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List of Subjects in 12 CFR Part 226

Advertising, Consumer protection, Federal Reserve System, Reporting and 

recordkeeping requirements, Truth in Lending.

For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR 

part 226, as set forth below: 

PART 226—TRUTH IN LENDING (REGULATION Z)

1. The authority citation for part 226 continues to read as follows:

Authority: 12 U.S.C. 3806; 15 U.S.C. 1604 and 1637(c)(5).

2. Section 226.1 is amended by republishing paragraphs (a), (b), (c), and (e), 

revising paragraph (d), and removing and reserving footnote 1 to read as follows:

SUBPART A − GENERAL

§ 226.1 Authority, purpose, coverage, organization, enforcement, and liability.

(a) Authority. This regulation, known as Regulation Z, is issued by the Board of 

Governors of the Federal Reserve System to implement the federal Truth in Lending Act, 

which is contained in title I of the Consumer Credit Protection Act, as amended (15 

U.S.C. 1601 et seq.). This regulation also implements title XII, section 1204 of the 

Competitive Equality Banking Act of 1987 (Pub. L. 100-86, 101 Stat. 552). Informationcollection requirements contained in this regulation have been approved by the Office of 

Management and Budget under the provisions of 44 U.S.C. 3501 et seq. and have been 

assigned OMB No. 7100-0199.

(b) Purpose. The purpose of this regulation is to promote the informed use of 

consumer credit by requiring disclosures about its terms and cost. The regulation also 

gives consumers the right to cancel certain credit transactions that involve a lien on a 
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consumer’s principal dwelling, regulates certain credit card practices, and provides a 

means for fair and timely resolution of credit billing disputes. The regulation does not 

govern charges for consumer credit. The regulation requires a maximum interest rate to 

be stated in variable-rate contracts secured by the consumer’s dwelling. It also imposes 

limitations on home-equity plans that are subject to the requirements of § 226.5b and 

mortgages that are subject to the requirements of § 226.32. The regulation prohibits 

certain acts or practices in connection with credit secured by a consumer’s principal 

dwelling.

(c) Coverage. (1) In general, this regulation applies to each individual or 

business that offers or extends credit when four conditions are met: (i) the credit is 

offered or extended to consumers; (ii) the offering or extension of credit is done 

regularly;1

(1) Subpart A contains general information. It sets forth: (i) the authority, 

purpose, coverage, and organization of the regulation; (ii) the definitions of basic terms; 

(iii) the credit is subject to a finance charge or is payable by a written 

agreement in more than four installments; and (iv) the credit is primarily for personal, 

family, or household purposes.

(2) If a credit card is involved, however, certain provisions apply even if the 

credit is not subject to a finance charge, or is not payable by a written agreement in more 

than four installments, or if the credit card is to be used for business purposes.

(3) In addition, certain requirements of § 226.5b apply to persons who are not 

creditors but who provide applications for home-equity plans to consumers.

(d) Organization. The regulation is divided into subparts and appendices as 

follows: 

 1

 [Reserved]
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(iii) the transactions that are exempt from coverage; and (iv) the method of determining 

the finance charge.

(2) Subpart B contains the rules for open-end credit. It requires that accountopening disclosures and periodic statements be provided, as well as additional disclosures 

for credit and charge card applications and solicitations and for home-equity plans subject 

to the requirements of § 226.5a and § 226.5b, respectively. It also describes special rules 

that apply to credit card transactions, treatment of payments and credit balances, 

procedures for resolving credit billing errors, annual percentage rate calculations, 

rescission requirements, and advertising.

(3) Subpart C relates to closed-end credit. It contains rules on disclosures, 

treatment of credit balances, annual percentages rate calculations, rescission 

requirements, and advertising.

(4) Subpart D contains rules on oral disclosures, disclosures in languages other 

than English, record retention, effect on state laws, state exemptions, and rate limitations.

