Effective as of 2/22/2010, with mandatory compliance as of 7/1/2010, except as noted below.
§ 226.9 Subsequent disclosure requirements.
(a) Furnishing statement of billing rights . (1) Annual statement . The creditor
shall mail or deliver the billing rights statement required by § 226.6(a)(5) and (b)(5)(iii)
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 § 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 Model Form G-4 or Model Form G-4(A) in appendix G to this
part, as applicable. Creditors offering home-equity plans subject to the requirements of
§ 226.5b may use either Model Form, at their option.
(b) Disclosures for supplemental credit access devices and additional features.(1) If a creditor, within 30 days after mailing or delivering the account-opening
disclosures under § 226.6(a)(1) or (b)(3)(ii)(A), as applicable, adds a credit feature to the
consumer’s account or mails or delivers to the consumer a credit access device, including
but not limited to checks that access a credit card account, for which the finance charge
terms are the same as those previously disclosed, no additional disclosures are necessary.
Except as provided in paragraph (b)(3) of this section, after 30 days, if the creditor adds a
credit feature or furnishes a credit access 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) Except as provided in paragraph (b)(3) of this section, whenever a credit
feature is added or a credit access device is mailed or delivered to the consumer, and the
finance charge terms for the feature or device differ from disclosures previously given,
the disclosures required by § 226.6(a)(1) or (b)(3)(ii)(A), as applicable, that are
applicable to the added feature or device shall be given before the consumer uses the
feature or device for the first time.
(3) Checks that access a credit card account.
(i) Disclosures. For open-end plans not subject to the requirements of § 226.5b,
if checks that can be used to access a credit card account are provided more than 30 days
after account-opening disclosures under § 226.6(b) are mailed or delivered, or are
provided within 30 days of the account-opening disclosures and the finance charge terms
for the checks differ from the finance charge terms previously disclosed, the creditor shall
disclose on the front of the page containing the checks the following terms in the form of
a table with the headings, content, and form substantially similar to Sample G-19 in
appendix G to this part:
(A) If a promotional rate, as that term is defined in §226.16(g)(2)(i) applies to the checks:
( 1 ) The promotional rate and the time period during which the promotional rate will remain in effect;
( 2 ) The type of rate that will apply (such as whether the purchase or cash advance
rate applies) after the promotional rate expires, and the annual percentage rate that will
apply after the promotional rate expires. For a variable-rate account, a creditor must
disclose an annual percentage rate based on the applicable index or formula in
accordance with the accuracy requirements set forth in paragraph (b)(3)(ii) of this
section; and
( 3 ) The date, if any, by which the consumer must use the checks in order to
qualify for the promotional rate. 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.
(B) If no promotional rate applies to the checks:
( 1 ) The type of rate that will apply to the checks and the applicable annual
percentage rate. For a variable-rate account, a creditor must disclose an annual
percentage rate based on the applicable index or formula in accordance with the accuracy
requirements set forth in paragraph (b)(3)(ii) of this section.
( 2 ) [Reserved]
(C) Any transaction fees applicable to the checks disclosed under
§ 226.6(b)(2)(iv); and
(D) Whether or not a grace period is given within which any credit extended by
use of the checks may be repaid without incurring a finance charge due to a periodic
interest rate. When disclosing whether there is a grace period, the phrase “How to Avoid
Paying Interest on Check Transactions” shall be used as the row heading when a grace
period applies to credit extended by the use of the checks. When disclosing the fact that
no grace period exists for credit extended by use of the checks, the phrase “Paying
Interest” shall be used as the row heading.
(ii) Accuracy. The disclosures in paragraph (b)(3)(i) of this section must be accurate as of the time the disclosures are mailed or delivered. A variable annual percentage rate is accurate if it was in effect within 60 days of when the disclosures are mailed or delivered.
(c) Change in terms.(1) Rules affecting home-equity plans. (i) Written notice required. For home-equity plans subject to the requirements of § 226.5b, whenever any term required to be
disclosed under §226.6(a) 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; the notice shall be given, however, before the
effective date of the change.
