15 U.S.C. § 1637 : US Code - Section 1637: Open end consumer credit plans

Search 15 U.S.C. § 1637 : US Code - Section 1637: Open end consumer credit plans

(a) Required disclosures by creditor
Before opening any account under an open end consumer credit
plan, the creditor shall disclose to the person to whom credit is
to be extended each of the following items, to the extent
applicable:
(1) The conditions under which a finance charge may be imposed,
including the time period (if any) within which any credit
extended may be repaid without incurring a finance charge, except
that the creditor may, at his election and without disclosure,
impose no such finance charge if payment is received after the
termination of such time period. If no such time period is
provided, the creditor shall disclose such fact.
(2) The method of determining the balance upon which a finance
charge will be imposed.
(3) The method of determining the amount of the finance charge,
including any minimum or fixed amount imposed as a finance
charge.
(4) Where one or more periodic rates may be used to compute the
finance charge, each such rate, the range of balances to which it
is applicable, and the corresponding nominal annual percentage
rate determined by multiplying the periodic rate by the number of
periods in a year.
(5) Identification of other charges which may be imposed as
part of the plan, and their method of computation, in accordance
with regulations of the Board.
(6) In cases where the credit is or will be secured, a
statement that a security interest has been or will be taken in
(A) the property purchased as part of the credit transaction, or
(B) property not purchased as part of the credit transaction
identified by item or type.
(7) A statement, in a form prescribed by regulations of the
Board of the protection provided by sections 1666 and 1666i of
this title to an obligor and the creditor's responsibilities
under sections 1666a and 1666i of this title. With respect to one
billing cycle per calendar year, at intervals of not less than
six months or more than eighteen months, the creditor shall
transmit such statement to each obligor to whom the creditor is
required to transmit a statement pursuant to subsection (b) of
this section for such billing cycle.
(8) In the case of any account under an open end consumer
credit plan which provides for any extension of credit which is
secured by the consumer's principal dwelling, any information
which -
(A) is required to be disclosed under section 1637a(a) of
this title; and
(B) the Board determines is not described in any other
paragraph of this subsection.
(b) Statement required with each billing cycle
The creditor of any account under an open end consumer credit
plan shall transmit to the obligor, for each billing cycle at the
end of which there is an outstanding balance in that account or
with respect to which a finance charge is imposed, a statement
setting forth each of the following items to the extent applicable:
(1) The outstanding balance in the account at the beginning of
the statement period.
(2) The amount and date of each extension of credit during the
period, and a brief identification, on or accompanying the
statement of each extension of credit in a form prescribed by the
Board sufficient to enable the obligor either to identify the
transaction or to relate it to copies of sales vouchers or
similar instruments previously furnished, except that a
creditor's failure to disclose such information in accordance
with this paragraph shall not be deemed a failure to comply with
this part or this subchapter if (A) the creditor maintains
procedures reasonably adapted to procure and provide such
information, and (B) the creditor responds to and treats any
inquiry for clarification or documentation as a billing error and
an erroneously billed amount under section 1666 of this title. In
lieu of complying with the requirements of the previous sentence,
in the case of any transaction in which the creditor and seller
are the same person, as defined by the Board, and such person's
open end credit plan has fewer than 15,000 accounts, the creditor
may elect to provide only the amount and date of each extension
of credit during the period and the seller's name and location
where the transaction took place if (A) a brief identification of
the transaction has been previously furnished, and (B) the
creditor responds to and treats any inquiry for clarification or
documentation as a billing error and an erroneously billed amount
under section 1666 of this title.
(3) The total amount credited to the account during the period.
(4) The amount of any finance charge added to the account
during the period, itemized to show the amounts, if any, due to
the application of percentage rates and the amount, if any,
imposed as a minimum or fixed charge.
(5) Where one or more periodic rates may be used to compute the
finance charge, each such rate, the range of balances to which it
is applicable, and, unless the annual percentage rate (determined
under section 1606(a)(2) of this title) is required to be
disclosed pursuant to paragraph (6), the corresponding nominal
annual percentage rate determined by multiplying the periodic
rate by the number of periods in a year.