(5) Subpart E contains special rules for certain mortgage transactions. Section 

226.32 requires certain disclosures and provides limitations for loans that have rates and 

fees above specified amounts. Section 226.33 requires disclosures, including the total 

annual loan cost rate, for reverse mortgage transactions. Section 226.34 prohibits 

specific acts and practices in connection with mortgage transactions that are subject to 

§ 226.32. Section 226.35 prohibits specific acts and practices in connection with higherpriced mortgage loans, as defined in § 226.35(a). Section 226.36 prohibits specific acts 

and practices in connection with credit secured by a consumer’s principal dwelling. 
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(6) Several appendices contain information such as the procedures for 

determinations about state laws, state exemptions and issuance of staff interpretations, 

special rules for certain kinds of credit plans, a list of enforcement agencies, and the rules 

for computing annual percentage rates in closed-end credit transactions and total-annualloan-cost rates for reverse mortgage transactions.

(e) Enforcement and liability. Section 108 of the act contains the administrative 

enforcement provisions. Sections 112, 113, 130, 131, and 134 contain provisions relating 

to liability for failure to comply with the requirements of the act and the regulation. 

Section 1204 (c) of title XII of the Competitive Equality Banking Act of 1987, Pub. L. 

No. 100-86, 101 Stat. 552, incorporates by reference administrative enforcement and civil 

liability provisions of sections 108 and 130 of the act.

3. Section 226.2 is amended by revising paragraph (a), republishing paragraph 

(b) and removing and reserving footnote 3 to read as follows:

§ 226.2 Definitions and rules of construction.

(a) Definitions. For purposes of this regulation, the following definitions apply:

(1) Act means the Truth in Lending Act (15 U.S.C. 1601 et seq.).

(2) Advertisement means a commercial message in any medium that promotes, 

directly or indirectly, a credit transaction.

(3) [Reserved]2

(4) Billing cycle or cycle means the interval between the days or dates of regular 

periodic statements. These intervals shall be equal and no longer than a quarter of a year. 

An interval will be considered equal if the number of days in the cycle does not vary 

more than four days from the regular day or date of the periodic statement. 

 2

 [Reserved]
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(5) Board means the Board of Governors of the Federal Reserve System.

(6) Business day means a day on which the creditor’s offices are open to the 

public for carrying on substantially all of its business functions. However, for purposes 

of rescission under §§ 226.15 and 226.23, and for purposes of §§ 226.19(a)(1)(ii) and 

226.31, the term means all calendar days except Sundays and the legal public holidays 

specified in 5 U.S.C. 6103(a), such as New Year’s Day, the Birthday of Martin Luther 

King, Jr., Washington’s Birthday, Memorial Day, Independence Day, Labor Day, 

Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.

(7) Card issuer means a person that issues a credit card or that person’s agent 

with respect to the card.

(8) Cardholder means a natural person to whom a credit card is issued for 

consumer credit purposes, or a natural person who has agreed with the card issuer to pay 

consumer credit obligations arising from the issuance of credit card to another natural 

person. For purposes of § 226.12(a) and (b), the term includes any person to whom a 

credit card is issued for any purpose, including business, commercial or agricultural use, 

or a person who has agreed with the card issuer to pay obligations arising from the 

issuance of such a credit card to another person.

(9) Cash price means the price at which a creditor, in the ordinary course of 

business, offers to sell for cash property or service that is the subject of the transaction. 

At the creditor’s option, the term may include the price of accessories, services related to 

the sale, service contracts and taxes and fees for license, title, and registration. The term 

does not include any finance charge.
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(10) Closed-end credit means consumer credit other than “open-end credit” as 

defined in this section.

(11) Consumer means a cardholder or natural person to whom consumer credit is 

offered or extended. However, for purposes of the rescission under §§ 226.15 and 

226.23, the term also includes a natural person in whose principal dwelling a security 

interest is or will be retained or acquired, if that person’s ownership interest in the 

dwelling is or will be subject to the security interest. 

(12) Consumer credit means credit offered or extended to a consumer primarily 

for personal, family, or household purposes.

(13) Consummation means the time that a consumer becomes contractually 

obligated on a credit transaction.

(14) Credit means the right to defer payment of debt or to incur debt and defer its 

payment.

(15) Credit card means any card, plate, or other single credit device that may be 

used from time to time to obtain credit. Charge card means a credit card on an account 

for which no periodic rate is used to compute a finance charge.

(16) Credit sale means a sale in which the seller is a creditor. The term includes 

a bailment or lease (unless terminable without penalty at any time by the consumer) 

under which the consumer−

(i) Agrees to pay as compensation for use a sum substantially equivalent to, or in 

excess of, the total value of the property and service involved; and 
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(ii) Will become (or has the option to become), for no additional consideration or 

for nominal consideration, the owner of the property upon compliance with the 

agreement.