(ii) Notice not required. For home-equity plans subject to the requirements of
§ 226.5b, a creditor is not required to provide notice under this section when the change
involves a reduction of any component of a finance or other charge or when the change
results from an agreement involving a court proceeding.
(iii) Notice to restrict credit. dit. For home-equity plans subject to the requirements
of § 226.5b, if the creditor prohibits additional extensions of credit or reduces the credit
limit pursuant to § 226.5b(f)(3)(i) or (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.
[Note: The provisions of § 226.9(c)(2) except for 226.9(c)(2)(iv)(D) carry a mandatory compliance date of 2/22/2010. The applicable text is in red below.]
(2) Rules affecting open-end (not home-secured) plans. (i) Changes where written advance notice is required. (A) General. For plans other than home-equity plans
subject to the requirements of § 226.5b, except as provided in paragraphs (c)(2)(i)(B),
(c)(2)(iii) and (c)(2)(v) of this section, when a significant change in account terms as
described in paragraph (c)(2)(ii) of this section is made to a term required to be disclosed
under § 226.6(b)(3), (b)(4) or (b)(5) or the required minimum periodic payment is
increased, a creditor must provide a written notice of the change at least 45 days prior to
the effective date of the change to each consumer who may be affected. The 45-day
timing requirement does not apply if the consumer has agreed to a particular change; the
notice shall be given, however, before the effective date of the change. Increases in the
rate applicable to a consumer’s account due to delinquency, default or as a penalty
described in paragraph (g) of this section that are not due to a change in the contractual
terms of the consumer’s account must be disclosed pursuant to paragraph (g) of this
section instead of paragraph (c)(2) of this section.
(B) Changes agreed to by the consumer. A notice of change in terms is required,
but it may be mailed or delivered as late as the effective date of the change if the
consumer agrees to the particular change. This paragraph (c)(2)(i)(B) applies only when
a consumer substitutes collateral or when the creditor can advance additional credit only
if a change relatively unique to that consumer is made, such as the consumer’s providing
additional security or paying an increased minimum payment amount. The following are
not considered agreements between the consumer and the creditor for purposes of this
paragraph (c)(2)(i)(B): the consumer’s general acceptance of the creditor’s contract
reservation of the right to change terms; the consumer’s use of the account (which might
imply acceptance of its terms under state law); the consumer’s acceptance of a unilateral
term change that is not particular to that consumer, but rather is of general applicability to
consumers with that type of account; and the consumer’s request to reopen a closed
account or to upgrade an existing account to another account offered by the creditor with
different credit or other features.
(ii) Significant changes in account terms. For purposes of this section, a
“significant change in account terms” means a change to a term required to be disclosed
under § 226.6(b)(1) and (b)(2), an increase in the required minimum periodic payment, or
the acquisition of a security interest.
(iii) Charges not covered by § 226.6(b)(1) and (b)(2). Except as provided in
paragraph (c)(2)(vi) of this section, if a creditor increases any component of a charge, or
introduces a new charge, required to be disclosed under § 226.6(b)(3) that is not a
significant change in account terms as described in paragraph (c)(2)(ii) of this section, a
creditor may either, at its option:
(A) Comply with the requirements of paragraph (c)(2)(i) of this section; or
(B) Provide notice of the amount of the charge before the consumer agrees to or becomes obligated to pay the charge, at a time and in a manner that a consumer would be likely to notice the disclosure of the charge. The notice may be provided orally or in writing.
