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Consumer Credit Regulation: 12 C.F.R. § 10261.0 Payments. [§ 226.10]

(a) General rule. A creditor shall credit a payment to the consumer’s account as of the date of receipt, except when a delay in crediting does not result in a finance or other charge or except as provided in paragraph (b) of this section.

(b) Specific requirements for payments.

(1) General rule. A creditor may specify reasonable requirements for payments that enable most consumers to make conforming payments.

Consumer Credit Regulation: 12 C.F.R. § 10265.1 Ability to pay. [§ 226.51]

(a) General rule.

(1)(i) Consideration of ability to pay. A card issuer must not open a credit card account for a consumer under an open-end (not home-secured) consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the consumer’s ability to make the required minimum periodic payments under the terms of the account based on the consumer’s income or assets and the consumer’s current obligations.

Consumer Credit Regulation: 12 C.F.R. § 10265.3 Allocation of payments. [§ 226.53]

(a) General rule. Except as provided in paragraph (b) of this section, when a consumer makes a payment in excess of the required minimum periodic payment for a credit card account under an open-end (not home-secured) consumer credit plan, the card issuer must allocate the excess amount first to the balance with the highest annual percentage rate and any remaining portion to the other balances in descending order based on the applicable annual percentage rate.

(b) Special rules.

Consumer Credit Regulation: 12 C.F.R. § 10265.4 Limitations on the imposition of finance charges. [§ 226.54]

(a) Limitations on imposing finance charges as a result of the loss of a grace period.

(1) General rule. Except as provided in paragraph (b) of this section, a card issuer must not impose finance charges as a result of the loss of a grace period on a credit card account under an open-end (not home-secured) consumer credit plan if those finance charges are based on:

(i) Balances for days in billing cycles that precede the most recent billing cycle; or

Consumer Credit Regulation: 12 C.F.R. § 10265.6 Requirements for over-the-limit transactions. [§ 226.56]

(a) Definition. For purposes of this section, the term over-the-limit transaction means any extension of credit by a card issuer to complete a transaction that causes a consumer’s credit card account balance to exceed the credit limit.

(b) Opt-in requirement.

(1) General. A card issuer shall not assess a fee or charge on a consumer’s credit card account under an open-end (not home-secured) consumer credit plan for an over-the-limit transaction unless the card issuer:

Consumer Credit Regulation: 12 C.F.R. § 10265.7 Reporting and marketing rules for college student open-end credit. [§ 226.57]

(a) Definitions.

(1) College student credit card. The term college student credit card as used in this section means a credit card issued under a credit card account under an open-end (not home-secured) consumer credit plan to any college student.

(2) College student. The term college student as used in this section means a consumer who is a full-time or part-time student of an institution of higher education.

Consumer Credit Regulation: 12 C.F.R. § 10265.9 Reevaluation of rate increases. [§ 226.59]

(a) General rule.

(1) Evaluation of increased rate. If a card issuer increases an annual percentage rate that applies to a credit card account under an open-end (not home-secured) consumer credit plan, based on the credit risk of the consumer, market conditions, or other factors, or increased such a rate on or after January 1, 2009, and 45 days’ advance notice of the rate increase is required pursuant to § 1026.9(c)(2) or (g), the card issuer must:

Consumer Credit Regulation: 2(a)(4) Billing Cycle or Cycle

1. Intervals. In open-end credit plans, the billing cycle determines the intervals for which periodic disclosure statements are required; these intervals are also used as measuring points for other duties of the creditor. Typically, billing cycles are monthly, but they may be more frequent or less frequent (but not less frequent than quarterly).

Consumer Credit Regulation: 2(a)(6) Business Day

1. Business function test. Activities that indicate that the creditor is open for substantially all of its business functions include the availability of personnel to make loan disbursements, to open new accounts, and to handle credit transaction inquiries.

Consumer Credit Regulation: 2(a)(8) Cardholder

1. General rule. A cardholder is a natural person at whose request a card is issued for consumer credit purposes or who is a co-obligor or guarantor for such a card issued to another. The second category does not include an employee who is a co-obligor or guarantor on a card issued to the employer for business purposes, nor does it include a person who is merely the authorized user of a card issued to another.

Consumer Credit Regulation: 2(a)(9) Cash Price

1. Components. This amount is a starting point in computing the amount financed and the total sale price under § 1026.18 for credit sales. Any charges imposed equally in cash and credit transactions may be included in the cash price, or they may be treated as other amounts financed under § 1026.18(b)(2).

2. Service contracts. Service contracts include contracts for the repair or the servicing of goods, such as mechanical breakdown coverage, even if such a contract is characterized as insurance under state law.

Consumer Credit Regulation: Amendment History

[65 Fed. Reg. 17,131 (Mar. 31, 2000); 67 Fed. Reg. 16,982 (Apr. 9, 2002); 69 Fed. Reg. 16769 (Mar. 31, 2004); 73 Fed. Reg. 44 (July 30, 2008); 74 Fed. Reg. 5244 (Jan. 29, 2009); 74 Fed. Reg. 23,302 (May 19, 2009); 74 Fed. Reg. 41,248 (Aug. 14, 2009); 75 Fed. Reg. 7848 (Feb. 22, 2010); 75 Fed. Reg. 7925 (Feb. 22, 2010); 76 Fed. Reg. 18,363 (Apr. 4, 2011); 76 Fed. Reg. 23,005 (Apr. 25, 2011); 76 Fed. Reg. 79,772 (Dec. 22, 2011); 78 Fed. Reg. 79,730 (Dec. 31, 2013); 81 Fed. Reg. 72,160 (Oct. 19, 2016); 81 Fed. Reg. 84,369 (Nov. 22, 2016); 82 Fed. Reg. 18,975 (Apr. 25, 2017); 82 Fed. Reg.

Consumer Credit Regulation: 9(c)(2) Rules Affecting Open-End (Not Home-Secured) Plans

1. Changes initially disclosed. Except as provided in § 1026.9(g)(1), no notice of a change in terms need be given if the specific change is set forth initially consistent with any applicable requirements, such as rate or fee increases upon expiration of a specific period of time that were disclosed in accordance with § 1026.9(c)(2)(v)(B) or rate increases under a properly disclosed variable-rate plan in accordance with § 1026.9(c)(2)(v)(C). In contrast, notice must be given if the contract allows the creditor to increase a rate or fee at its discretion.

Consumer Credit Regulation: 9(c)(2)(i) Changes Where Written Advance Notice is Required

1. Affected consumers. Change-in-terms notices need only go to those consumers who may be affected by the change. For example, a change in the periodic rate for check overdraft credit need not be disclosed to consumers who do not have that feature on their accounts. If a single credit account involves multiple consumers that may be affected by the change, the creditor should refer to § 1026.5(d) to determine the number of notices that must be given.

Consumer Credit Regulation: 9(c)(2)(iv) Disclosure Requirements

1. Changing margin for calculating a variable rate. If a creditor is changing a margin used to calculate a variable rate, the creditor must disclose the amount of the new rate (as calculated using the new margin) in the table described in § 1026.9(c)(2)(iv), and include a reminder that the rate is a variable rate.

Consumer Credit Regulation: 9(c)(2)(v) Notice not Required

1. Changes not requiring notice. The following are examples of changes that do not require a change-in-terms notice:

i. A change in the consumer’s credit limit except as otherwise required by § 1026.9(c)(2)(vi).

ii. A change in the name of the credit card or credit card plan.

iii. The substitution of one insurer for another.

iv. A termination or suspension of credit privileges.