(17) Creditor means: 

(i) A person (A) who regularly extends consumer credit3

(v) A person regularly extends consumer credit only if it extended credit (other 

than credit subject to the requirements of § 226.32) more than 25 times (or more than 

5 times for transactions secured by a dwelling) in the preceding calendar year. If a 

that is subject to a 

finance charge or is payable by written agreement in more than four installments (not 

including a down payment), and (B) to whom the obligation is initially payable, either on 

the face of the note or contract, or by agreement when there is no note or contract.

(ii) For purposes of §§ 226.4(c)(8) (Discounts), 226.9(d) (Finance charge 

imposed at time of transaction), and 226.12(e) (Prompt notification of returns and 

crediting of refunds), a person that honors a credit card.

(iii) For purposes of subpart B, any card issuer that extends either open-end credit 

or credit that is not subject to a finance charge and is not payable by written agreement in 

more than four installments.

(iv) For purposes of subpart B (except for the credit and charge card disclosures 

contained in §§ 226.5a and 226.9(e) and (f), the finance charge disclosures contained in 

§ 226.6(a)(1) and (b)(3)(i) and § 226.7(a)(4) through (7) and (b)(4) through (6) and the 

right of rescission set forth in § 226.15) and subpart C, any card issuer that extends 

closed-end credit that is subject to a finance charge or is payable by written agreement in 

more than four installments.

 3

 [Reserved]
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person did not meet these numerical standards in the preceding calendar year, the 

numerical standards shall be applied to the current calendar year. A person regularly 

extends consumer credit if, in any 12-month period, the person originates more than one 

credit extension that is subject to the requirements of § 226.32 or one or more such credit 

extensions through a mortgage broker.

(18) Downpayment means an amount, including the value of property used as a 

trade-in, paid to a seller to reduce the cash price of goods or services purchased in a credit 

sale transaction. A deferred portion of a downpayment may be treated as part of the 

downpayment if it is payable not later than the due date of the second otherwise regularly 

scheduled payment and is not subject to a finance charge.

(19) Dwelling means a residential structure that contains one to four units, 

whether or not that structure is attached to real property. The term includes an individual 

condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence.

(20) Open-end credit means consumer credit extended by a creditor under a plan 

in which:

(i) The creditor reasonably contemplates repeated transactions;

(ii) The creditor may impose a finance charge from time to time on an 

outstanding unpaid balance; and

(iii) The amount of credit that may be extended to the consumer during the term 

of the plan (up to any limit set by the creditor) is generally made available to the extent 

that any outstanding balance is repaid.

(21) Periodic rate means a rate of finance charge that is or may be imposed by a 

creditor on a balance for a day, week, month, or other subdivision of a year.
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(22) Person means a natural person or an organization, including a corporation, 

partnership, proprietorship, association, cooperative, estate, trust, or government unit.

(23) Prepaid finance charge means any finance charge paid separately in cash or 

by check before or at consummation of a transaction, or withheld from the proceeds of 

the credit at any time.

(24) Residential mortgage transaction means a transaction in which a mortgage, 

deed of trust, purchase money security interest arising under an installment sales contract, 

or equivalent consensual security interest is created or retained in the consumer’s 

principal dwelling to finance the acquisition or initial construction of that dwelling.

(25) Security interest means an interest in property that secures performance of a 

consumer credit obligation and that is recognized by state or federal law. It does not 

include incidental interests such as interests in proceeds, accessions, additions, fixtures, 

insurance proceeds (whether or not the creditor is a loss payee or beneficiary), premium 

rebates, or interests in after-acquired property. For purposes of disclosures under § 226.6 

and § 226.18, the term does not include an interest that arises solely by operation of law. 

However, for purposes of the right of rescission under § 226.15 and § 226.23, the term 

does include interests that arise solely by operation of law.

(26) State means any state, the District of Columbia, the Commonwealth of 

Puerto Rico, and any territory or possession of the United States.

(b) Rules of construction. For purposes of this regulation, the following rules of 

construction apply:

(1) Where appropriate, the singular form of a word includes the plural form and 

plural includes singular.
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(2) Where the words obligation and transaction are used in the regulation, they 

refer to a consumer credit obligation or transaction, depending upon the context. Where 

the work credit is used in the regulation, it means consumer credit unless the context 

clearly indicates otherwise.