(iv) Disclosure requirements. (A) Significant changes in account terms. If a
creditor makes a significant change in account terms as described in paragraph (c)(2)(ii)
of this section, the notice provided pursuant to paragraph (c)(2)(i) of this section must
provide the following information:
( 1 ) A summary of the changes made to terms required by § 226.6(b)(1) and
(b)(2), a description of any increase in the required minimum periodic payment, and a
description of any security interest being acquired by the creditor;
( 2 ) A statement that changes are being made to the account;
( 3 ) For accounts other than credit card accounts under an open-end (not home-
secured) consumer credit plan subject to § 226.9(c)(2)(iv)(B), a statement indicating the
consumer has the right to opt out of these changes, if applicable, and a reference to
additional information describing the opt-out right provided in the notice, if applicable;
( 4 ) The date the changes will become effective;
( 5 ) If applicable, a statement that the consumer may find additional information about the summarized changes, and other changes to the account, in the notice;
( 6 ) If the creditor is changing a rate on the account, other than a penalty rate, a statement that if a penalty rate currently applies to the consumer's account, the new rate described in the notice will not apply to the consumer's account until the consumer's account balances are no longer subject to the penalty rate; and
( 7 ) If the change in terms being disclosed is an increase in an annual percentage rate, the balances to which the increased rate will be applied. If applicable, a statement identifying the balances to which the current rate will continue to apply as of the effective date of the change in terms.
(B) Right to reject for credit card accounts under an open-end (not home-secured)
consumer credit plan. In addition to the disclosures in paragraph (c)(2)(iv)(A) of this
section, if a card issuer makes a significant change in account terms on a credit card
account under an open-end (not home-secured) consumer credit plan, the creditor must
generally provide the following information on the notice provided pursuant to paragraph
(c)(2)(i) of this section. This information is not required to be provided in the case of an
increase in the required minimum periodic payment, a change in an annual percentage
rate applicable to a consumer’s account, a change in the balance computation method
applicable to consumer’s account necessary to comply with § 226.54, or when the change
results from the creditor not receiving the consumer’s required minimum periodic
payment within 60 days after the due date for that payment:
(1) A statement that the consumer has the right to reject the change or changes
prior to the effective date of the changes, unless the consumer fails to make a required
minimum periodic payment within 60 days after the due date for that payment;
(2) Instructions for rejecting the change or changes, and a toll-free telephone
number that the consumer may use to notify the creditor of the rejection; and
(3) If applicable, a statement that if the consumer rejects the change or changes,
the consumer’s ability to use the account for further advances will be terminated or
suspended.
(C) Changes resulting from failure to make minimum periodic payment within 60
days from due date for credit card accounts under an open-end (not home-secured)
consumer credit plan. For a credit card account under an open-end (not home-secured)
consumer credit plan, if the significant change required to be disclosed pursuant to
paragraph (c)(2)(i) of this section is an increase in an annual percentage rate or a fee or
charge required to be disclosed under § 226.6(b)(2)(ii), (b)(2)(iii), or (b)(2)(xii) based on
the consumer’s failure to make a minimum periodic payment within 60 days from the due
date for that payment, the notice provided pursuant to paragraph (c)(2)(i) of this section
must also contain the following information:
(1) A statement of the reason for the increase; and
(2) That the increase will cease to apply to transactions that occurred prior to or
within 14 days of provision of the notice, if the creditor receives six consecutive required
minimum periodic payments on or before the payment due date, beginning with the first
payment due following the effective date of the increase.
(D) Format requirements. ( 1 ) Tabular format. The summary of changes
described in paragraph (c)(2)(iv)(A)(1) of this section must be in a tabular format (except
for a summary of any increase in the required minimum periodic payment), with headings
and format substantially similar to any of the account-opening tables found in G-17 in
appendix G to this part. The table must disclose the changed term and information
relevant to the change, if that relevant information is required by § 226.6(b)(1) and (b)(2).
The new terms shall be described in the same level of detail as required when disclosing
the terms under § 226.6(b)(2).
( 2 ) Notice included with periodic statement. If a notice required by paragraph
(c)(2)(i) of this section is included on or with a periodic statement, the information
described in paragraph (c)(2)(iv)(A)(1) of this section must be disclosed on the front of
any page of the statement. The summary of changes described in paragraph
(c)(2)(iv)(A)(1) of this section must immediately follow the information described in
paragraph (c)(2)(iv)(A)(2) through (c)(2)(iv)(A)(7) and, if applicable, paragraphs
(c)(2)(iv)(B) and (c)(2)(iv)(C) of this section, and be substantially similar to the format
shown in Sample G-20 or G-21 in appendix G to this part.
