution or replacement of credit card accounts. The grace period applies to the $500 balance because the balance for the March billing cycle was paid in full on April 25. If any of these terms that trigger additional disclosures are mentioned in an . Consumer request to pick up periodic statements. Card issuers may, therefore, omit inapplicable headings and their corresponding boxes in the table. The maximum limit of $100 for the cash advance fee must be highlighted in bold. How grace period disclosure is made. Purchases. (iii) The disclosures required by this subpart may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. For rates that are not introductory rates or employee preferential rates, if a rate may increase as a penalty for one or more events specified in the account agreement, such as a late payment or an extension of credit that exceeds the credit limit, the card issuer must disclose the increased rate that would apply, a brief description of the event or events that may result in the increased rate, and a brief description of how long the increased rate will remain in effect. The creditor may, however, be required to provide a new disclosure(s) under 1026.9(c). 1026.26 Use of annual percentage rate in oral disclosures. iii. A card issuer may use this option only if the issuer does not include on or with the application or solicitation any statement that refers to the credit disclosures required by 1026.60(b). In describing how the applicable rate will be determined, the card issuer must identify in the table the type of index or formula used, such as the prime rate. For example, assume the same facts as above, except that the $15 will be transferred from the covered separate credit feature to the asset feature, and a transaction of $25 is debited from the asset feature of the prepaid account. Multiple accounts. For example, assume that the consumer has $10 of funds in the asset feature of the prepaid account and initiates a transaction with a merchant to obtain goods or services with the hybrid prepaid-credit card for $25. In making this disclosure, the card issuer may make such modifications as are necessary to more accurately reflect the circumstances of repayment under the account. For example, if the circumstances in which an introductory rate could be revoked are the same as the event or events that may trigger a penalty rate as described in 1026.60(b)(1)(iv)(A), the issuer may refer to the actions listed in the Penalty APR row, in describing the circumstances in which the introductory rate could be revoked. 4. Disclosing charges before the fee is imposed. Any fee imposed to transfer an outstanding balance. (1) Oral disclosure. Maximum limits on fees. Example. ii. Creditors may impose costs to return subsequent purchases of merchandise under the plan, or to return merchandise purchased by other means such as a credit card issued by another creditor. Requirements for Electronic Provision of Written Disclosures Regulation Z generally requires that credit card issuers provide disclosures to consumers in writing.2 Where underlying law, such as Regulation Z, requires a written disclosure to a iii. 1. A creditor that provides written materials to a consumer about a particular service but provides a fee disclosure for another service not promoted in such materials would not meet the standard. Disclosures may be made to either obligor on a joint account. An issuer is not required to disclose pursuant to 1026.60(b)(8) any charges imposed on a cardholder by an institution other than the card issuer for the use of the other institution's ATM in a shared or interchange system. 1. The disclosures could be located on the same Web page as the application or reply form (whether or not they appear on the initial screen), if the application or reply form contains a clear and conspicuous reference to the location of the disclosures and indicates that the disclosures contain rate, fee, and other cost information, as applicable; C. Card issuers could provide a link to the electronic disclosures on or with the application (or reply form) as long as consumers cannot bypass the disclosures before submitting the application or reply form. B. i. 1. (3) Credit and charge card application and solicitation disclosures. Among other requirements, the Act requires creditors who deal with consumers to make certain written disclosures concerning finance charges and related aspects of credit transactions (including disclosing an annual percentage rate) and comply with other mandates, and requires advertisements to include certain disclosures. 