2009 California Civil Code - Section 1748.10-1748.14 :: Title 1.3a. Credit Card Disclosure

CIVIL CODE
SECTION 1748.10-1748.14

1748.10.  This act shall be known and may be cited as the "Areias
Credit Card Full Disclosure Act of 1986."

1748.11.  (a) Any application form or preapproved written
solicitation for an open-end credit card account to be used for
personal, family, or household purposes that is mailed on or after
October 1, 1987, to a consumer residing in this state by or on behalf
of a creditor, whether or not the creditor is located in this state,
other than an application form or solicitation included in a
magazine, newspaper, or other publication distributed by someone
other than the creditor, shall contain or be accompanied by either of
the following disclosures:
   (1) A disclosure of each of the following, if applicable:
   (A) Any periodic rate or rates that may be applied to the account,
expressed as an annual percentage rate or rates. If the account is
subject to a variable rate, the creditor may instead either disclose
the rate as of a specific date and indicate that the rate may vary,
or identify the index and any amount or percentage added to, or
subtracted from, that index and used to determine the rate. For
purposes of this section, that amount or percentage shall be referred
to as the "spread."
   (B) Any membership or participation fee that may be imposed for
availability of a credit card account, expressed as an annualized
amount.
   (C) Any per transaction fee that may be imposed on purchases,
expressed as an amount or as a percentage of the transaction, as
applicable.
   (D) If the creditor provides a period during which the consumer
may repay the full balance reflected on a billing statement that is
attributable to purchases of goods or services from the creditor or
from merchants participating in the credit card plan, without the
imposition of additional finance charges, the creditor shall either
disclose the number of days of that period, calculated from the
closing date of the prior billing cycle to the date designated in the
billing statement sent to the consumer as the date by which that
payment must be received to avoid additional finance charges, or
describe the manner in which the period is calculated. For purposes
of this section, the period shall be referred to as the "free period"
or "free-ride period." If the creditor does not provide this period
for purchases, the disclosure shall so indicate.
   (2) A disclosure that satisfies the initial disclosure statement
requirements of Regulation Z.
   (b) A creditor need not present the disclosures required by
paragraph (1) of subdivision (a) in chart form or use any specific
terminology, except as expressly provided in this section. The
following chart shall not be construed in any way as a standard by
which to determine whether a creditor who elects not to use such a
chart has provided the required disclosures in a manner that
satisfies paragraph (1) of subdivision (a). However, disclosures
shall be conclusively presumed to satisfy the requirements of
paragraph (1) of subdivision (a) if a chart with captions
substantially as follows is completed with the applicable terms
offered by the creditor, or if the creditor presents the applicable
terms in tabular, list, or narrative format using terminology
substantially similar to the captions included in the following
chart:

+-+---------------------------------------------------+-+
|     THE FOLLOWING INFORMATION IS PROVIDED PURSUANT    |
|                                                       |
|    TO THE AREIAS CREDIT CARD FULL DISCLOSURE ACT OF   |
|                                                       |
|                         1986:                         |
|     INTEREST RATES, FEES, AND FREE-RIDE PERIOD FOR    |
|                                                       |
|        PURCHASES UNDER THIS CREDIT CARD ACCOUNT       |
+-+---------------------------------------------------+-+
|                                                       |
+-+----------+-----------+---------+--------+---------+-+
|               VARIABLE                                |
|                 RATE                                  |
|                          ANNUAL-                      |
|                INDEX       IZED                       |
|                          MEMBER-                      |
|                 AND        SHIP                       |
|    ANNUAL                OR PAR-             FREE-    |
|     PER-       SPREAD     TICI-    TRANS-     RIDE    |
|    CENTAGE                PATION   ACTION    PERIOD   |
|   RATE (1)      (2)        FEE       FEE      (3)     |
+-+----------+-----------+---------+--------+---------+-+
|                                                       |
+-+----------+-----------+---------+--------+---------+-+
|                                                       |
+-+----------+-----------+---------+--------+---------+-+

   (1) For fixed interest rates. If variable rate, creditor may elect
to disclose a rate as of a specified date and indicate that the rate
may vary.
   (2) For variable interest rates. If fixed rate, creditor may
eliminate the column, leave the column blank, or indicate "No" or
"None" or "Does not apply."
   (3) For example, "30 days" or "Yes, if full payment is received by
next billing date" or "Yes, if full new balance is paid by due date."