( 3 ) Notice provided separately from periodic statement. If a notice required by
paragraph (c)(2)(i) of this section is not included on or with a periodic statement, the
information described in paragraph (c)(2)(iv)(A)(1) of this section must, at the creditor’s
option, be disclosed on the front of the first page of the notice or segregated on a separate
page from other information given with the notice. The summary of changes required to
be in a table pursuant to paragraph (c)(2)(iv)(A)(1) of this section may be on more than
one page, and may use both the front and reverse sides, so long as the table begins on the
front of the first page of the notice and there is a reference on the first page indicating that
the table continues on the following page. The summary of changes described in
paragraph (c)(2)(iv)(A)(1) of this section must immediately follow the information
described in paragraph (c)(2)(iv)(A)(2) through (c)(2)(iv)(A)(7) and, if applicable,
paragraphs (c)(2)(iv)(B) and (c)(2)(iv)(C), of this section, substantially similar to the
format shown in Sample G-20 or G-21 in appendix G to this part.
(v) Notice not required. For open-end plans (other than home equity plans
subject to the requirements of § 226.5b) a creditor is not required to provide notice under
this section:
(A) When the change involves charges for documentary evidence; a reduction of
any component of a finance or other charge; suspension of future credit privileges (except
as provided in paragraph (c)(2)(vi) of this section) or termination of an account or plan;
when the change results from an agreement involving a court proceeding; when the
change is an extension of the grace period; or if the change is applicable only to checks
that access a credit card account and the changed terms are disclosed on or with the
checks in accordance with paragraph (b)(3) of this section;
(B) When the change is an increase in an annual percentage rate upon the
expiration of a specified period of time, provided that:
(1) Prior to commencement of that period, the creditor disclosed in writing to the
consumer, in a clear and conspicuous manner, the length of the period and the annual
percentage rate that would apply after expiration of the period;
(2) The disclosure of the length of the period and the annual percentage rate that
would apply after expiration of the period are set forth in close proximity and in equal
prominence to the first listing of the disclosure of the rate that applies during the
specified period of time; and
(3) The annual percentage rate that applies after that period does not exceed the
rate disclosed pursuant to paragraph (c)(2)(v)(B)(1) of this paragraph or, if the rate
disclosed pursuant to paragraph (c)(2)(v)(B)(1) of this section was a variable rate, the rate
following any such increase is a variable rate determined by the same formula (index and
margin) that was used to calculate the variable rate disclosed pursuant to paragraph
(c)(2)(v)(B)(1);
(C) When the change is an increase in a variable annual percentage rate in
accordance with a credit card agreement that provides for changes in the rate according to
operation of an index that is not under the control of the creditor and is available to the
general public; or
(D) When the change is an increase in an annual percentage rate, a fee or charge
required to be disclosed under § 226.6(b)(2)(ii), (b)(2)(iii), or (b)(2)(xii), or the required
minimum periodic payment due to the completion of a workout or temporary hardship
arrangement by the consumer or the consumer’s failure to comply with the terms of such
an arrangement, provided that:
(1) The annual percentage rate or fee or charge applicable to a category of
transactions or the required minimum periodic payment following any such increase does
not exceed the rate or fee or charge or required minimum periodic payment that applied
to that category of transactions prior to commencement of the arrangement or, if the rate
that applied to a category of transactions prior to the commencement of the workout or
temporary hardship arrangement was a variable rate, the rate following any such increase
is a variable rate determined by the same formula (index and margin) that applied to the
category of transactions prior to commencement of the workout or temporary hardship
arrangement; and
(2) The creditor has provided the consumer, prior to the commencement of such
arrangement, with a clear and conspicuous disclosure of the terms of the arrangement
(including any increases due to such completion or failure). This disclosure must
generally be provided in writing. However, a creditor may provide the disclosure of the
terms of the arrangement orally by telephone, provided that the creditor mails or delivers
a written disclosure of the terms of the arrangement to the consumer as soon as
reasonably practicable after the oral disclosure is provided.
