(a) Furnishing statement of billing rights--(1)
Annual statement. The creditor shall mail or deliver the billing rights
statement required by Sec. 226.6(d) at least once per calendar year, at
intervals of not less than 6 months nor more than 18 months, either to
all consumers or to each consumer entitled to receive a periodic statement
under Sec. 226.5(b)(2) for any one billing cycle.
(2) Alternative summary statement. As an alternative
to paragraph (a)(1) of this section, the creditor may mail or deliver,
on or with each periodic statement, a statement substantially similar to
that in appendix G.
(b) Disclosures for supplemental credit devices
and additional features--(1) If a creditor, within 30 days after mailing
or delivering the initial disclosures under Sec. 226.6(a), adds a credit
feature to the consumer's account or mails or delivers to the consumer
a credit device for which the finance charge terms are the same as those
previously disclosed, no additional disclosures are necessary. After 30
days, if the creditor adds a credit feature or furnishes a credit device
(other than as a renewal, resupply, or the original issuance of a credit
card) on the same finance charge terms, the creditor shall disclose, before
the consumer uses the feature or device for the first time, that it is
for use in obtaining credit under the terms previously disclosed.
(2) Whenever a credit feature is added or
a credit device is mailed or delivered, and the finance charge terms for
the feature or device differ from disclosures previously given, the disclosures
required by Sec. 226.6(a) that are applicable to the added feature or device
shall be given before the consumer uses the feature or device for the first
time.
(c) Change in terms--(1) Written notice required.
Whenever any term required to be disclosed under Sec. 226.6 is changed
or the required minimum periodic payment is increased, the creditor shall
mail or deliver written notice of the change to each consumer who may be
affected. The notice shall be mailed or delivered at least 15 days prior
to the effective date of the change. The 15-day timing requirement does
not apply if the change has been agreed to by the consumer, or if a periodic
rate or other finance charge is increased because of the consumer's delinquency
or default; the notice shall be given, however, before the effective date
of the change.
(2) Notice not required. No notice under this
section is required when the change involves late payment charges, charges
for documentary evidence, or over-the-limit charges; a reduction of any
component of a finance or other charge; suspension of future credit privileges
or termination of an account or plan; or when the change results from an
agreement involving a court proceeding, or from the consumer's default
or delinquency (other than an increase in the periodic rate or other finance
charge).
(3) Notice for home equity plans. If a creditor
prohibits additional extensions of credit or reduces the credit limit applicable
to a home equity plan pursuant to Sec. 226.5b(f)(3)(i) or Sec. 226.5b(f)(3)(vi),
the creditor shall mail or deliver written notice of the action to each
consumer who will be affected. The notice must be provided not later than
three business days after the action is taken and shall contain specific
reasons for the action. If the creditor requires the consumer to request
reinstatement of credit privileges, the notice also shall state that fact.
(d) Finance charge imposed at time of transaction.
(1) Any person, other than the card issuer, who imposes a finance charge
at the time of honoring a consumer's credit card, shall disclose the amount
of that finance charge prior to its imposition.
(2) The card issuer, if other than the person
honoring the consumer's credit card, shall have no responsibility for the
disclosure required by paragraph (d)(1) of this section, and shall not
consider any such charge for purposes of Secs. 226.5a, 226.6 and 226.7.
(e) Disclosures upon renewal of credit or
charge card. (1) Notice prior to renewal. Except as provided in paragraph
(e)(2) of this section, a card issuer that imposes any annual or other
periodic fee to renew a credit or charge card account of the type subject
to Sec. 226.5a, including any fee based on account activity or inactivity,
shall mail or deliver written notice of the renewal to the cardholder.
The notice shall be provided at least 30 days or one billing cycle, whichever
is less, before the mailing or the delivery of the periodic statement on
which the renewal fee is initially charged to the account. The notice shall
contain the following information:
(i) The disclosures contained in Sec. 226.5a(b)
(1) through (7) that would apply if the account were renewed;20a
and
20
a These disclosures need not be provided in tabular format or in a prominent
location.
(ii) How and when the cardholder may terminate
credit availability under the account to avoid paying the renewal fee.
(2) Delayed notice. The disclosures required
by paragraph (e)(1) of this section may be provided later than the time
in paragraph (e)(1) of this section, but no later than the mailing or the
delivery of the periodic statement on which the renewal fee is initially
charged to the account, if the card issuer also discloses at that time
that:
(i) The cardholder has 30 days from the time
the periodic statement is mailed or delivered to avoid paying the fee or
to have the fee recredited if the cardholder terminates credit availability
under the account; and
(ii) The cardholder may use the card during
the interim period without having to pay the fee.
(3) Notification on periodic statements. The
disclosures required by this paragraph may be made on or with a periodic
statement. If any of the disclosures are provided on the back of a periodic
statement, the card issuer shall include a reference to those disclosures
on the front of the statement.
(f) Change in credit card account insurance
provided--(1) Notice prior to change. If a credit card issuer plans to
change the provider of insurance for repayment of all or part of the outstanding
balance of an open-end credit card account of the type subject to Sec.
226.5a, the card issuer shall mail or deliver the cardholder written notice
of the change not less than 30 days before the change in providers occurs.
The notice shall also include the following items, to the extent applicable:
(i) Any increase in the rate that will result
from the change;
(ii) Any substantial decrease in coverage
that will result from the change; and
(iii) A statement that the cardholder may
discontinue the insurance.
(2) Notice when change in provider occurs.
If a change described in paragraph (f)(1) of this section occurs, the card
issuer shall provide the cardholder with a written notice no later than
30 days after the change, including the following items, to the extent
applicable:
(i) The name and address of the new insurance
provider;
(ii) A copy of the new policy or group certificate
containing the basic terms of the insurance, including the rate to be charged;
and
(iii) A statement that the cardholder may
discontinue the insurance.
(3) Substantial decrease in coverage. For
purposes of this paragraph, a substantial decrease in coverage is a decrease
in a significant term of coverage that might reasonably be expected to
affect the cardholder's decision to continue the insurance. Significant
terms of coverage include, for example, the following:
(i) Type of coverage provided;
(ii) Age at which coverage terminates or becomes
more restrictive;
(iii) Maximum insurable loan balance, maximum
periodic benefit payment, maximum number of payments, or other term affecting
the dollar amount of coverage or benefits provided;
(iv) Eligibility requirements and number and
identity of persons covered;
(v) Definition of a key term of coverage such
as disability;
(vi) Exclusions from or limitations on coverage;
and
(vii) Waiting periods and whether coverage
is retroactive.
(4) Combined notification. The notices required
by paragraph (f) (1) and (2) of this section may be combined provided the
timing requirement of paragraph (f)(1) of this section is met. The notices
may be provided on or with a periodic statement.
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