(6) Where the total finance charge exceeds 50 cents for a
monthly or longer billing cycle, or the pro rata part of 50 cents
for a billing cycle shorter than monthly, the total finance
charge expressed as an annual percentage rate (determined under
section 1606(a)(2) of this title), except that if the finance
charge is the sum of two or more products of a rate times a
portion of the balance, the creditor may, in lieu of disclosing a
single rate for the total charge, disclose each such rate
expressed as an annual percentage rate, and the part of the
balance to which it is applicable.
(7) The balance on which the finance charge was computed and a
statement of how the balance was determined. If the balance is
determined without first deducting all credits during the period,
that fact and the amount of such payments shall also be
disclosed.
(8) The outstanding balance in the account at the end of the
period.
(9) The date by which or the period (if any) within which,
payment must be made to avoid additional finance charges, except
that the creditor may, at his election and without disclosure,
impose no such additional finance charge if payment is received
after such date or the termination of such period.
(10) The address to be used by the creditor for the purpose of
receiving billing inquiries from the obligor.
(11)(A) In the case of an open end credit plan that requires a
minimum monthly payment of not more than 4 percent of the balance
on which finance charges are accruing, the following statement,
located on the front of the billing statement, disclosed clearly
and conspicuously: "Minimum Payment Warning: Making only the
minimum payment will increase the interest you pay and the time
it takes to repay your balance. For example, making only the
typical 2% minimum monthly payment on a balance of $1,000 at an
interest rate of 17% would take 88 months to repay the balance in
full. For an estimate of the time it would take to repay your
balance, making only minimum payments, call this toll-free
number: ______." (the blank space to be filled in by the
creditor).
(B) In the case of an open end credit plan that requires a
minimum monthly payment of more than 4 percent of the balance on
which finance charges are accruing, the following statement, in a
prominent location on the front of the billing statement,
disclosed clearly and conspicuously: "Minimum Payment Warning:
Making only the required minimum payment will increase the
interest you pay and the time it takes to repay your balance.
Making a typical 5% minimum monthly payment on a balance of $300
at an interest rate of 17% would take 24 months to repay the
balance in full. For an estimate of the time it would take to
repay your balance, making only minimum monthly payments, call
this toll-free number: ______." (the blank space to be filled in
by the creditor).
(C) Notwithstanding subparagraphs (A) and (B), in the case of a
creditor with respect to which compliance with this subchapter is
enforced by the Federal Trade Commission, the following
statement, in a prominent location on the front of the billing
statement, disclosed clearly and conspicuously: "Minimum Payment
Warning: Making only the required minimum payment will increase
the interest you pay and the time it takes to repay your balance.
For example, making only the typical 5% minimum monthly payment
on a balance of $300 at an interest rate of 17% would take 24
months to repay the balance in full. For an estimate of the time
it would take to repay your balance, making only minimum monthly
payments, call the Federal Trade Commission at this toll-free
number: ______." (the blank space to be filled in by the
creditor). A creditor who is subject to this subparagraph shall
not be subject to subparagraph (A) or (B).
(D) Notwithstanding subparagraph (A), (B), or (C), in complying
with any such subparagraph, a creditor may substitute an example
based on an interest rate that is greater than 17 percent. Any
creditor that is subject to subparagraph (B) may elect to provide
the disclosure required under subparagraph (A) in lieu of the
disclosure required under subparagraph (B).
(E) The Board shall, by rule, periodically recalculate, as
necessary, the interest rate and repayment period under
subparagraphs (A), (B), and (C).
(F)(i) The toll-free telephone number disclosed by a creditor
or the Federal Trade Commission under subparagraph (A), (B), or
(G), as appropriate, may be a toll-free telephone number
established and maintained by the creditor or the Federal Trade
Commission, as appropriate, or may be a toll-free telephone
number established and maintained by a third party for use by the
creditor or multiple creditors or the Federal Trade Commission,
as appropriate. The toll-free telephone number may connect
consumers to an automated device through which consumers may
obtain information described in subparagraph (A), (B), or (C), by
inputting information using a touch-tone telephone or similar
device, if consumers whose telephones are not equipped to use
such automated device are provided the opportunity to be
connected to an individual from whom the information described in
subparagraph (A), (B), or (C), as applicable, may be obtained. A
person that receives a request for information described in
subparagraph (A), (B), or (C) from an obligor through the toll-
free telephone number disclosed under subparagraph (A), (B), or
(C), as applicable, shall disclose in response to such request
only the information set forth in the table promulgated by the
Board under subparagraph (H)(i).
