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Truth in Lending: 51(b)(2) Credit line increases for young consumers.
1. Credit line request by joint accountholder aged 21 or older. The requirement under § 1026.51(b)(2) that a cosigner, guarantor, or joint accountholder for a credit card account opened pursuant to § 1026.51(b)(1)(ii) must agree in writing to assume liability for the increase before a credit line is increased, does not apply if the cosigner, guarantor or joint accountholder who is at least 21 years old initiates the request for the increase.
Truth in Lending: Amendment History
[75 Fed. Reg. 7848 (Feb. 22, 2010); 76 Fed. Reg. 23,020 (Apr. 25, 2011); 76 Fed. Reg. 31,221 (May 31, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 78 Fed. Reg. 25,818 (May 3, 2013)]
Truth in Lending: 52(a)(1) General rule.
Editor’s Note922
1. Application.923 The 25 percent limit in § 1026.52(a)(1) applies to fees that the card issuer charges to the account as well as to fees that the card issuer requires the consumer to pay with respect to the account through other means (such as through a payment from the consumer’s asset account, including a prepaid account as defined in § 1026.61, to the card issuer or from another credit account provided by the card issuer). For example:
Truth in Lending: 52(a)(2) Fees Not Subject to Limitations.
1. Covered fees.927 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:
Truth in Lending: 52(a)(3) Rule of Construction.
1. Fees or charges otherwise prohibited by law. Section 1026.52(a) does not authorize the imposition or payment of fees or charges otherwise prohibited by law. For example, see 16 CFR 310.4(a)(4).
Truth in Lending: 52(b)-1 and 52(b)-2
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.
Truth in Lending: 52(b)(1) General Rule.
1. Relationship between § 1026.52(b)(1)(i), (b)(1)(ii), and (b)(2).
i. Relationship between § 1026.52(b)(1)(i) and (b)(1)(ii). A card issuer may impose a fee for violating the terms or other requirements of an account pursuant to either § 1026.52(b)(1)(i) or (b)(1)(ii).
Truth in Lending: 52(b)(1)(i) Fees Based on Costs.
1. Costs incurred as a result of violations. Section 1026.52(b)(1)(i) does not require a card issuer to base a fee on the costs incurred as a result of a specific violation of the terms or other requirements of an account. Instead, for purposes of § 1026.52(b)(1)(i), a card issuer must have determined that a fee for violating the terms or other requirements of an account represents a reasonable proportion of the costs incurred by the card issuer as a result of that type of violation.
Truth in Lending: 52(b)(1)(ii) Safe harbors.
1. Multiple violations of same type.
Truth in Lending: 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).
Truth in Lending: 52(b)(2)(i) Fees That Exceed Dollar Amount Associated With Violation.
1. Late payment fees. For purposes of § 1026.52(b)(2)(i), the dollar amount associated with a late payment is the amount of the required minimum periodic payment due immediately prior to assessment of the late payment fee. Thus, § 1026.52(b)(2)(i)(A) prohibits a card issuer from imposing a late payment fee that exceeds the amount of that required minimum periodic payment. For example:
Truth in Lending: 52(b)(2)(ii) Multiple Fees Based on a Single Event or Transaction.
1. Single event or transaction. Section 1026.52(b)(2)(ii) prohibits a card issuer from imposing more than one fee for violating the terms or other requirements of an account based on a single event or transaction. If § 1026.56(j)(1) permits a card issuer to impose fees for exceeding the credit limit in consecutive billing cycles based on the same over-the-limit transaction, those fees are not based on a single event or transaction for purposes of § 1026.52(b)(2)(ii). The following examples illustrate the application of § 1026.52(b)(2)(ii).
Truth in Lending: Amendment History
[75 Fed. Reg. 7848 (Feb. 22, 2010); 75 Fed. Reg. 37,583 (June 29, 2010); 76 Fed. Reg. 23,021 (Apr. 25, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 78 Fed. Reg. 18,795 (Mar. 28, 2013); 78 Fed. Reg. 76,033 (Dec. 16, 2013); 81 Fed. Reg. 41,418 (June 27, 2016); 81 Fed. Reg. 84,369 (Nov. 22, 2016); 82 Fed. Reg. 18,975 (Apr. 25, 2017); 82 Fed. Reg. 41,158 (Aug. 30, 2017); 83 Fed. Reg. 6364 (Feb. 13, 2018); 83 Fed. Reg. 43,503 (Aug. 27, 2018); 84 Fed. Reg. 37,565 (Aug. 1, 2019); 85 Fed. Reg. 50,944 (Aug. 19, 2020); 86 Fed. Reg. 60,357 (Nov. 2, 2021)]
Truth in Lending: 1026.53-1 through 1026.53-4
1. Required minimum periodic payment. Section 1026.53 addresses the allocation of amounts paid by the consumer in excess of the minimum periodic payment required by the card issuer. Section 1026.53 does not limit or otherwise address the card issuer’s ability to determine, consistent with applicable law and regulatory guidance, the amount of the required minimum periodic payment or how that payment is allocated.
Truth in Lending: 53(b) Special Rules.
1. Deferred interest and similar programs. Section 1026.53(b)(1) applies to deferred interest or similar programs 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. For purposes of § 1026.53(b)(1), “deferred interest” has the same meaning as in § 1026.16(h)(2) and associated commentary. Section 1026.53(b)(1) applies regardless of whether the consumer is required to make payments with respect to that balance during the specified period.
Truth in Lending: Amendment History
[75 Fed. Reg. 7848 (Feb. 22, 2010); 76 Fed. Reg. 23,028, 23,029 (Apr. 25, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011)]
Truth in Lending: 54(a)(1) General Rule.
1. Eligibility for grace period. Section 1026.54 prohibits the imposition of finance charges as a result of the loss of a grace period in certain specified circumstances. Section 1026.54 does not require the card issuer to provide a grace period.
Truth in Lending: Additional Material
This treatise’s digital version at “Primary Sources” includes other material concerning the Consumer Leasing Act and its history.
Truth in Lending: Introduction
15 U.S.C. § 1667, Pub. L. No. 94-240 (Mar. 23, 1976), as amended through Pub. L. No. 111-203, 124 Stat. 1376 (July 21, 2010)
Truth in Lending: 15 U.S.C. § 1667. Definitions
For purposes of this part—
Truth in Lending: 15 U.S.C. § 1667a. Consumer lease disclosures
Each lessor shall give a lessee prior to the consummation of the lease a dated written statement on which the lessor and lessee are identified setting out accurately and in a clear and conspicuous manner the following information with respect to that lease, as applicable:
(1) A brief description or identification of the leased property;
(2) The amount of any payment by the lessee required at the inception of the lease;
Truth in Lending: 15 U.S.C. § 1667b. Lessee’s liability on expiration or termination of lease
(a) Estimated residual value of property as basis; presumptions; action by lessor for excess liability; mutually agreeable final adjustment
Truth in Lending: 15 U.S.C. § 1667c. Consumer lease advertising; radio advertisements; liability of advertisers
(a) In general
If an advertisement for a consumer lease includes a statement of the amount of any payment or a statement that any or no initial payment is required, the advertisement shall clearly and conspicuously state, as applicable—
(1) the transaction advertised is a lease;
(2) the total amount of any initial payments required on or before consummation of the lease or delivery of the property, whichever is later;