   (c) For purposes of this section, "Regulation Z" has the meaning
attributed to it under Section 1802.18, and all of the terms used in
this section have the same meaning as attributed to them in federal
Regulation Z (12 C.F.R. 226.1 et seq.). For the purposes of this
section, "open-end credit card account" does not include an account
accessed by a device described in paragraph (2) of subdivision (a) of
Section 1747.02.
   (d) Nothing in this section shall be deemed or construed to
prohibit a creditor from disclosing additional terms, conditions, or
information, whether or not relating to the disclosures required
under this section, in conjunction with the disclosures required by
this section.
   (e) If a creditor is required under federal law to make any
disclosure of the terms applicable to a credit card account in
connection with application forms or solicitations, the creditor
shall be deemed to have complied with the requirements of paragraph
(1) of subdivision (a) with respect to those application forms or
solicitations if the creditor complies with the federal disclosure
requirement. For example, in lieu of complying with the requirements
of paragraph (1) of subdivision (a), a creditor has the option of
disclosing the specific terms required to be disclosed in an
advertisement under Regulation Z, if the application forms or
solicitations constitute advertisements in which specific terms must
be disclosed under Regulation Z.
   (f) If for any reason the requirements of this section do not
apply equally to creditors located in this state and creditors not
located in this state, then the requirements applicable to creditors
located in this state shall automatically be reduced to the extent
necessary to establish equal requirements for both categories of
creditors, until it is otherwise determined by a court of law in a
proceeding to which the creditor located in this state is a party.
   (g) All application forms for an open-end credit card account
distributed in this state on or after October 1, 1987, other than by
mail, shall contain a statement in substantially the following form:
   "If you wish to receive disclosure of the terms of this credit
card, pursuant to the Areias Credit Card Full Disclosure Act of 1986,
check here and return to the address on this application."
   A box shall be printed in or next to this statement for placement
of such a checkmark.
   However, this subdivision does not apply if the application
contains the disclosures provided for in this title.
   (h) This title does not apply to any application form or written
advertisement or an open-end credit card account where the credit to
be extended will be secured by a lien on real or personal property or
both real and personal property.
   (i) This title does not apply to any person who is subject to
Article 10.5 (commencing with Section 1810.20) of Chapter 1 of Title
2.