(ii)(I) The Board shall establish and maintain for a period not
to exceed 24 months following the effective date of the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,
a toll-free telephone number, or provide a toll-free telephone
number established and maintained by a third party, for use by
creditors that are depository institutions (as defined in section
1813 of title 12), including a Federal credit union or State
credit union (as defined in section 1752 of title 12), with total
assets not exceeding $250,000,000. The toll-free telephone number
may connect consumers to an automated device through which
consumers may obtain information described in subparagraph (A) or
(B), as applicable, by inputting information using a touch-tone
telephone or similar device, if consumers whose telephones are
not equipped to use such automated device are provided the
opportunity to be connected to an individual from whom the
information described in subparagraph (A) or (B), as applicable,
may be obtained. A person that receives a request for information
described in subparagraph (A) or (B) from an obligor through the
toll-free telephone number disclosed under subparagraph (A) or
(B), as applicable, shall disclose in response to such request
only the information set forth in the table promulgated by the
Board under subparagraph (H)(i). The dollar amount contained in
this subclause shall be adjusted according to an indexing
mechanism established by the Board.
(II) Not later than 6 months prior to the expiration of the 24-
month period referenced in subclause (I), the Board shall submit
to the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives a report on the program described in subclause
(I).
(G) The Federal Trade Commission shall establish and maintain a
toll-free number for the purpose of providing to consumers the
information required to be disclosed under subparagraph (C).
(H) The Board shall -
(i) establish a detailed table illustrating the approximate
number of months that it would take to repay an outstanding
balance if a consumer pays only the required minimum monthly
payments and if no other advances are made, which table shall
clearly present standardized information to be used to disclose
the information required to be disclosed under subparagraph
(A), (B), or (C), as applicable;
(ii) establish the table required under clause (i) by
assuming -
(I) a significant number of different annual percentage
rates;
(II) a significant number of different account balances;
(III) a significant number of different minimum payment
amounts; and
(IV) that only minimum monthly payments are made and no
additional extensions of credit are obtained; and
(iii) promulgate regulations that provide instructional
guidance regarding the manner in which the information
contained in the table established under clause (i) should be
used in responding to the request of an obligor for any
information required to be disclosed under subparagraph (A),
(B), or (C).
(I) The disclosure requirements of this paragraph do not apply
to any charge card account, the primary purpose of which is to
require payment of charges in full each month.
(J) A creditor that maintains a toll-free telephone number for
the purpose of providing customers with the actual number of
months that it will take to repay the customer's outstanding
balance is not subject to the requirements of subparagraph (A) or
(B).
(K) A creditor that maintains a toll-free telephone number for
the purpose of providing customers with the actual number of
months that it will take to repay an outstanding balance shall
include the following statement on each billing statement:
"Making only the minimum payment will increase the interest you
pay and the time it takes to repay your balance. For more
information, call this toll-free number: ______." (the blank
space to be filled in by the creditor).
(12) If a late payment fee is to be imposed due to the failure
of the obligor to make payment on or before a required payment
due date, the following shall be stated clearly and conspicuously
on the billing statement:
(A) The date on which that payment is due or, if different,
the earliest date on which a late payment fee may be charged.
(B) The amount of the late payment fee to be imposed if
payment is made after such date.
(c) Disclosure in credit and charge card applications and
solicitations
(1) Direct mail applications and solicitations
(A) Information in tabular format
Any application to open a credit card account for any person
under an open end consumer credit plan, or a solicitation to
open such an account without requiring an application, that is
mailed to consumers shall disclose the following information,
subject to subsection (e) of this section and section 1632(c)
of this title:
(i) Annual percentage rates
(I) Each annual percentage rate applicable to extensions of
credit under such credit plan.
(II) Where an extension of credit is subject to a variable
rate, the fact that the rate is variable, the annual
percentage rate in effect at the time of the mailing, and how
the rate is determined.
(III) Where more than one rate applies, the range of
balances to which each rate applies.
(ii) Annual and other fees
(I) Any annual fee, other periodic fee, or membership fee
imposed for the issuance or availability of a credit card,
including any account maintenance fee or other charge imposed
based on activity or inactivity for the account during the
billing cycle.
