[Code of Federal Regulations]
[Title 12, Volume 3]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR226.9]

[Page 269-271]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 226--TRUTH IN LENDING (REGULATION Z)--Table of Contents
 
                       Subpart B--Open-End Credit
 
Sec. 226.9  Subsequent disclosure requirements.

    (a) Furnishing statement of billing rights--(1) Annual statement. 
The creditor shall mail or deliver the billing rights statement required 
by Sec. 226.6(d) at least once per calendar year, at intervals of not 
less than 6 months nor more than 18 months, either to all consumers or 
to each consumer entitled to receive a periodic statement under 
Sec. 226.5(b)(2) for any one billing cycle.
    (2) Alternative summary statement. As an alternative to paragraph 
(a)(1) of this section, the creditor may mail or deliver, on or with 
each periodic statement, a statement substantially similar to that in 
appendix G.
    (b) Disclosures for supplemental credit devices and additional 
features--(1) If a creditor, within 30 days after mailing or delivering 
the initial disclosures under Sec. 226.6(a), adds a credit feature to 
the consumer's account or mails or delivers to the consumer a credit 
device for which the finance charge terms are the same as those 
previously disclosed, no additional disclosures are necessary. After 30 
days, if the creditor adds a credit feature or furnishes a credit device 
(other than as a renewal, resupply, or the original issuance of a credit 
card) on the same finance charge terms, the creditor shall disclose, 
before the consumer uses the feature or device for the first time, that 
it is for use in obtaining credit under the terms previously disclosed.
    (2) Whenever a credit feature is added or a credit device is mailed 
or delivered, and the finance charge terms for the feature or device 
differ from disclosures previously given, the disclosures required by 
Sec. 226.6(a) that are applicable to the added feature or device shall 
be given before the consumer uses the feature or device for the first 
time.
    (c) Change in terms--(1) Written notice required. Whenever any term 
required to be disclosed under Sec. 226.6 is changed or the required 
minimum periodic payment is increased, the creditor shall mail or 
deliver written notice of the change to each consumer who may be 
affected. The notice shall be mailed or delivered at least 15 days prior 
to the effective date of the change. The 15-day timing requirement does 
not apply if the change has been agreed to by the consumer, or if a 
periodic rate or other finance charge is increased because of the 
consumer's delinquency or default; the notice shall be given, however, 
before the effective date of the change.
    (2) Notice not required. No notice under this section is required 
when the change involves late payment charges, charges for documentary 
evidence, or over-the-limit charges; a reduction of any component of a 
finance or other charge; suspension of future credit privileges or 
termination of an account or plan; or when the change results from an 
agreement involving a court proceeding, or from the consumer's default 
or delinquency (other than an increase in the periodic rate or other 
finance charge).
    (3) Notice for home equity plans. If a creditor prohibits additional 
extensions of credit or reduces the credit limit applicable to a home 
equity plan pursuant to Sec. 226.5b(f)(3)(i) or Sec. 226.5b(f)(3)(vi), 
the creditor shall mail or deliver written notice of the action to each 
consumer who will be affected. The notice must be provided not later 
than three business days after the action is taken and shall contain 
specific reasons for the action. If the creditor requires the consumer 
to request reinstatement of credit privileges, the notice also shall 
state that fact.
    (d) Finance charge imposed at time of transaction. (1) Any person, 
other than

[[Page 270]]