1026.21 Treatment of credit balances. Reactivation of suspended account. Employee preferential rates. To illustrate, if a card issuer invites consumers to call a toll-free number or to return a response card to obtain an application, the application sent in response to the consumer's request need not contain the disclosures required under 1026.60. The card issuer initiates the contact and at the same time takes application information over the telephone. (i) The applicable information in paragraph (b) of this section; (ii) The date the required information was printed, including a statement that the required information was accurate as of that date and is subject to change after that date; and. Rate based on another rate on the account. Information provided in writing need not be in a tabular format. When changes in a creditor's plan affect required disclosures, the creditor may use inserts with outdated disclosure forms. Charge card accounts. 1026.46 Special disclosure requirements for private education loans. 2. advertisement for a credit card, additional disclosures must also be included in the advertisement. The description of how long the increased rate will remain in effect also should be brief. 1026.14 Determination of annual percentage rate. See interpretation of 5(b)(1)(iii) Telephone Purchases in Supplement I. If fees for issuance or availability are optional, these fees should not be considered in determining whether the disclosure must be given. 1. A card issuer's response to a consumer's request for credit information may be provided orally or in writing, regardless of the manner in which the consumer's request is received by the issuer. iii. Rules concerning accuracy of the disclosures required by 1026.60(b), including variable rate disclosures, are stated in 1026.60(c)(2), (d)(3), and (e)(4), as applicable. 2. i. (B) The following disclosures need not be in a retainable form: Disclosures that need not be written under paragraph (a)(1)(ii)(A) of this section; disclosures for credit and charge card applications and solicitations under 1026.60; home-equity disclosures under 1026.40(d); the alternative summary billing-rights statement under 1026.9(a)(2); the credit and charge card renewal disclosures required under 1026.9(e); and the payment requirements under 1026.10(b), except as provided in 1026.7(b)(13). A card issuer may not disclose any applicable limitations on rate increases or decreases in the table, such as describing that the rate will not go below a certain rate or higher than a certain rate. (3) Fixed finance charge; minimum interest charge. An issuer is required to disclose directly beneath the table the circumstances under which an introductory rate, as that term is defined in 1026.16(g)(2)(ii), may be revoked, and the rate that will apply after the revocation. ii. May be used only until the supply of outdated forms is exhausted. ii. (9) Late payment fee. 1026.37 Content of disclosures for certain mortgage transactions (Loan Estimate). 1026.38 Content of disclosures for certain mortgage transactions (Closing Disclosure). In this example, the $10 fee disclosure would not be disclosed in bold, but the $120 annualized amount must be disclosed in bold. For example, if a consumer telephones a card issuer to discuss a particular service, a creditor would meet the standard if the creditor clearly and conspicuously discloses the fee associated with the service that is the topic of the telephone call orally to the consumer. In general. Provisions in 1026.60(b) and its commentary provide that certain information must appear or is permitted to appear in a table. (1) Definition of solicitation. Section 1026.60 generally requires that credit disclosures be contained in application forms and solicitations initiated by a card issuer to open a credit or charge card account. A firm offer of credit as defined in section 603(l) of the Fair Credit Reporting Act (15 U.S.C. Except for disclosures given electronically, disclosures in 1026.60(b) that are required to be provided in a table must be prominently located on or with the application or solicitation. Until January 1, 2013, issuers may substitute for this reference a reference to the Web site established by the Board of Governors of the Federal Reserve System. If the purchase rate is a variable rate, then the penalty rate also is a variable rate. 3. (b) Required disclosures. See interpretation of 60(b)(14) Available Credit in Supplement I. 1026.38 Content of disclosures for certain mortgage transactions (Closing Disclosure). Fees for optional services in addition to basic membership privileges in a credit or charge card account (for example, travel insurance or card-registration services) shall not be disclosed in the table if the basic account may be opened without paying such fees. Home-equity plans. For credit card accounts under an open-end (not home-secured) consumer credit plan, a card issuer must adopt reasonable procedures designed to ensure that: (1) Periodic statements are mailed or delivered at least 21 days prior to the payment due date disclosed on the statement pursuant to 1026.7(b)(11)(i)(A); and. (vi) Certain disclosures accompanying checks that access a credit card account must be provided in a tabular format in accordance with the requirements of 1026.9(b)(3). Creditors offering home-equity plans subject to the requirements of 1026.40 are subject to the requirements of 1026.40(h) regarding the collection of fees. The card issuer shall