(3) Unless defined in this regulation, the words used have the meanings given to 

them by state law or contract.

(4) Footnotes have the same legal effect as the text of the regulation.

(5) Where the word amount is used in this regulation to describe disclosure 

requirements, it refers to a numerical amount.

4. Section 226.3 is amended by republishing paragraphs (a), (b), (c), (d), (e), and 

(f), adding a new paragraph (g), and removing and reserving footnote 4 to read as 

follows:

§ 226.3 Exempt transactions.

This regulation does not apply to the following:4

(a) Business, commercial, agricultural, or organizational credit. 

(1) An extension of credit primarily for a business, commercial or agricultural 

purpose.

(2) An extension of credit to other than a natural person, including credit to 

government agencies or instrumentalities.

(b) Credit over $25,000 not secured by real property or a dwelling. An extension 

of credit not secured by real property, or by personal property used or expected to be used 

 4 [Reserved]
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as the principal dwelling of the consumer, in which the amount financed exceeds $25,000 

or in which there is an express written commitment to extend credit in excess of $25,000.

(c) Public utility credit. An extension of credit that involves public utility 

services provided through pipe, wire, other connected facilities, or radio or similar 

transmission (including extensions of such facilities), if the charges for service, delayed 

payment, or any discounts for prompt payment are filed with or regulated by any 

government unit. The financing of durable goods or home improvements by a public 

utility is not exempt.

(d) Securities or commodities accounts. Transactions in securities or 

commodities accounts in which credit is extended by a broker-dealer registered with the 

Securities and Exchange Commission or the Commodity Futures Trading Commission.

(e) Home fuel budget plans. An installment agreement for the purchase of home 

fuels in which no finance charge is imposed.

(f) Student loan programs. Loans made, insured, or guaranteed pursuant to a 

program authorized by title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et 

seq.).

(g) Employer-sponsored retirement plans. An extension of credit to a participant 

in an employer-sponsored retirement plan qualified under Section 401(a) of the Internal 

Revenue Code, a tax-sheltered annuity under Section 403(b) of the Internal Revenue 

Code, or an eligible governmental deferred compensation plan under Section 457(b) of 

the Internal Revenue Code (26 U.S.C. 401(a); 26 U.S.C. 403(b); 26 U.S.C. 457(b)), 

provided that the extension of credit is comprised of fully vested funds from such 
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participant’s account and is made in compliance with the Internal Revenue Code 

(26 U.S.C. 1 et seq.).

5. Section 226.4 is amended by republishing paragraphs (a), (c), (e), and (f), 

revising paragraphs (b) and (d), and removing and reserving footnotes 5 and 6 to read as 

follows:

§ 226.4 Finance charge.

(a) Definition. The finance charge is the cost of consumer credit as a dollar 

amount. It includes any charge payable directly or indirectly by the consumer and 

imposed directly or indirectly by the creditor as an incident to or a condition of the 

extension of credit. It does not include any charge of a type payable in a comparable cash 

transaction.

(1) Charges by third parties. The finance charge includes fees and amounts 

charged by someone other than the creditor, unless otherwise excluded under this section, 

if the creditor:

(i) Requires the use of a third party as a condition of or an incident to the 

extension of credit, even if the consumer can choose the third party; or

(ii) Retains a portion of the third-party charge, to the extent of the portion 

retained.

(2) Special rule; closing agent charges. Fees charged by a third party that 

conducts the loan closing (such as a settlement agent, attorney, or escrow or title 

company) are finance charges only if the creditor—

(i) Requires the particular services for which the consumer is charged;

(ii) Requires the imposition of the charge; or
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(iii) Retains a portion of the third-party charge, to the extent of the portion 

retained.

(3) Special rule; mortgage broker fees. Fees charged by a mortgage broker 

(including fees paid by the consumer directly to the broker or to the creditor for delivery 

to the broker) are finance charges even if the creditor does not require the consumer to 

use a mortgage broker and even if the creditor does not retain any portion of the charge.

(b) Examples of finance charges. The finance charge includes the following 

types of charges, except for charges specifically excluded by paragraphs (c) through (e) 

of this section:

(1) Interest, time price differential, and any amount payable under an add-on or 

discount system of additional charges.