the card issuer, who imposes a finance charge at the time of honoring a 
consumer's credit card, shall disclose the amount of that finance charge 
prior to its imposition.
    (2) The card issuer, if other than the person honoring the 
consumer's credit card, shall have no responsibility for the disclosure 
required by paragraph (d)(1) of this section, and shall not consider any 
such charge for purposes of Secs. 226.5a, 226.6 and 226.7.
    (e) Disclosures upon renewal of credit or charge card--(1) Notice 
prior to renewal. Except as provided in paragraph (e)(2) of this 
section, a card issuer that imposes any annual or other periodic fee to 
renew a credit or charge card account of the type subject to 
Sec. 226.5a, including any fee based on account activity or inactivity, 
shall mail or deliver written notice of the renewal to the cardholder. 
The notice shall be provided at least 30 days or one billing cycle, 
whichever is less, before the mailing or the delivery of the periodic 
statement on which the renewal fee is initially charged to the account. 
The notice shall contain the following information:
    (i) The disclosures contained in Sec. 226.5a(b) (1) through (7) that 
would apply if the account were renewed;\20a\ and
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    \20a\ These disclosures need not be provided in tabular format or in 
a prominent location.
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    (ii) How and when the cardholder may terminate credit availability 
under the account to avoid paying the renewal fee.
    (2) Delayed notice. The disclosures required by paragraph (e)(1) of 
this section may be provided later than the time in paragraph (e)(1) of 
this section, but no later than the mailing or the delivery of the 
periodic statement on which the renewal fee is initially charged to the 
account, if the card issuer also discloses at that time that:
    (i) The cardholder has 30 days from the time the periodic statement 
is mailed or delivered to avoid paying the fee or to have the fee 
recredited if the cardholder terminates credit availability under the 
account; and
    (ii) The cardholder may use the card during the interim period 
without having to pay the fee.
    (3) Notification on periodic statements. The disclosures required by 
this paragraph may be made on or with a periodic statement. If any of 
the disclosures are provided on the back of a periodic statement, the 
card issuer shall include a reference to those disclosures on the front 
of the statement.
    (f) Change in credit card account insurance provided--(1) Notice 
prior to change. If a credit card issuer plans to change the provider of 
insurance for repayment of all or part of the outstanding balance of an 
open-end credit card account of the type subject to Sec. 226.5a, the 
card issuer shall mail or deliver the cardholder written notice of the 
change not less than 30 days before the change in providers occurs. The 
notice shall also include the following items, to the extent applicable:
    (i) Any increase in the rate that will result from the change;
    (ii) Any substantial decrease in coverage that will result from the 
change; and
    (iii) A statement that the cardholder may discontinue the insurance.
    (2) Notice when change in provider occurs. If a change described in 
paragraph (f)(1) of this section occurs, the card issuer shall provide 
the cardholder with a written notice no later than 30 days after the 
change, including the following items, to the extent applicable:
    (i) The name and address of the new insurance provider;
    (ii) A copy of the new policy or group certificate containing the 
basic terms of the insurance, including the rate to be charged; and
    (iii) A statement that the cardholder may discontinue the insurance.
    (3) Substantial decrease in coverage. For purposes of this 
paragraph, a substantial decrease in coverage is a decrease in a 
significant term of coverage that might reasonably be expected to affect 
the cardholder's decision to continue the insurance. Significant terms 
of coverage include, for example, the following:
    (i) Type of coverage provided;
    (ii) Age at which coverage terminates or becomes more restrictive;
    (iii) Maximum insurable loan balance, maximum periodic benefit 
payment, maximum number of payments,

[[Page 271]]

or other term affecting the dollar amount of coverage or benefits 
provided;
    (iv) Eligibility requirements and number and identity of persons 
covered;
    (v) Definition of a key term of coverage such as disability;
    (vi) Exclusions from or limitations on coverage; and
    (vii) Waiting periods and whether coverage is retroactive.
    (4) Combined notification. The notices required by paragraph (f) (1) 
and (2) of this section may be combined provided the timing requirement 
of paragraph (f)(1) of this section is met. The notices may be provided 
on or with a periodic statement.

[Reg. Z, 46 FR 20892, Apr. 7, 1981; 46 FR 29246, June 1, 1981, as 
amended at 54 FR 13867, Apr. 6, 1989; 54 FR 24688, June 9, 1989; 54 FR 
32954, Aug. 11, 1989; 55 FR 38312, Sept. 18, 1990; 55 FR 42148, Oct. 17, 
1990]