disclose orally the information in paragraphs (b)(1) through (7) and (b)(14) of this section, to the extent applicable, in a telephone application or solicitation initiated by the card issuer. Multiple creditors. (Charges imposed as part of an open-end (not home-secured plan) that are not specified under 1026.6(b)(2) may alternatively be disclosed in electronic form; see the commentary to 1026.5(a)(1)(ii)(A).) The following methods may be described by name. See interpretation of 60(b) Required Disclosures in Supplement I. Congrats to all the new NCCOs! If an account has been closed (for example, due to inactivity, cancellation, or expiration) and then is reopened, new account-opening disclosures are required. When a card issuer substitutes or replaces an existing credit card account with another credit card account, the card issuer must either provide notice of the terms of the new account consistent with 1026.6(b) or provide notice of the changes in the terms of the existing account consistent with 1026.9(c)(2). In rescindable transactions, however, separate disclosures must be given to each consumer who has the right to rescind under 1026.15. If the initial rate is an introductory rate, as that term is defined in 1026.16(g)(2)(ii), the card issuer must disclose in the table the introductory rate, the time period during which the introductory rate will remain in effect, and must use the term introductory or intro in immediate proximity to the introductory rate. 7001 et seq.). In disclosing the terms finance charge and annual percentage rate more conspicuously for home-equity plans subject to 1026.40, only the words finance charge and annual percentage rate should be accentuated. (B) Open-end consumer credit plans. ), 2. iii. If a consumer has paid or promised to pay a membership fee including an application fee excludable from the finance charge under 1026.4(c)(1) before receiving account-opening disclosures, the consumer may, after receiving the disclosures, reject the plan and not be obligated for the membership fee, application fee, or any other fee or charge. 1. The Home Equity Loan Consumer Protection Act requires creditors to provide similar disclosures for open-ended credit secured by the borrower's homecommonly known as a home equity line of credit, or HELOC. (ii) The alternative disclosures under paragraph (d)(2) of this section generally must be accurate as of the time they are mailed or delivered. Regulation Z also was amended to implement section 1204 of the Competitive Equality Banking Act of 1987, and in 1988, to include adjustable rate mortgage loan disclosure requirements. According to Experian, a credit score below 670 is considered "fair," while a credit . For example, if an issuer may increase an introductory rate because the account is more than 60 days late, the issuer should describe this circumstance directly beneath the table as make a late payment. In addition, if the circumstances in which an introductory rate could be revoked are already listed elsewhere in the table, the issuer is not required to repeat the circumstances again, but may refer to those circumstances in a clear and conspicuous manner. A fee for a transaction will be treated as a fee to make a purchase under 1026.60(b)(4) in cases where a consumer uses a hybrid prepaid-credit card as defined in 1026.61 to make a purchase to obtain goods or services from a merchant and credit is drawn directly from a covered separate credit feature accessed by the hybrid prepaid-credit card without transferring funds into the asset feature of the prepaid account to cover the amount of the purchase. Consumer disclosures and consumer credit reports are both used to determine the creditworthiness of a potential borrower. See interpretation of 60(e) Applications and Solicitations Made Available to General Public in Supplement I. The card issuer shall provide disclosures, to the extent applicable, on or with an application or solicitation that is made available to the general public, including one contained in a catalog, magazine, or other generally available publication. For example, if an issuer offers a rate of 8.99% on purchases for six months, 10.99% on purchases for the following six months, and 14.99% on purchases after the first year, the term introductory need only be used to describe the 8.99% rate. For example, if the penalty rate could be up to 28.99 percent, but the issuer may impose a penalty rate that is less than that rate depending on factors at the time the penalty rate is imposed, the issuer may disclose the penalty rate as up to 28.99 percent. 