(II) Any minimum finance charge imposed for each period
during which any extension of credit which is subject to a
finance charge is outstanding.
(III) Any transaction charge imposed in connection with use
of the card to purchase goods or services.
(iii) Grace period
(I) The date by which or the period within which any credit
extended under such credit plan for purchases of goods or
services must be repaid to avoid incurring a finance charge,
and, if no such period is offered, such fact shall be clearly
stated.
(II) If the length of such "grace period" varies, the card
issuer may disclose the range of days in the grace period,
the minimum number of days in the grace period, or the
average number of days in the grace period, if the disclosure
is identified as such.
(iv) Balance calculation method
(I) The name of the balance calculation method used in
determining the balance on which the finance charge is
computed if the method used has been defined by the Board, or
a detailed explanation of the balance calculation method used
if the method has not been so defined.
(II) In prescribing regulations to carry out this clause,
the Board shall define and name not more than the 5 balance
calculation methods determined by the Board to be the most
commonly used methods.
(B) Other information
In addition to the information required to be disclosed under
subparagraph (A), each application or solicitation to which
such subparagraph applies shall disclose clearly and
conspicuously the following information, subject to subsections
(e) and (f) of this section:
(i) Cash advance fee
Any fee imposed for an extension of credit in the form of
cash.
(ii) Late fee
Any fee imposed for a late payment.
(iii) Over-the-limit fee
Any fee imposed in connection with an extension of credit
in excess of the amount of credit authorized to be extended
with respect to such account.
(2) Telephone solicitations
(A) In general
In any telephone solicitation to open a credit card account
for any person under an open end consumer credit plan, the
person making the solicitation shall orally disclose the
information described in paragraph (1)(A).
(B) Exception
Subparagraph (A) shall not apply to any telephone
solicitation if -
(i) the credit card issuer -
(I) does not impose any fee described in paragraph
(1)(A)(ii)(I); or
(II) does not impose any fee in connection with telephone
solicitations unless the consumer signifies acceptance by
using the card;
(ii) the card issuer discloses clearly and conspicuously in
writing the information described in paragraph (1) within 30
days after the consumer requests the card, but in no event
later than the date of delivery of the card; and
(iii) the card issuer discloses clearly and conspicuously
that the consumer is not obligated to accept the card or
account and the consumer will not be obligated to pay any of
the fees or charges disclosed unless the consumer elects to
accept the card or account by using the card.
(3) Applications and solicitations by other means
(A) In general
Any application to open a credit card account for any person
under an open end consumer credit plan, and any solicitation to
open such an account without requiring an application, that is
made available to the public or contained in catalogs,
magazines, or other publications shall meet the disclosure
requirements of subparagraph (B), (C), or (D).
(B) Specific information
An application or solicitation described in subparagraph (A)
meets the requirement of this subparagraph if such application
or solicitation contains -
(i) the information -
(I) described in paragraph (1)(A) in the form required
under section 1632(c) of this title, subject to subsection
(e) of this section, and
(II) described in paragraph (1)(B) in a clear and
conspicuous form, subject to subsections (e) and (f) of
this section;
(ii) a statement, in a conspicuous and prominent location
on the application or solicitation, that -
(I) the information is accurate as of the date the
application or solicitation was printed;
(II) the information contained in the application or
solicitation is subject to change after such date; and
(III) the applicant should contact the creditor for
information on any change in the information contained in
the application or solicitation since it was printed;
(iii) a clear and conspicuous disclosure of the date the
application or solicitation was printed; and
(iv) a disclosure, in a conspicuous and prominent location
on the application or solicitation, of a toll free telephone
number or a mailing address at which the applicant may
contact the creditor to obtain any change in the information
provided in the application or solicitation since it was
printed.
(C) General information without any specific term
An application or solicitation described in subparagraph (A)
meets the requirement of this subparagraph if such application
or solicitation -
(i) contains a statement, in a conspicuous and prominent
location on the application or solicitation, that -
(I) there are costs associated with the use of credit
cards; and
(II) the applicant may contact the creditor to request
disclosure of specific information of such costs by calling
a toll free telephone number or by writing to an address,
specified in the application;
(ii) contains a disclosure, in a conspicuous and prominent
location on the application or solicitation, of a toll free
telephone number and a mailing address at which the applicant
may contact the creditor to obtain such information; and
(iii) does not contain any of the items described in
paragraph (1).
