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Truth in Lending: Amendment History

[74 Fed. Reg. 5244 (Jan. 29, 2009); 74 Fed. Reg. 36,097 (July 22, 2009) (interim final rule); 75 Fed. Reg. 7848 (Feb. 22, 2010); 75 Fed. Reg. 7925 (Feb. 22, 2010); 75 Fed. Reg. 37,583 (June 29, 2010); 76 Fed. Reg. 23,015, 23,016, 23,018 (Apr. 25, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 86 Fed. Reg. 69,716 (Dec. 8, 2021); 88 Fed. Reg. 30,598 (May 11, 2023)]

Truth in Lending: 10(a) General Rule.

1. Crediting date. Section 1026.10(a) does not require the creditor to post the payment to the consumer’s account on a particular date; the creditor is only required to credit the payment as of the date of receipt.

2. Date of receipt. The “date of receipt” is the date that the payment instrument or other means of completing the payment reaches the creditor. For example:

i. Payment by check is received when the creditor gets it, not when the funds are collected.

Truth in Lending: 10(d) Crediting of Payments When Creditor Does Not Receive or Accept Payments on Due Date.

1. Example. A day on which the creditor does not receive or accept payments by mail may occur, for example, if the U.S. Postal Service does not deliver mail on that date.

2. Treating a payment as late for any purpose. See comment 5(b)(2)(ii)-2 for guidance on treating a payment as late for any purpose. When an account is not eligible for a grace period, imposing a finance charge due to a periodic interest rate does not constitute treating a payment as late.

Truth in Lending: 10(e) Limitations on Fees Related to Method of Payment.

1. Separate fee to allow consumers to make a payment. For purposes of § 1026.10(e), the term “separate fee” means a fee imposed on a consumer for making a payment to the consumer’s account. A fee or other charge imposed if payment is made after the due date, such as a late fee or finance charge, is not a separate fee to allow consumers to make a payment for purposes of § 1026.10(e).

Truth in Lending: 10(f) Changes by Card Issuer.

1. Address for receiving payment. For purposes of § 1026.10(f), “address for receiving payment” means a mailing address for receiving payment, such as a post office box, or the address of a branch or office at which payments on credit card accounts are accepted.

Truth in Lending: Amendment History

[74 Fed. Reg. 5244 (Jan. 29, 2009); 75 Fed. Reg. 7848 (Feb. 22, 2010); 75 Fed. Reg. 7925 (Feb. 22, 2010); 76 Fed. Reg. 23,018, 23,019 (Apr. 25, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 81 Fed. Reg. 84,369 (Nov. 22, 2016); 82 Fed. Reg. 18,975 (Apr. 25, 2017); 83 Fed. Reg. 6364 (Feb. 13, 2018)]

Truth in Lending: 11(a) Credit Balances.

1. Timing of refund. The creditor may also fulfill its obligations under § 1026.11 by:

i. Refunding any credit balance to the consumer immediately.

ii. Refunding any credit balance prior to receiving a written request (under § 1026.11(a)(2)) from the consumer.

iii. Refunding any credit balance upon the consumer’s oral or electronic request.

Truth in Lending: 11(b) Account Termination.

Paragraph 11(b)(1)

1. Expiration date. The credit agreement determines whether or not an open-end plan has a stated expiration (maturity) date. Creditors that offer accounts with no stated expiration date are prohibited from terminating those accounts solely because a consumer does not incur a finance charge, even if credit cards or other access devices associated with the account expire after a stated period. Creditors may still terminate such accounts for inactivity consistent with § 1026.11(b)(2).

Truth in Lending: 11(c) Timely Settlement of Estate Debts.

1. Administrator of an estate. For purposes of § 1026.11(c), the term “administrator” means an administrator, executor, or any personal representative of an estate who is authorized to act on behalf of the estate.

2. Examples. The following are examples of reasonable procedures that satisfy this rule:

i. A card issuer may decline future transactions and terminate the account upon receiving reasonable notice of the consumer’s death.