(vi) Reduction of the credit limit. For open-end plans that are not subject to the
requirements of § 226.5b, if a creditor decreases the credit limit on an account, advance
notice of the decrease must be provided before an over-the-limit fee or a penalty rate can
be imposed solely as a result of the consumer exceeding the newly decreased credit limit.
Notice shall be provided in writing or orally at least 45 days prior to imposing the over-
the-limit fee or penalty rate and shall state that the credit limit on the account has been or
will be decreased.
(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, 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 the purposes of §§226.5a, 226.6 and 226.7.
[Note: The mandatory compliance date for § 226.9(e) (in red below) is 2/22/2010.]
(e) Disclosures upon renewal of credit or charge card. (1) Notice prior to renewal. A card issuer that imposes any annual or other periodic fee to renew a credit or
charge card account of the type subject to § 226.5a, including any fee based on account
activity or inactivity or any card issuer that has changed or amended any term of a
cardholder’s account required to be disclosed under § 226.6(b)(1) and (b)(2) that has not
previously been disclosed to the consumer, shall mail or deliver written notice of the
renewal to the cardholder. If the card issuer imposes any annual or other periodic fee for
renewal, 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 any renewal
fee is initially charged to the account. If the card issuer has changed or amended any
term required to be disclosed under § 226.6(b)(1) and (b)(2) and such changed or
amended term has not previously been disclosed to the consumer, the notice shall be
provided at least 30 days prior to the scheduled renewal date of the consumer’s credit or
charge card. The notice shall contain the following information:
(i) The disclosures contained in §226.5a(b)(1) through (b)(7) that would apply if the account were renewed;20aand
20a[Reserved]
(ii) How and when the cardholder may terminate credit availability under the account to avoid paying the renewal fee, if applicable.
(2) 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 provider. (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
§ 226.5a, the card issuer shall mail or deliver to the cardholder written notice of the
change not less than 30 days before the change in provider 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.
[Note: The mandatory compliance date for § 226.9(g), except for paragraph 226.9(g)(3)(ii), is 2/22/2010. The affected sections are in red below.]
(g) Increase in rates due to delinquency or default or as a penalty.(1) Increases subject to this section. For plans other than home-equity plans subject to the
requirements of § 226.5b, except as provided in paragraph (g)(4) of this section, a
creditor must provide a written notice to each consumer who may be affected when:
(i) A rate is increased due to the consumer's delinquency or default; or
(ii) A rate is increased as a penalty for one or more events specified in the account agreement, such as making a late payment or obtaining an extension of credit that exceeds the credit limit.
(2) Timing of written notice. Whenever any notice is required to be given pursuant to paragraph (g)(1) of this section, the creditor shall provide written notice of the increase in rates at least 45 days prior to the effective date of the increase. The notice must be provided after the occurrence of the events described in paragraphs (g)(1)(i) and (g)(1)(ii) of this section that trigger the imposition of the rate increase.
(3)(i) Disclosure requirements for rate increases. (A) General. If a creditor is increasing the rate due to delinquency or default or as a penalty, the creditor must provide the following information on the notice sent pursuant to paragraph (g)(1) of this section:
(1) A statement that the delinquency or default rate or penalty rate, as applicable, has been triggered;
(2) The date on which the delinquency or default rate or penalty rate will apply;
(3) The circumstances under which the delinquency or default rate or penalty rate, as applicable, will cease to apply to the consumer's account, or that the delinquency or default rate or penalty rate will remain in effect for a potentially indefinite time period;
(4) A statement indicating to which balances the delinquency or default rate or penalty rate will be applied; and
(5) If applicable, a description of any balances to which the current rate will continue to apply as of the effective date of the rate increase, unless a consumer fails to make a minimum periodic payment within 60 days from the due date for that payment.