(D) Applications or solicitations containing subsection (a)
disclosures
An application or solicitation meets the requirement of this
subparagraph if it contains, or is accompanied by -
(i) the disclosures required by paragraphs (1) through (6)
of subsection (a) of this section;
(ii) the disclosures required by subparagraphs (A) and (B)
of paragraph (1) of this subsection included clearly and
conspiciously (!1) (except that the provisions of section
1632(c) of this title shall not apply); and
(iii) a toll free telephone number or a mailing address at
which the applicant may contact the creditor to obtain any
change in the information provided.
(E) Prompt response to information requests
Upon receipt of a request for any of the information referred
to in subparagraph (B), (C), or (D), the card issuer or the
agent of such issuer shall promptly disclose all of the
information described in paragraph (1).
(4) Charge card applications and solicitations
(A) In general
Any application or solicitation to open a charge card account
shall disclose clearly and conspicuously the following
information in the form required by section 1632(c) of this
title, subject to subsection (e) of this section:
(i) Any annual fee, other periodic fee, or membership fee
imposed for the issuance or availability of the charge card,
including any account maintenance fee or other charge imposed
based on activity or inactivity for the account during the
billing cycle.
(ii) Any transaction charge imposed in connection with use
of the card to purchase goods or services.
(iii) A statement that charges incurred by use of the
charge card are due and payable upon receipt of a periodic
statement rendered for such charge card account.
(B) Other information
In addition to the information required to be disclosed under
subparagraph (A), each written application or solicitation to
which such subparagraph applies shall disclose clearly and
conspicuously the following information, subject to subsections
(e) and (f) of this section:
(i) Cash advance fee
Any fee imposed for an extension of credit in the form of
cash.
(ii) Late fee
Any fee imposed for a late payment.
(iii) Over-the-limit fee
Any fee imposed in connection with an extension of credit
in excess of the amount of credit authorized to be extended
with respect to such account.
(C) Applications and solicitations by other means
Any application to open a charge card account, and any
solicitation to open such an account without requiring an
application, that is made available to the public or contained
in catalogs, magazines, or other publications shall contain -
(i) the information -
(I) described in subparagraph (A) in the form required
under section 1632(c) of this title, subject to subsection
(e) of this section, and
(II) described in subparagraph (B) in a clear and
conspicuous form, subject to subsections (e) and (f) of
this section;
(ii) a statement, in a conspicuous and prominent location
on the application or solicitation, that -
(I) the information is accurate as of the date the
application or solicitation was printed;
(II) the information contained in the application or
solicitation is subject to change after such date; and
(III) the applicant should contact the creditor for
information on any change in the information contained in
the application or solicitation since it was printed;
(iii) a clear and conspicuous disclosure of the date the
application or solicitation was printed; and
(iv) a disclosure, in a conspicuous and prominent location
on the application or solicitation, of a toll free telephone
number or a mailing address at which the applicant may
contact the creditor to obtain any change in the information
provided in the application or solicitation since it was
printed.
(D) Issuers of charge cards which provide access to open end
consumer credit plans
If a charge card permits the card holder to receive an
extension of credit under an open end consumer credit plan,
which is not maintained by the charge card issuer, the charge
card issuer may provide the information described in
subparagraphs (A) and (B) in the form required by such
subparagraphs in lieu of the information required to be
provided under paragraph (1), (2), or (3) with respect to any
credit extended under such plan, if the charge card issuer
discloses clearly and conspicuously to the consumer in the
application or solicitation that -
(i) the charge card issuer will make an independent
decision as to whether to issue the card;
(ii) the charge card may arrive before the decision is made
with respect to an extension of credit under an open end
consumer credit plan; and
(iii) approval by the charge card issuer does not
constitute approval by the issuer of the extension of credit.
The information required to be disclosed under paragraph (1)
shall be provided to the charge card holder by the creditor
which maintains such open end consumer credit plan before the
first extension of credit under such plan.
(E) Charge card defined
For the purposes of this subsection, the term "charge card"
means a card, plate, or other single credit device that may be
used from time to time to obtain credit which is not subject to
a finance charge.
