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Consumer Banking and Payments Law: 52(a)(2) Fees Not Subject to Limitations

1. Covered fees. Except as provided in § 1026.52(a)(2) and except as provided in comments 52(a)(2)–2 and–3, § 1026.52(a) applies to any fees or other charges that a card issuer will or may require the consumer to pay with respect to a credit card account during the first year after account opening, other than charges attributable to periodic interest rates. For example, § 1026.52(a) applies to:

Consumer Banking and Payments Law: 1026.52(b)-1 to -4

1. Fees for violating the account terms or other requirements. For purposes of § 1026.52(b), a fee includes any charge imposed by a card issuer based on an act or omission that violates the terms of the account or any other requirements imposed by the card issuer with respect to the account, other than charges attributable to periodic interest rates.

Consumer Banking and Payments Law: 52(b)(2) Prohibited Fees

1. Relationship to § 1026.52(b)(1). A card issuer does not comply with § 1026.52(b) if it imposes a fee that is inconsistent with the prohibitions in § 1026.52(b)(2). Thus, the prohibitions in § 1026.52(b)(2) apply even if a fee is consistent with § 1026.52(b)(1)(i) or (b)(1)(ii).

Consumer Banking and Payments Law: 55(a) General Rule

1. Increase in rate, fee, or charge. Section 1026.55(a) prohibits card issuers from increasing an annual percentage rate or any fee or charge required to be disclosed under § 1026.6(b)(2)(ii), (b)(2)(iii), or (b)(2)(xii) on a credit card account unless specifically permitted by one of the exceptions in § 1026.55(b). Except as specifically provided in § 1026.55(b), this prohibition applies even if the circumstances under which an increase will occur are disclosed in advance. The following examples illustrate the general application of § 1026.55(a) and (b).

Consumer Banking and Payments Law: 57(a)(1) College student credit card

1. Definition. The definition of college student credit card excludes home-equity lines of credit accessed by credit cards and overdraft lines of credit accessed by debit cards. A college student credit card includes a college affinity card within the meaning of TILA section 127(r)(1)(A). In addition, a card may fall within the scope of the definition regardless of the fact that it is not intentionally targeted at or marketed to college students.

Consumer Banking and Payments Law: 57(a)(5) College credit card agreement

1. Definition. Section 1026.57(a)(5) defines “college credit card agreement” to include any business, marketing or promotional agreement between a card issuer and a college or university (or an affiliated organization, such as an alumni club or a foundation) if the agreement provides for the issuance of credit cards to full-time or part-time students.

Consumer Banking and Payments Law: 57(c) Prohibited inducements

1. Tangible item clarified. A tangible item includes any physical item, such as a gift card, a t-shirt, or a magazine subscription, that a card issuer or creditor offers to induce a college student to apply for or open an open-end consumer credit plan offered by such card issuer or creditor. Tangible items do not include non-physical inducements such as discounts, rewards points, or promotional credit terms.

Consumer Banking and Payments Law: 1026.60 General

1. General. Section 1026.60 generally requires that credit disclosures be contained in application forms and solicitations initiated by a card issuer to open a credit or charge card account. (See § 1026.60(a)(5) and (e)(2) for exceptions; see § 1026.60(a)(1) and accompanying commentary for the definition of solicitation; see also § 1026.2(a)(15) and accompanying commentary for the definition of charge card and § 1026.61(c) for restrictions on when credit or charge card accounts can be added to previously issued prepaid accounts.)

Consumer Banking and Payments Law: 1026.60(b)-1 to -4

1. Tabular format. Provisions in § 1026.60(b) and its commentary provide that certain information must appear or is permitted to appear in a table. The tabular format is required for § 1026.60(b) disclosures given pursuant to § 1026.60(c), (d)(2), (e)(1) and (f). The tabular format does not apply to oral disclosures given pursuant to § 1026.60(d)(1). (See § 1026.60(a)(2).)