1748.12.  (a) For purposes of this section:
   (1) "Cardholder" means any consumer to whom a credit card is
issued, provided that, when more than one credit card has been issued
for the same account, all persons holding those credit cards may be
treated as a single cardholder.
   (2) "Credit card" means any card, plate, coupon book, or other
single credit device existing for the purpose of being used from time
to time upon presentation to obtain money, property, labor, or
services on credit. "Credit card" does not mean any of the following:
   (A) Any single credit device used to obtain telephone property,
labor, or services in any transaction under public utility tariffs.
   (B) Any device that may be used to obtain credit pursuant to an
electronic fund transfer but only if the credit is obtained under an
agreement between a consumer and a financial institution to extend
credit when the consumer's asset account is overdrawn or to maintain
a specified minimum balance in the consumer's asset account.
   (C) Any key or card key used at an automated dispensing outlet to
obtain or purchase petroleum products, as defined in subdivision (c)
of Section 13401 of the Business and Professions Code, which will be
used primarily for business rather than personal or family purposes.
   (3) "Marketing information" means the categorization of
cardholders compiled by a credit card issuer, based on a cardholder's
shopping patterns, spending history, or behavioral characteristics
derived from account activity which is provided to a marketer of
goods or services or a subsidiary or affiliate organization of the
company that collects the information for consideration. "Marketing
information" does not include aggregate data that does not identify a
cardholder based on the cardholder's shopping patterns, spending
history, or behavioral characteristics derived from account activity
or any communications to any person in connection with any transfer,
processing, billing, collection, chargeback, fraud prevention, credit
card recovery, or acquisition of or for credit card accounts.
   (b) If the credit card issuer discloses marketing information
concerning a cardholder to any person, the credit card issuer shall
provide a written notice to the cardholder that clearly and
conspicuously describes the cardholder's right to prohibit the
disclosure of marketing information concerning the cardholder which
discloses the cardholder's identity. The notice shall be in 10-point
type and shall advise the cardholder of his or her ability to respond
either by completing a preprinted form or a toll-free telephone
number that the cardholder may call to exercise this right.
   (c) The requirements of subdivision (b) shall be satisfied by
furnishing the notice to the cardholder:
   (1) At least 60 days prior to the initial disclosure of marketing
information concerning the cardholder by the credit card issuer.
   (2) For all new credit cards issued on or after April 1, 2002, on
the form containing the new credit card when the credit card is
delivered to the cardholder.
   (3) At least once per calendar year, to every cardholder entitled
to receive an annual statement of billings rights pursuant to 12
C.F.R. 226.9 (Regulation Z). The notice required by this paragraph
may be included on or with any periodic statement or with the
delivery of the renewal card.
   (d) (1) The cardholder's election to prohibit disclosure of
marketing information shall be effective only with respect to
marketing information that is disclosed to any party beginning 30
days after the credit card issuer has received, at the designated
address on the form containing the new credit card or on the
preprinted form, or by telephone, the cardholder's election to
prohibit disclosure. This does not apply to the disclosure of
marketing information prior to the cardholder's notification to the
credit card issuer of the cardholder's election.
   (2) An election to prohibit disclosure of marketing information
shall terminate upon receipt by the credit card issuer of notice from
the cardholder that the cardholder's election to prohibit disclosure
is no longer effective.
   (e) The requirements of this section do not apply to any of the
following communications of marketing information by a credit card
issuer:
   (1) Communications to any party to, or merchant specified in, the
credit card agreement, or to any person whose name appears on the
credit card or on whose behalf the credit card is issued.
   (2) Communications to consumer credit reporting agencies, as
defined in subdivision (d) of Section 1785.3.
   (3) To the extent that the Fair Credit Reporting Act preempts the
requirements of this section as to communication by a credit card
issuer to a corporate subsidiary or affiliate, the credit card issuer
may communicate information about a cardholder to a corporate
subsidiary or affiliate to the extent and in the manner permitted
under that act.
   (4) Communications to a third party when the third party is
responsible for conveying information from the card issuer to any of
its cardholders.
   (f) If the laws of the United States require disclosure to
cardholders regarding the use of personal information, compliance
with the federal requirements shall be deemed to be compliance with
this section.
   (g) This section shall become operative on April 1, 2002.

1748.13.  (a) A credit card issuer shall, with each billing
statement provided to a cardholder in this state, provide the
following on the front of the first page of the billing statement in
type no smaller than that required for any other required disclosure,
but in no case in less than 8-point capitalized type:
   (1) A written statement in the following form: "Minimum Payment
Warning: Making only the minimum payment will increase the interest
you pay and the time it takes to repay your balance."
   (2) Either of the following:
   (A) A written statement in the form of and containing the
information described in clause (i) or (ii), as applicable, as
follows:
   (i) A written three-line statement, as follows:

   "A one thousand dollar ($1,000) balance will take 17 years and
three months to pay off at a total cost of two thousand five hundred
ninety dollars and thirty-five cents ($2,590.35).
A two thousand five hundred dollar ($2,500) balance will take 30
years and three months to pay off at a total cost of seven thousand
seven hundred thirty-three dollars and forty-nine cents ($7,733.49).
A five thousand dollar ($5,000) balance will take 40 years and two
months to pay off at a total cost of sixteen thousand three hundred
five dollars and thirty-four cents ($16,305.34).
This information is based on an annual percentage rate of 17 percent
and a minimum payment of 2 percent or ten dollars ($10), whichever is
greater."

   In the alternative, a credit card issuer may provide this
information for the three specified amounts at the annual percentage
rate and required minimum payment which are applicable to the
cardholder's account. The statement provided shall be immediately
preceded by the statement required by paragraph (1).
   (ii) Instead of the information required by clause (i), retail
credit card issuers shall provide a written three-line statement to
read, as follows:

   "A two hundred fifty dollar ($250) balance will take two years and
eight months to pay off a total cost of three hundred twenty-five
dollars and twenty-four cents ($325.24).
A five hundred dollar ($500) balance will take four years and five
months to pay off at a total cost of seven hundred nine dollars and
ninety cents ($709.90).
A seven hundred fifty dollar ($750) balance will take five years and
five months to pay off at a total cost of one thousand ninety-four
dollars and forty-nine cents ($1,094.49).
This information is based on an annual percentage rate of 21 percent
and a minimum payment of 5 percent or ten dollars ($10), whichever is
greater."

   In the alternative, a retail credit card issuer may provide this
information for the three specified amounts at the annual percentage
rate and required minimum payment which are applicable to the
cardholder's account. The statement provided shall be immediately
preceded by the statement required by paragraph (1). A retail credit
card issuer is not required to provide this statement if the
cardholder has a balance of less than five hundred dollars ($500).
   (B) A written statement providing individualized information
indicating an estimate of the number of years and months and the
approximate total cost to pay off the entire balance due on an
open-end credit card account if the cardholder were to pay only the
minimum amount due on the open-ended account based upon the terms of
the credit agreement. For purposes of this subparagraph only, if the
account is subject to a variable rate, the creditor may make
disclosures based on the rate for the entire balance as of the date
of the disclosure and indicate that the rate may vary. In addition,
the cardholder shall be provided with referrals or, in the
alternative, with the "800" telephone number of the National
Foundation for Credit Counseling through which the cardholder can be
referred, to credit counseling services in, or closest to, the
cardholder's county of residence. The credit counseling service shall
be in good standing with the National Foundation for Credit
Counseling or accredited by the Council on Accreditation for Children
and Family Services. The creditor is required to provide, or
continue to provide, the information required by this paragraph only
if the cardholder has not paid more than the minimum payment for six
consecutive months, after July 1, 2002.
   (3) (A) A written statement in the following form: "For an
estimate of the time it would take to repay your balance, making only
minimum payments, and the total amount of those payments, call this
toll-free telephone number: (Insert toll-free telephone number)."
This statement shall be provided immediately following the statement
required by subparagraph (A) of paragraph (2). A credit card issuer
is not required to provide this statement if the disclosure required
by subparagraph (B) of paragraph (2) has been provided.
   (B) The toll-free telephone number shall be available between the
hours of 8 a.m. and 9 p.m., Pacific standard time, seven days a week,
and shall provide consumers with the opportunity to speak with a
person, rather than a recording, from whom the information described
in subparagraph (A) may be obtained.
   (C) The Department of Financial Institutions shall establish a
detailed table illustrating the approximate number of months that it
would take and the approximate total cost to repay an outstanding
balance if the consumer pays only the required minimum monthly
payments and if no other additional charges or fees are incurred on
the account, such as additional extension of credit, voluntary credit
insurance, late fees, or dishonored check fees by assuming all of
the following:
   (i) A significant number of different annual percentage rates.
   (ii) A significant number of different account balances, with the
difference between sequential examples of balances being no greater
than one hundred dollars ($100).
   (iii) A significant number of different minimum payment amounts.
   (iv) That only minimum monthly payments are made and no additional
charges or fees are incurred on the account, such as additional
extensions of credit, voluntary credit insurance, late fees, or
dishonored check fees.
   (D) A creditor that receives a request for information described
in subparagraph (A) from a cardholder through the toll-free telephone
number disclosed under subparagraph (A), or who is required to
provide the information required by subparagraph (B) of paragraph
(2), may satisfy its obligation to disclose an estimate of the time
it would take and the approximate total cost to repay the cardholder'
s balance by disclosing only the information set forth in the table
described in subparagraph (C). Including the full chart along with a
billing statement does not satisfy the obligation under this section.
   (b) For purposes of this section:
   (1) "Credit card" has the same meaning as in paragraph (2) of
subdivision (a) of Section 1748.12.
   (2) "Open-end credit card account" means an account in which
consumer credit is granted by a creditor under a plan in which the
creditor reasonably contemplates repeated transactions, the creditor
may impose a finance charge from time to time on an unpaid balance,
and the amount of credit that may be extended to the consumer during
the term of the plan is generally made available to the extent that
any outstanding balance is repaid and up to any limit set by the
creditor.
   (3) "Retail credit card" means a credit card is issued by or on
behalf of a retailer, or a private label credit card that is limited
to customers of a specific retailer.
   (c) (1) This section shall not apply in any billing cycle in which
the account agreement requires a minimum payment of at least 10
percent of the outstanding balance.
   (2) This section shall not apply in any billing cycle in which
finance charges are not imposed.

1748.14.  Any waiver of the provisions of this title is contrary to
public policy, and is void and unenforceable.


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