(B) Rate increases resulting from failure to make minimum periodic payment
within 60 days from due date. For a credit card account under an open-end (not home-
secured) consumer credit plan, if the rate increase required to be disclosed pursuant to
paragraph (g)(1) of this section is an increase pursuant to § 226.55(b)(4) based on the
consumer’s failure to make a minimum periodic payment within 60 days from the due
date for that payment, the notice provided pursuant to paragraph (g)(1) of this section
must also contain the following information:
(1) A statement of the reason for the increase; and
(2) That the increase will cease to apply to transactions that occurred prior to or
within 14 days of provision of the notice, if the creditor receives six consecutive required
minimum periodic payments on or before the payment due date, beginning with the first
payment due following the effective date of the increase.
(ii) Format requirements. (A) If a notice required by paragraph (g)(1) of this
section is included on or with a periodic statement, the information described in
paragraph (g)(3)(i) of this section must be in the form of a table and provided on the front
of any page of the periodic statement, above the notice described in paragraph (c)(2)(iv)
of this section if that notice is provided on the same statement.
(B) If a notice required by paragraph (g)(1) of this section is not included on or
with a periodic statement, the information described in paragraph (g)(3)(i) of this section
must be disclosed on the front of the first page of the notice. Only information related to
the increase in the rate to a penalty rate may be included with the notice, except that this
notice may be combined with a notice described in paragraph (c)(2)(iv) or (g)(4) of this
section.
(4) Exceptions for decrease in credit limit. A creditor is not required to provide a
notice pursuant to paragraph (g)(1) of this section prior to increasing the rate for
obtaining an extension of credit that exceeds the credit limit, provided that:
(i) The creditor provides at least 45 days in advance of imposing the penalty rate
a notice, in writing, that includes:
(A) A statement that the credit limit on the account has been or will be decreased.
(B) A statement indicating the date on which the penalty rate will apply, if the
outstanding balance exceeds the credit limit as of that date;
(C) A statement that the penalty rate will not be imposed on the date specified in
paragraph (g)(4)(i)(B) of this section, if the outstanding balance does not exceed the
credit limit as of that date;
(D) The circumstances under which the penalty rate, if applied, will cease to
apply to the account, or that the penalty rate, if applied, will remain in effect for a
potentially indefinite time period;
(E) A statement indicating to which balances the penalty rate may be applied; and
(F) If applicable, a description of any balances to which the current rate will
continue to apply as of the effective date of the rate increase, unless the consumer fails to
make a minimum periodic payment within 60 days from the due date for that payment; and
(ii) The creditor does not increase the rate applicable to the consumer’s account
to the penalty rate if the outstanding balance does not exceed the credit limit on the date
set forth in the notice and described in paragraph (g)(4)(i)(B) of this section.
(iii) (A) If a notice provided pursuant to paragraph (g)(4)(i) of this section is
included on or with a periodic statement, the information described in paragraph (g)(4)(i)
of this section must be in the form of a table and provided on the front of any page of the
periodic statement; or
(B) If a notice required by paragraph (g)(4)(i) of this section is not included on or
with a periodic statement, the information described in paragraph (g)(4)(i) of this section
must be disclosed on the front of the first page of the notice. Only information related to
the reduction in credit limit may be included with the notice, except that this notice may
be combined with a notice described in paragraph (c)(2)(iv) or (g)(1) of this section.
[Note: The mandatory compliance date for § 226.9(h) (in red below) is 2/22/2010.]
(h) Consumer rejection of certain significant changes in terms. (1) Right to
reject. If paragraph (c)(2)(iv)(B) of this section requires disclosure of the consumer’s
right to reject a significant change to an account term, the consumer may reject that
change by notifying the creditor of the rejection before the effective date of the change.
(2) Effect of rejection. If a creditor is notified of a rejection of a significant
change to an account term as provided in paragraph (h)(1) of this section, the creditor
must not:
(i) Apply the change to the account;
(ii) Impose a fee or charge or treat the account as in default solely as a result of
the rejection; or
(iii) Require repayment of the balance on the account using a method that is less
beneficial to the consumer than one of the methods listed in § 226.55(c)(2).
(3) Exception. Section 226.9(h) does not apply when the creditor has not
received the consumer’s required minimum periodic payment within 60 days after the
due date for that payment.
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