Truth in Lending: Amendment History

[74 Fed. Reg. 5244 (Jan. 29, 2009); 75 Fed. Reg. 7848 (Feb. 22, 2010); 75 Fed. Reg. 7925 (Feb. 22, 2010); 76 Fed. Reg. 79,772 (Dec. 22, 2011)]

Truth in Lending: 1. Scope and 2. Definition of “accepted credit card”

1. Scope. Sections 1026.12(a) and (b) deal with the issuance and liability rules for credit cards, whether the card is intended for consumer, business, or any other purposes. Sections 1026.12(a) and (b) are exceptions to the general rule that the regulation applies only to consumer credit. (See §§ 1026.1 and 1026.3.)

Truth in Lending: 12(a) Issuance of Credit Cards.

Paragraph 12(a)(1)

1. Explicit request. A request or application for a card must be explicit. For example, a request for an overdraft plan tied to a checking account does not constitute an application for a credit card with overdraft checking features.

Truth in Lending: 12(b) Liability of Cardholder for Unauthorized Use.

1. Meaning of cardholder. For purposes of this provision, cardholder includes any person (including organizations) to whom a credit card is issued for any purpose, including business. When a corporation is the cardholder, required disclosures should be provided to the corporation (as opposed to an employee user).

Truth in Lending: 12(b)(1)(ii) Limitation on Amount.

1. Meaning of authority. Section 1026.12(b)(1)(i) defines unauthorized use in terms of whether the user has actual, implied, or apparent authority. Whether such authority exists must be determined under state or other applicable law.

2. Liability limits—dollar amounts. As a general rule, the cardholder’s liability for a series of unauthorized uses cannot exceed either $50 or the value obtained through the unauthorized use before the card issuer is notified, whichever is less.

Truth in Lending: 12(b)(2) Conditions of Liability.

1. Issuer’s option not to comply. A card issuer that chooses not to impose any liability on cardholders for unauthorized use need not comply with the disclosure and identification requirements discussed in § 1026.12(b)(2).

Paragraph 12(b)(2)(ii)

Truth in Lending: 12(b)(3) Notification to Card Issuer.

1. How notice must be provided. Notice given in a normal business manner—for example, by mail, telephone, or personal visit—is effective even though it is not given to, or does not reach, some particular person within the issuer’s organization. Notice also may be effective even though it is not given at the address or phone number disclosed by the card issuer under § 1026.12(b)(2)(ii).

Truth in Lending: 12(b)(5) Business Use of Credit Cards.

1. Agreement for higher liability for business use cards. The card issuer may not rely on § 1026.12(b)(5) if the business is clearly not in a position to provide 10 or more cards to employees (for example, if the business has only 3 employees). On the other hand, the issuer need not monitor the personnel practices of the business to make sure that it has at least 10 employees at all times.

Truth in Lending: 20(b) Assumptions.

1. General definition.

i. An assumption as defined in § 1026.20(b) is a new transaction and new disclosures must be made to the subsequent consumer. An assumption under the regulation requires the following three elements:

A. A residential mortgage transaction.

B. An express acceptance of the subsequent consumer by the creditor.

C. A written agreement.

Truth in Lending: 20(e)(1) Scope.

Editor’s Note241

1. Real property or dwelling. For purposes of § 1026.20(e)(1), the term “real property” includes vacant and unimproved land. The term “dwelling” includes vacation and second homes and mobile homes, boats, and trailers used as residences. See § 1026.2(a)(19) and related commentary for additional guidance regarding the term “dwelling.”

Truth in Lending: 20(e)(2) Content requirements.

1. Clear and conspicuous standard. The clear and conspicuous standard generally requires that disclosures be in a reasonably understandable form and readily noticeable to the consumer.

Paragraph 20(e)(2)(i).

Truth in Lending: 20(e)(3) Optional information.

1. Optional information permitted. Section 1026.20(e)(3) lists information that the creditor or servicer may, at its option, include on the notice required by § 1026.20(e). To comply with § 1026.20(e)(3), the creditor or servicer may place the information required by § 1026.20(e)(3), other than the name and logo of the creditor or servicer, between the heading required by § 1026.20(e)(2) and the disclosures required by § 1026.20(e)(2)(i) and (ii). The name and logo may be placed above the heading required § 1026.20(e)(2).