1. Disclosure of the month and year fulfills the requirement to disclose the date an application was printed. The consumer receives the first advance. In disclosing the annual percentage rate as required by 1026.6(a)(1)(ii), the term annual percentage rate is subject to the more conspicuous rule. 1026.48 Limitations on private education loans. In calculating the available credit to disclose in the table, the issuer must consider all fees for the issuance or availability of credit described in 1026.60(b)(2), and any security deposit, that will be imposed and charged to the account when the account is opened, such as one-time issuance and set-up fees. Content. (See the commentary to 1026.17 on converting open-end credit to closed-end credit.). Generally, disclosures need only be given as applicable. Overview. Assume that, for a credit card account under an open-end (not home-secured) consumer credit plan, a periodic statement mailed on April 4 states that a required minimum periodic payment of $50 is due on April 25. Charges that are imposed as part of an open-end (not home-secured) plan and are not required to be disclosed under 1026.6(b)(2) may be disclosed after account opening but before the consumer agrees to pay or becomes obligated to pay for the charge, provided they are disclosed at a time and in a manner that a consumer would be likely to notice them. Calculating available credit. (See 1026.60(f) and accompanying commentary for rules relating to in-person applications and solicitations.). (2) Adjusted balance. See interpretation of 5(b) Time of Disclosures in Supplement I. A single, complete set of disclosures must be provided, rather than partial disclosures from several creditors. See interpretation of 60(a)(5) Exceptions in Supplement I. (4) Accuracy. A card issuer complies with the requirements of this paragraph if the issuer provides disclosures in accordance with paragraph (c)(1) or (e)(1) of this section. (iii) Telephone purchases. (i) Certain disclosures for credit and charge card applications and solicitations must be provided in a tabular format in accordance with the requirements of 1026.60(a)(2). (credit union) Certificate of Deposits (CDs) or Share Certificates disclosure, including early withdrawal . 4. (A) In general. If the creditor will honor checks used after such date but will apply an annual percentage rate other than the promotional rate, the creditor must disclose this fact and the type of annual percentage rate that will apply if the consumer uses the checks after such date. Any insert: i. When disclosures must be furnished before the first transaction, account-opening disclosures must be delivered before the consumer becomes obligated on the plan. ii. If a consumer accesses a credit card application or solicitation electronically (other than as described under ii. iii. (ii) Average daily balance (excluding new purchases). Determining the method. credit card issuers from extending credit without assessing the consumer's ability to pay, with . An issuer may substitute the account-opening summary table described in 1026.6(b)(1) in lieu of the disclosures specified in 1026.60(d)(2)(ii). Mailed publications. Consistent with 1026.60(b)(3), the Bureau will publish adjustments to the $1.00 threshold amount, as appropriate. 1026.20 Disclosure requirements regarding post-consummation events. The right to reject the plan referenced in this paragraph is the same as the right to reject the plan described in 1026.5(b)(1)(iv). 4. 1026.9 Subsequent disclosure requirements. Mailing or delivery of periodic statements. 5. (ii) The creditor does not treat as late for any purpose a required minimum periodic payment received by the creditor within 14 days after mailing or delivery of the periodic statement. Any fixed finance charge and a brief description of the charge. See interpretation of 60(a)(2) Form of Disclosures; Tabular Format in Supplement I. 1. Rates that depend on consumer's creditworthiness. On April 20, the card issuer receives a payment of $30 and no additional payment is received on or before April 25. Consistent with paragraph (b)(1) of this section, the premium initial rate for purchases must be in at least 16-point type. In addition, a card issuer may use a single application form as a take-one (in racks in public locations, for example) and for direct mailings, if the card issuer complies with the requirements of 1026.60(c) even when the form is used as a take-one - that is, by presenting the required 1026.60 disclosures in a tabular format. Use of inserts. Termination of draw privileges. Section 1026.60(a)(2)(iv) provides that any maximum limits on fee amounts must be disclosed in bold text. If the term introductory is in the same phrase as the introductory rate, as that term is defined in 1026.16(g)(2)(ii), it will be deemed to be in immediate proximity of the listing. Other factors. See interpretation of 5(d) Multiple Creditors; Multiple Consumers in Supplement I. Return policies. 