(5) Regulatory authority of the Board
The Board may, by regulation, require the disclosure of
information in addition to that otherwise required by this
subsection or subsection (d) of this section, and modify any
disclosure of information required by this subsection or
subsection (d) of this section, in any application to open a
credit card account for any person under an open end consumer
credit plan or any application to open a charge card account for
any person, or a solicitation to open any such account without
requiring an application, if the Board determines that such
action is necessary to carry out the purposes of, or prevent
evasions of, any paragraph of this subsection.
(6) Additional notice concerning "introductory rates"
(A) In general
Except as provided in subparagraph (B), an application or
solicitation to open a credit card account and all promotional
materials accompanying such application or solicitation for
which a disclosure is required under paragraph (1), and that
offers a temporary annual percentage rate of interest, shall -
(i) use the term "introductory" in immediate proximity to
each listing of the temporary annual percentage rate
applicable to such account, which term shall appear clearly
and conspicuously;
(ii) if the annual percentage rate of interest that will
apply after the end of the temporary rate period will be a
fixed rate, state in a clear and conspicuous manner in a
prominent location closely proximate to the first listing of
the temporary annual percentage rate (other than a listing of
the temporary annual percentage rate in the tabular format
described in section 1632(c) of this title), the time period
in which the introductory period will end and the annual
percentage rate that will apply after the end of the
introductory period; and
(iii) if the annual percentage rate that will apply after
the end of the temporary rate period will vary in accordance
with an index, state in a clear and conspicuous manner in a
prominent location closely proximate to the first listing of
the temporary annual percentage rate (other than a listing in
the tabular format prescribed by section 1632(c) of this
title), the time period in which the introductory period will
end and the rate that will apply after that, based on an
annual percentage rate that was in effect within 60 days
before the date of mailing the application or solicitation.
(B) Exception
Clauses (ii) and (iii) of subparagraph (A) do not apply with
respect to any listing of a temporary annual percentage rate on
an envelope or other enclosure in which an application or
solicitation to open a credit card account is mailed.
(C) Conditions for introductory rates
An application or solicitation to open a credit card account
for which a disclosure is required under paragraph (1), and
that offers a temporary annual percentage rate of interest
shall, if that rate of interest is revocable under any
circumstance or upon any event, clearly and conspicuously
disclose, in a prominent manner on or with such application or
solicitation -
(i) a general description of the circumstances that may
result in the revocation of the temporary annual percentage
rate; and
(ii) if the annual percentage rate that will apply upon the
revocation of the temporary annual percentage rate -
(I) will be a fixed rate, the annual percentage rate that
will apply upon the revocation of the temporary annual
percentage rate; or
(II) will vary in accordance with an index, the rate that
will apply after the temporary rate, based on an annual
percentage rate that was in effect within 60 days before
the date of mailing the application or solicitation.
(D) Definitions
In this paragraph -
(i) the terms "temporary annual percentage rate of
interest" and "temporary annual percentage rate" mean any
rate of interest applicable to a credit card account for an
introductory period of less than 1 year, if that rate is less
than an annual percentage rate that was in effect within 60
days before the date of mailing the application or
solicitation; and
(ii) the term "introductory period" means the maximum time
period for which the temporary annual percentage rate may be
applicable.
(E) Relation to other disclosure requirements
Nothing in this paragraph may be construed to supersede
subsection (a) of section 1632 of this title, or any disclosure
required by paragraph (1) or any other provision of this
subsection.
(7) Internet-based solicitations
(A) In general
In any solicitation to open a credit card account for any
person under an open end consumer credit plan using the
Internet or other interactive computer service, the person
making the solicitation shall clearly and conspicuously
disclose -
(i) the information described in subparagraphs (A) and (B)
of paragraph (1); and
(ii) the information described in paragraph (6).
(B) Form of disclosure
The disclosures required by subparagraph (A) shall be -
(i) readily accessible to consumers in close proximity to
the solicitation to open a credit card account; and
(ii) updated regularly to reflect the current policies,
terms, and fee amounts applicable to the credit card account.
(C) Definitions
For purposes of this paragraph -
(i) the term "Internet" means the international computer
network of both Federal and non-Federal interoperable packet
switched data networks; and
(ii) the term "interactive computer service" means any
information service, system, or access software provider that
provides or enables computer access by multiple users to a
computer server, including specifically a service or system
that provides access to the Internet and such systems
operated or services offered by libraries or educational
institutions.