Consumer Banking and Payments Law: 60(b)(4) Transaction Charges

1. Charges imposed by person other than card issuer. Charges imposed by a third party, such as a seller of goods, shall not be disclosed in the table under this section; the third party would be responsible for disclosing the charge under § 1026.9(d)(1).

Consumer Banking and Payments Law: 1026.61(a)-1

1. Scope of § 1026.61. Section 1026.61 sets forth the definition of hybrid prepaid-credit card, and several requirements that only apply to covered separate credit features accessible by hybrid prepaid-credit cards as defined in § 1026.61(a)(2)(i).

Consumer Banking and Payments Law: 61(a)(1) In General

1. Credit. Under § 1026.61(a)(1), except as provided in § 1026.61(a)(4), a prepaid card is a hybrid prepaid-credit card if the prepaid card can access credit from a covered separate credit feature as described in § 1026.61(a)(2)(i) or if it can access credit extended through a negative balance on the asset feature of the prepaid account as described in § 1026.61(a)(3).

Consumer Banking and Payments Law: 61(a)(4) Exception for Credit Extended Through a Negative Balance

1. Prepaid card that is not a hybrid prepaid-credit card. i. A prepaid card that is not a hybrid prepaid-credit card as described in § 1026.61(a)(4) with respect to credit extended through a negative balance on the asset feature of the prepaid account is not a credit card under this regulation with respect to that credit. A prepaid card is not a hybrid prepaid-credit card with respect to credit extended through a negative balance on the asset feature of the prepaid account if:

Consumer Banking and Payments Law: 61(a)(5) Definitions

Paragraph 61(a)(5)(iii)

1. Card network or payment network agreements. A draw, transfer, or authorization of the draw or transfer from a credit feature may be effectuated through a card network or a payment network. However, for purposes of § 1026.61(a)(5)(iii), agreements to participate in a card network or payment network themselves do not constitute an “agreement” or a “business, marketing, or promotional agreement or other arrangement” described in § 1026.61(a)(5)(iii)(B) or (C), respectively.

Consumer Banking and Payments Law: 61(c) Timing Requirement for Solicitation or Application With Respect to Hybrid Prepaid–Credit Cards

1. Meaning of registration of a prepaid card or prepaid account. A prepaid card or prepaid account is registered, such that the 30–day timing requirement required by § 1026.61(c) begins, when the prepaid account issuer successfully completes its collection of consumer identifying information and identity verification in accordance with the requirements of applicable Federal and state law.

Consumer Banking and Payments Law: Amendment History

[77 Fed. Reg. 69,738 (Nov. 21, 2012); 77 Fed. Reg. 70,114 (Nov. 23, 2012); 78 Fed. Reg. 70,196 (Nov. 25, 2013); 78 Fed. Reg. 80,302 (Dec. 31, 2013); 79 Fed. Reg. 56,485 (Sept. 22, 2014); 80 Fed. Reg. 43,911, 43,920 (July 24, 2015); 80 Fed. Reg. 73,949 (Nov. 27, 2015); 81 Fed. Reg. 72,395 (Oct. 19, 2016); 81 Fed. Reg. 84,371 (Nov. 22, 2016); 81 Fed. Reg. 86,266 (Nov. 30, 2016); 82 Fed. Reg. 18,975 (April 25, 2017); 82 Fed. Reg. 37,773 (Aug. 11, 2017); 82 Fed. Reg. 51,979 (Nov. 9, 2017); 83 Fed. Reg. 6364, 6440 (Feb. 13, 2018); 83 Fed. Reg. 59,278 (Nov.

Consumer Banking and Payments Law: G.4 OCC Letter on FDIC Insurance for Prepaid Cards

A copy of this letter in its original format is available online as companion material to this treatise.

Comptroller of the Currency

Administrator of National Banks

Washington, DC 20219

January 23, 2009

Ms. Lauren Saunders

Managing Attorney

National Consumer Law Center

1001 Connecticut Avenue, NW, Suite 510

Washington, D.C. 20036

Subject: Prepaid Cards

Dear Ms. Saunders: