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Truth in Lending: 6.7.8.5 Disclosure of Year-to-Date Totals at End of Calendar Year

Creditors are required to disclose year-to-date totals for “Interest” and “Fees.”1555 Most open-end creditors send monthly periodic statements; however, the billing cycle often does not coincide with calendar months. For example, a creditor may have a billing cycle begin on the tenth day of each month and ends on the 9th day of the next month. In disclosing calendar year-to-date totals for such accounts, these creditors have two options for disclosing the year-to-date total at the end of the calendar year.

Truth in Lending: 6.7.9 Summary of Changes-in-Terms and Penalty Rate Notices

Creditors for non-home-secured open-end plans are required to include a summary of any changes in terms or imposition of a penalty rate on the front of a periodic statement.1560 This requirement only applies if the notice of a change in terms or imposition of a penalty rate is included within or accompanies the periodic statement.1561 The summary must be on the front of the periodic statement, but need not be on the first page.1562 See

Truth in Lending: 6.7.10 Disclosure of the Closing Date and Outstanding Balance at the End of the Period

TILA and Regulation Z require disclosure of the amount of the outstanding balance as of the closing date of the billing cycle.1563 Regulation Z also requires disclosure of the actual closing date.1564 For non-home-secured accounts, the disclosure of the outstanding balance must be grouped together with the disclosures of the due date, late-payment fee and penalty rate, minimum payment due, and minimum payment warning.1565

Truth in Lending: 6.7.11.1 Disclosure of the Grace Period

If there is a grace period, the periodic statement must disclose the date by which, or the time within which, the new balance or any portion thereof must be paid to avoid finance charges.1571 The disclosure must be consistent with that in the account-opening disclosure statement.1572 In addition, the periodic statement must use language sufficiently similar to the grace period disclosures within the application/solicitation and account-opening tables in order to satisfy the creditors’ duty t

Truth in Lending: 6.7.11.2 Amount of Minimum Payment

Most issuers set a minimum payment that the cardholder is required to pay each billing cycle, which is less than the actual balance at the end of the cycle. Failure to pay this minimum payment usually constitutes a default, leading to the imposition of late fees and a penalty rate.

Truth in Lending: 6.7.11.4.1 General requirements; overview

TILA, as amended by the Credit CARD Act, requires periodic statements to include a mandatory warning statement about the risks of making only the minimum payment.1613 In addition, periodic statements must disclose the actual estimated repayment period that would result if the consumer made only the minimum payment.1614 This requirement applies to every periodic statement for which there is a balance or in which a finance charge is imposed.1615

Truth in Lending: 6.7.11.4.2 Exemptions

The minimum payment repayment disclosures are only required for credit card accounts under an open-end (not home-secured) consumer credit plan.1633 Thus, the disclosures are not required for home equity lines of credit or credit cards that access an overdraft line of credit.1634 Furthermore, charge cards that require full repayment of the balance at the end of each billing cycle are also exempted.1635

Truth in Lending: 6.7.11.4.3 Formatting requirements

The minimum payment repayment disclosures must be in a conspicuous and prominent location on the periodic statement.1639 They must be in a tabular format that is substantially similar to model forms G-18(C)(1) through C(3) in appendix G to Regulation Z.1640 Furthermore, they must be located “closely proximate” to the disclosure of the minimum payment itself, pursuant to the formatting requirements of section 1026.7(b)(13).1641

Truth in Lending: 6.7.11.4.4 Thirty-six months payoff disclosure

The Credit CARD Act requires issuers to provide an estimate of the monthly payment required and total cost of paying off the balance in thirty-six months.1642 This provision is apparently intended to encourage consumers to pay more than the minimum payment, and pay off the balance more quickly within thirty-six months.

Truth in Lending: 6.7.11.4.5 Disclosures when there is negative amortization

Negative amortization occurs when the minimum payments for an account do not pay off the accrued interest and fees, so that the debt increases even when payments are made. If a credit card account is subject to negative amortization, the minimum payoff disclosures are modified.1651 This should rarely occur since federal banking regulators have issued guidance that discourages minimum payments that are so low as to create negative amortization.1652

Truth in Lending: 6.7.11.4.6 Credit counseling information

The Credit CARD Act requires issuers to include in the minimum payment repayment disclosures a toll-free number where the consumer can receive information about credit counseling and debt management services.1657 An uncodified provision of the Act also states that the referrals provided by the toll-free number include only those nonprofit credit counseling agencies approved by a United States bankruptcy trustee.1658 Since the U.S.

Truth in Lending: 6.7.12 The Billing Error Address

The periodic statement must include the address to which the consumer can send billing error notices.1669 The address can be on the statement itself or on the short form billing error statement which the creditor can opt to send, on or with each periodic statement, in lieu of sending an annual long form statement.1670 The substantive requirements of the billing error procedures are discussed at

Truth in Lending: 6.7.14 Disclosure of Due Date/End of Deferred Interest Period

Creditors may offer deferred interest programs, which do not impose a periodic rate on a balance if that balance is paid off by the end of the deferred interest period.1678 If the balance is not repaid by then, the creditor will impose finance charges attributable to the periodic rates that apply to period between the date of purchase and the end of the deferred interest period.

Truth in Lending: 6.7.15 Remedies for Periodic Statement Violations

The consumer is entitled to actual damages and attorney fees for any violation of the periodic statement disclosure requirements.1682 Statutory damages are available only for violation of a specific subset of these requirements. Section 1640(a) lists those provisions for which statutory damages are available:1683

Truth in Lending: 6.8.1 Overview

In addition to the account-opening disclosures and the periodic statement disclosures, the creditor for any type of open-end credit account must provide three types of subsequent disclosures:

Truth in Lending: 6.8.3.1 General Rule

A creditor that adds a credit feature or a supplemental credit “device” to an account is required to give certain disclosures.1711 The exception to this rule is if the credit feature or device is added less than thirty days after the creditor mails or delivers the account-opening disclosures, and the finance charge terms are the same.1712

Truth in Lending: 6.8.3.2 Credit “Feature” or “Device”

Examples of an added credit feature include the addition of an overdraft feature to a checking account (the checks themselves are not credit devices), or the addition of a cash advance feature to a credit card.1719 By “credit device,” the regulation refers to such things as blank checks, payee-designated checks, blank drafts or orders, or authorization forms for issuance of checks.1720 It does not include a check payable to the customer representing loan proceeds or a cash advance.

Truth in Lending: 6.8.4.1 Introduction

Changes in the terms of open-end credit, especially for credit card accounts, are a common occurrence. Many credit card issuers place extremely expansive change-in-term provisions in their credit card agreements, which allow the issuers to change any of the terms in the agreement at any time.1747

Truth in Lending: 6.8.4.2 Credit CARD Act Provisions Regarding Changes-in-Terms

The Credit CARD Act of 2009 specifically requires credit card issuers to provide forty-five days’ notice for any increases in the APR1750 and any significant changes in terms for credit card accounts.1751 The Credit CARD Act provisions do not apply to open-end credit accounts that are not credit cards, but Regulation Z requires the same notice for all open-end credit except for HELOCs.1752 The forty-five-day notice requirement does not apply