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#1608894 - 09/26/11 08:41 PM Regulation Z Change (Credit Card Act)
LGoforth Offline
Junior Member
Joined: Feb 2005
Posts: 25
KY
In March, the Federal Reserve Board issued technical corrections to Regulation Z for the Credit Card Act of 2009 concerning the number of days between the billing date and due date of open-end consumer credit plans. Effective October 1, 2011, open ended credit plans must meet the following requirements before a late charge can be assessed on the account: (1) for plans that offer a grace period, you must offer a minimum of 21 days between the billing date and due date of a payment plus any additional time for rendering and mailing before late charges can be assessed to the account; (2) for plans that don't offer a grace period you must offer a minimum of 21 days between the billing date and due date of a payment. If we do not assess late charges on our cash reserve accounts, would this change apply?

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#1608975 - 09/26/11 09:38 PM Re: Regulation Z Change (Credit Card Act) LGoforth
Tesla Offline
Power Poster
Joined: Nov 2003
Posts: 3,726
This is the definition a grace period: For purposes of § 226.5(b)(2)(ii)(B), “grace period” means a period within which any credit extended may be repaid without incurring a finance charge due to a periodic interest rate. A deferred interest or similar promotional program under which the consumer is not obligated to pay interest that accrues on a balance if that balance is paid in full prior to the expiration of a specified period of time is not a grace period for purposes of § 226.5(b)(2)(ii)(B). Similarly, a period following the payment due date during which a late payment fee will not be imposed is not a grace period for purposes of § 226.5(b)(2)(ii)(B). See comments 7(b)(11)-1, 7(b)(11)-2, and 54(a)(1)-2.

Based on that definition, you will be required to comply one way or another (depending on how you handle finance charges).
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