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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: 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: 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. § 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. § 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;

Truth in Lending: 15 U.S.C. § 1667d. Civil liability of lessors

(a) Grounds for maintenance of action

Any lessor who fails to comply with any requirement imposed under section 1667a or 1667b of this title with respect to any person is liable to such person as provided in section 1640 of this title.

(b) Additional grounds for maintenance of action; “creditor” defined

Truth in Lending: 15 U.S.C. § 1667e. Applicability of State laws; exemptions by Bureau from leasing requirements

(a) This part does not annul, alter, or affect, or exempt any person subject to the provisions of this part from complying with, the laws of any State with respect to consumer leases, except to the extent that those laws are inconsistent with any provision of this part, and then only to the extent of the inconsistency. The Bureau is authorized to determine whether such inconsistencies exist.

Truth in Lending: 15 U.S.C. § 1667f. Regulations.

(a) Regulations authorized.—

(1) In general

The Bureau shall prescribe regulations to update and clarify the requirements and definitions applicable to lease disclosures and contracts, and any other issues specifically related to consumer leasing, to the extent that the Bureau determines such action to be necessary—

(A) to carry out this part;

Truth in Lending: Correlation Table Between FRB and CFPB Versions

The Consumer Financial Protection Bureau version of Regulation M, 12 C.F.R. pt. 1013, as amended through 72 Fed. Reg. 63,461 (Nov. 1, 2012). The table below show the corresponding Federal Reserve Board numbers. The online companion material to this treatise contains other Regulation M material.

CFPB numbering FRB numbering

Sec.

Truth in Lending: Section 1013.1 Authority, scope, purpose, and enforcement. [213.1]

(a) Authority. The regulation in this part, known as Regulation M, is issued by the Bureau of Consumer Financial Protection to implement the consumer leasing provisions of the Truth in Lending Act, which is Title I of the Consumer Credit Protection Act, as amended (15 U.S.C. 1601 et seq.). Information collection requirements contained in this part have been approved by the Office of Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been assigned OMB control number 3170–0006.

Truth in Lending: Section 1013.2 Definitions. [213.2]

For the purposes of this part the following definitions apply:

(a) Act means the Truth in Lending Act (15 U.S.C. 1601 et seq.) and the Consumer Leasing Act is Chapter 5 of the Truth in Lending Act.

(b) Advertisement means a commercial message in any medium that directly or indirectly promotes a consumer lease transaction.

(c) Bureau refers to the Bureau of Consumer Financial Protection.

Truth in Lending: Section 1013.3 General disclosure requirements. [213.3]

(a) General requirements. A lessor shall make the disclosures required by § 1013.4, as applicable. The disclosures shall be made clearly and conspicuously in writing in a form the consumer may keep, in accordance with this section. The disclosures required by this part may be provided to the lessee in electronic form, subject to compliance with the consumer consent and other applicable provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. 7001 et seq.).