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Truth in Lending: 6.5.4.4.3 Alternative to disclosures

A card issuer may also provide a statement on the application or solicitation that there are costs associated with the use of the credit or charge card and that the applicant can contact the card issuer to request specific information about those costs by calling a toll-free telephone number or by writing to an address specified on the application or solicitation.845 The card issuer would have to provide both a toll-free telephone number (for nonlocal calls made from an area code other than that used in the card issuer’s dialing area) and a

Truth in Lending: 6.5.4.4.4 Prompt response

Regardless of the option used, TILA provides that, upon receiving a request by a consumer for any of the credit information required to be disclosed under the Act, card issuers must promptly give all of the required credit disclosures.848 Information is promptly disclosed if it is given within thirty days of a consumer’s request for information but in no event later than delivery of the credit or charge card.

Truth in Lending: 6.5.5 Special Charge Card Rule—Card Issuer and Person Extending Credit Not the Same Person

Previously, Regulation Z provided special rules where the charge card issuer and the person maintaining an open-end credit plan that the card accesses were different persons.862 This provision was deleted effective July 2010 based on its understanding that these types of plans are no longer in effect.863 However, as the official interpretations note, TILA’s statutory provisions regarding these plans remain in effect and may be used by charge card issuers in the future offering plans meeting

Truth in Lending: 6.5.6 Preemption of State Laws for Credit Card Applications and Solicitations

State laws relating to the terms of credit required to be disclosed or the manner in which such terms must be disclosed are preempted as to any credit or charge card application or solicitation and as to any renewal notice for any credit card account subject to TILA.865 The preemption of such provisions of state law is total,866 and differs from other provisions of TILA which generally preempt only inconsistent state laws.867 State laws, howe

Truth in Lending: 6.5.7 Remedies for Credit and Charge Card Application and Solicitation Disclosure Violations

The civil liability section of the Act871 provides for comprehensive remedies for the violation of “any requirement imposed under this chapter,” which encompasses the credit card application and solicitation disclosure requirements.872 Congress’s intent to subject disclosure violations to the general remedies of this section is confirmed by its specifically limiting the award of statutory damages to only those cardholders who pay a fee for the card or who actually use it.

Truth in Lending: 6.6.1.1 Introduction

All forms of open-end credit require a set of “account opening” disclosures.875 Before the first transaction on any open-end credit account, the creditor must disclose certain information about the terms and conditions of the account. The disclosures include information necessary for the consumer to know how to best use the account to avoid charges, for instance, or whether to use the account at all.

Truth in Lending: 6.6.2.4.2 Rejecting a plan

Once the consumer has received the disclosures, he or she must either reject the plan or accept it by use. If the consumer cashes the check, uses the account, or pays the fee, the creditor may consider the account not rejected for this purpose.922 If a consumer has paid or promised to pay a membership fee or an application fee, and then rejects the plan, the consumer is not be obligated for that fee or any other fee or charge.923

Truth in Lending: 6.6.3.1 Tabular Format

Creditors must provide certain information at account-opening in the form of a table with headings.941 This table must use headings, content, and format substantially similar to any of the tables found in appendix G-17 to part 1026.942 This table does not apply to home-secured lines of credit.943

Truth in Lending: 6.6.3.2 Prominence of Table and Required Terms

All disclosures required to be made in the tabular format must use at least ten-point type.945 In addition, APRs, including introductory APRs, and fees required to be disclosed in the table must be in bold text.946 The following fees must be in bold text,947 including if the fee is a percentage or if there are any maximum limits:948

Truth in Lending: 6.6.3.4 Fees Based on a Percentage

If the amount of any fee required to be disclosed at account opening is determined on the basis of a percentage of another amount. For example, if a card issuer imposes an annual fee based on a percentage of the credit line, the card issuer may state the percentage and amount to which the percentage is applied, rather than state the dollar amount of the fee.956 If a card issuer is able to determine the dollar amount of the fee, the card issuer would, of course, be permitted to disclose that amount.

Truth in Lending: 6.6.3.5 Fees That Vary by State

There are two options for disclosure of a cash advance, late payment, balance transfer, over-the-limit, or returned-payment fees required to be disclosed in the account-opening table, if those fees vary from state to state.