(d) Disclosure prior to renewal
(1) In general
Except as provided in paragraph (2), a card issuer that imposes
any fee described in subsection (c)(1)(A)(ii)(I) or (c)(4)(A)(i)
of this section shall transmit to a consumer at least 30 days
prior to the scheduled renewal date of the consumer's credit or
charge card account a clear and conspicuous disclosure of -
(A) the date by which, the month by which, or the billing
period at the close of which, the account will expire if not
renewed;
(B) the information described in subsection (c)(1)(A) or
(c)(4)(A) of this section that would apply if the account were
renewed, subject to subsection (e) of this section; and
(C) the method by which the consumer may terminate continued
credit availability under the account.
(2) Special rule for certain disclosures
(A) In general
The disclosures required by this subsection may be provided -

(i) prior to posting a fee described in subsection
(c)(1)(A)(ii)(I) or (c)(4)(A)(i) of this section to the
account, or
(ii) with the periodic billing statement first disclosing
that the fee has been posted to the account.
(B) Limitation on use of special rule
Disclosures may be provided under subparagraph (A) only if -
(i) the consumer is given a 30-day period to avoid payment
of the fee or to have the fee recredited to the account in
any case where the consumer does not wish to continue the
availability of the credit; and
(ii) the consumer is permitted to use the card during such
period without incurring an obligation to pay such fee.
(3) Short-term renewals
The Board may by regulation provide for fewer disclosures than
are required by paragraph (1) in the case of an account which is
renewable for a period of less than 6 months.
(e) Other rules for disclosures under subsections (c) and (d)
(1) Fees determined on the basis of a percentage
If the amount of any fee required to be disclosed under
subsection (c) or (d) of this section is determined on the basis
of a percentage of another amount, the percentage used in making
such determination and the identification of the amount against
which such percentage is applied shall be disclosed in lieu of
the amount of such fee.
(2) Disclosure only of fees actually imposed
If a credit or charge card issuer does not impose any fee
required to be disclosed under any provision of subsection (c) or
(d) of this section, such provision shall not apply with respect
to such issuer.
(f) Disclosure of range of certain fees which vary by State allowed
If the amount of any fee required to be disclosed by a credit or
charge card issuer under paragraph (1)(B), (3)(B)(i)(II), (4)(B),
or (4)(C)(i)(II) of subsection (c) of this section varies from
State to State, the card issuer may disclose the range of such fees
for purposes of subsection (c) of this section in lieu of the
amount for each applicable State, if such disclosure includes a
statement that the amount of such fee varies from State to State.
(g) Insurance in connection with certain open end credit card plans
(1) Change in insurance carrier
Whenever a card issuer that offers any guarantee or insurance
for repayment of all or part of the outstanding balance of an
open end credit card plan proposes to change the person providing
that guarantee or insurance, the card issuer shall send each
insured consumer written notice of the proposed change not less
than 30 days prior to the change, including notice of any
increase in the rate or substantial decrease in coverage or
service which will result from such change. Such notice may be
included on or with the monthly statement provided to the
consumer prior to the month in which the proposed change would
take effect.
(2) Notice of new insurance coverage
In any case in which a proposed change described in paragraph
(1) occurs, the insured consumer shall be given the name and
address of the new guarantor or insurer and a copy of the policy
or group certificate containing the basic terms and conditions,
including the premium rate to be charged.
(3) Right to discontinue guarantee or insurance
The notices required under paragraphs (1) and (2) shall each
include a statement that the consumer has the option to
discontinue the insurance or guarantee.
(4) No preemption of State law
No provision of this subsection shall be construed as
superseding any provision of State law which is applicable to the
regulation of insurance.
(5) Board definition of substantial decrease in coverage or
service
The Board shall define, in regulations, what constitutes a
"substantial decrease in coverage or service" for purposes of
paragraph (1).
(h) Prohibition on certain actions for failure to incur finance
charges
A creditor of an account under an open end consumer credit plan
may not terminate an account prior to its expiration date solely
because the consumer has not incurred finance charges on the
account. Nothing in this subsection shall prohibit a creditor from
terminating an account for inactivity in 3 or more consecutive
months.