1. Accordingly, 1026.5(b)(2)(ii)(B)(1)(i) requires the creditor to have reasonable procedures designed to ensure that the periodic statement reflecting the $500 balance is mailed or delivered on or before May 4. For example, when the terms appear as part of the explanations required under 1026.6(a)(1)(iii) and (a)(1)(iv), they may be equally conspicuous as the disclosures required under 1026.6(a)(1)(ii) and 1026.7(a)(7). A consumer applies in person for a car loan at a financial institution and the loan officer invites the consumer to apply for a credit or charge card account; the consumer accepts the invitation and submits an application. The prohibitions in 1026.5(b)(2)(ii)(A)(2) and (b)(2)(B)(2)(ii) on treating a payment as late for any purpose apply only during the 21-day or 14-day period (as applicable) following mailing or delivery of the periodic statement stating the due date for that payment and only if the required minimum periodic payment is received within that period. A card issuer disclosing a periodic fee must disclose the amount of the fee, how frequently it will be imposed, and the annualized amount of the fee. Creditors must provide such disclosures at a time and in a manner that a consumer would be likely to notice them. The terms need not be more conspicuous when used for periodic statement disclosures under 1026.7(a)(4) and for advertisements under 1026.16. (See Sample G-10(C) in the disclosure labeled Loss of Introductory APR directly beneath the table.) Variable-rate accounts - fact that rate varies and how the rate will be determined. See interpretation of 60(b)(15) Web Site Reference in Supplement I, (c) Direct mail and electronic applications and solicitations , 1. The card issuer also must disclose the rate that would otherwise apply to the account pursuant to paragraph (b)(1) of this section. In disclosing the available credit, the issuer shall round down the available credit amount to the nearest whole dollar. (v) For an application or a solicitation that is accessed by the consumer in electronic form, the disclosures required under this section may be provided to the consumer in electronic form on or with the application or solicitation. If the right of rescission under 1026.15 is applicable, however, the disclosures required by 1026.6 and 1026.15(b) shall be made to each consumer having the right to rescind. A card issuer that complies with 1026.5(b)(2)(ii)(A) as discussed above with respect to a charge card account has also complied with 1026.5(b)(2)(ii)(B)(2). The following examples illustrate these rules: i. The card issuer shall disclose the items in this paragraph on or with an application or a solicitation in accordance with the requirements of paragraphs (c), (d), (e)(1), or (f) of this section. See interpretation of 5(b)(1)(iv) Membership Fees in Supplement I. 1026.1 Authority, purpose, coverage, organization, enforcement, and liability. An issuer is required to disclose directly beneath the table the circumstances under which an employee preferential rate may be revoked, and the rate that will apply after the revocation. The tabular format is required for 1026.60(b) disclosures given pursuant to 1026.60(c), (d)(2), (e)(1) and (f). 1026.54 Limitations on the imposition of finance charges. 3. When disclosures must be more conspicuous. (iv) When a tabular format is required, any annual percentage rate required to be disclosed pursuant to paragraph (b)(1) of this section, any introductory rate required to be disclosed pursuant to paragraph (b)(1)(ii) of this section, any rate that will apply after a premium initial rate expires required to be disclosed under paragraph (b)(1)(iii) of this section, and any fee or percentage amounts or maximum limits on fee amounts disclosed pursuant to paragraphs (b)(2), (b)(4), (b)(8) through (b)(13) of this section must be disclosed in bold text. Rule Technical Specifications for Credit Card Agreement and Data Submissions Required Under TILA and the CARD Act (Regulation Z) A Rule by the Consumer Financial Protection Bureau on 08/23/2021 Document Details Printed version: PDF Publication Date: 08/23/2021 Agency: Bureau of Consumer Financial Protection Dates: Applications provided to a consumer upon request are not covered by 1026.60, even if the request is made in response to the card issuer's invitation to apply for a card account. (i) The oral disclosures under paragraph (d)(1) of this section must be accurate as of the time they are given. Using the account. If a card issuer requires fees for the issuance or availability of credit described in paragraph (b)(2) of this section, or requires a security deposit for such credit, and the total amount of those required fees and/or security deposit that will be imposed and charged to the account when the account is opened is 15 percent or more of the minimum credit limit for the card, a card issuer must disclose the available credit remaining after these fees or security deposit are debited to the account, assuming that the consumer receives the minimum credit limit. (ii) Charges imposed as part of an open-end (not home-secured) plan. The explanation need not be as detailed as that required for the disclosures under 1026.6(b)(4)(i)(D). (2) Regardless of whether a grace period applies to the account: (i) Periodic statements are mailed or delivered at least 14 days prior to the date on which the required minimum periodic payment must be received in order to avoid being treated as late for any purpose; and.
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