Regulation Z
§ 226.11 Treatment of credit balances; account termination.
The Federal Reserve Board's Regulation Z (12 CFR Part 226) has been republished effective December 30, 2011, at 12 CFR Part 1026 as one of the regulations transferred to the Consumer Financial Protection Bureau under the Dodd-Frank Act. This section of the FRB regulation was republished as §1026.11 of the Bureau's regulation.
(a) Credit balances. When a credit balance in excess of $1 is created on a credit account (through transmittal of funds to a creditor in excess of the total balance due on an account, through rebates of unearned finance charges or insurance premiums, or through amounts otherwise owed to or held for the benefit of the consumer), the creditor shall—
(1) Credit the amount of the credit balance to the consumer's account;
(2) Refund any part of the remaining credit balance within seven business days from receipt of a written request from the consumer;
(3) Make a good faith effort to refund to the consumer by cash, check, or money order, or credit to a deposit account of the consumer, any part of the credit balance remaining in the account for more than six months. No further action is required if the consumer's current location is not known to the creditor and cannot be traced through the consumer's last known address or telephone number.
(b) Account termination. (1) A creditor shall not terminate an account prior to its expiration date solely because the consumer does not incur a finance charge.
(2) Nothing in paragraph (b)(1) of this section prohibits a creditor from terminating an account that is inactive for three or more consecutive months. An account is inactive for purposes of this paragraph if no credit has been extended (such as by purchase, cash advance or balance transfer) and if the account has no outstanding balance.
(c) Timely settlement of estate debts. (1) General rule. (i) Reasonable policies
and procedures required. For credit card accounts under an open-end (not home-secured)
consumer credit plan, card issuers must adopt reasonable written policies and procedures
designed to ensure that an administrator of an estate of a deceased accountholder can
determine the amount of and pay any balance on the account in a timely manner.
(ii) Application to joint accounts. Paragraph (c) of this section does not apply to
the account of a deceased consumer if a joint accountholder remains on the account.
(2) Timely statement of balance. (i) Requirement. Upon request by the
administrator of an estate, a card issuer must provide the administrator with the amount
of the balance on a deceased consumer’s account in a timely manner.
(ii) Safe harbor. For purposes of paragraph (c)(2)(i) of this section, providing the
amount of the balance on the account within 30 days of receiving the request is deemed
to be timely.
(3) Limitations after receipt of request from administrator. (i) Limitation on fees
and increases in annual percentage rates. After receiving a request from the administrator
of an estate for the amount of the balance on a deceased consumer’s account, a card
issuer must not impose any fees on the account (such as a late fee, annual fee, or over-
the-limit fee) or increase any annual percentage rate, except as provided by
§ 226.55(b)(2).
(ii) Limitation on trailing or residual interest. A card issuer must waive or rebate
any additional finance charge due to a periodic interest rate if payment in full of the
balance disclosed pursuant to paragraph (c)(2) of this section is received within 30 days
after disclosure.
Privacy Policy Disclaimer Recommend This Site ! Contact Us
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.
Print Friendly!
Email This Article!
Discuss NOW!