(2) Service, transaction, activity, and carrying charges, including any charge 

imposed on a checking or other transaction account to the extent that the charge exceeds 

the charge for a similar account without a credit feature.

(3) Points, loan fees, assumption fees, finder’s fees, and similar charges.

(4) Appraisal, investigation, and credit report fees.

(5) Premiums or other charges for any guarantee or insurance protecting the 

creditor against the consumer’s default or other credit loss.

(6) Charges imposed on a creditor by another person for purchasing or accepting 

a consumer’s obligation, if the consumer is required to pay the charges in cash, as an 

addition to the obligation, or as a deduction from the proceeds of the obligation.

(7) Premiums or other charges for credit life, accident, health, or loss-of-income 

insurance, written in connection with a credit transaction.
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(8) Premiums or other charges for insurance against loss of or damage to 

property, or against liability arising out of the ownership or use of property, written in 

connection with a credit transaction.

(9) Discounts for the purpose of inducing payment by a means other than the use 

of credit.

(10) Charges or premiums paid for debt cancellation or debt suspension coverage 

written in connection with a credit transaction, whether or not the coverage is insurance 

under applicable law.

(c) Charges excluded from the finance charge. The following charges are not 

finance charges:

(1) Application fees charged to all applicants for credit, whether or not credit is 

actually extended.

(2) Charges for actual unanticipated late payment, for exceeding a credit limit, or 

for delinquency, default, or a similar occurrence.

(3) Charges imposed by a financial institution for paying items that overdraw an 

account, unless the payment of such items and the imposition of the charge were 

previously agreed upon in writing.

(4) Fees charged for participation in a credit plan, whether assessed on an annual 

or other periodic basis.

(5) Seller’s points.

(6) Interest forfeited as a result of an interest reduction required by law on a time 

deposit used as security for an extension of credit.
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(7) Real-estate related fees. The following fees in a transaction secured by real 

property or in a residential mortgage transaction, if the fees are bona fide and reasonable 

in amount:

(i) Fees for title examination, abstract of title, title insurance, property survey, 

and similar purposes.

(ii) Fees for preparing loan-related documents, such as deeds, mortgages, and 

reconveyance or settlement documents.

(iii) Notary and credit-report fees.

(iv) Property appraisal fees or fees for inspections to assess the value or condition 

of the property if the service is performed prior to closing, including fees related to 

pest-infestation or flood-hazard determinations.

(v) Amounts required to be paid into escrow or trustee accounts if the amounts 

would not otherwise be included in the finance charge.

(8) Discounts offered to induce payment for a purchase by cash, check, or other 

means, as provided in section 167(b) of the act.

(d) Insurance and debt cancellation and debt suspension coverage. 

(1) Voluntary credit insurance premiums. Premiums for credit life, accident, 

health, or loss-of-income insurance may be excluded from the finance charge if the 

following conditions are met:

(i) The insurance coverage is not required by the creditor, and this fact is 

disclosed in writing.

(ii) The premium for the initial term of insurance coverage is disclosed in 

writing. If the term of insurance is less than the term of the transaction, the term of 
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insurance also shall be disclosed. The premium may be disclosed on a unit-cost basis 

only in open-end credit transactions, closed-end credit transactions by mail or telephone 

under § 226.17(g), and certain closed-end credit transactions involving an insurance plan 

that limits the total amount of indebtedness subject to coverage.

(iii) The consumer signs or initials an affirmative written request for the 

insurance after receiving the disclosures specified in this paragraph, except as provided in 

paragraph (d)(4) of this section. Any consumer in the transaction may sign or initial the 

request.

(2) Property insurance premiums. Premiums for insurance against loss of or 

damage to property, or against liability arising out of the ownership or use of property, 

including single interest insurance if the insurer waives all right of subrogation against 

the consumer,5

(i) The insurance coverage may be obtained from a person of the consumer’s 

choice,

may be excluded from the finance charge if the following conditions are 

met:

6

(ii) If the coverage is obtained from or through the creditor, the premium for the 

initial term of insurance coverage shall be disclosed. If the term of insurance is less than 

the term of the transaction, the term of insurance shall also be disclosed. The premium 

may be disclosed on a unit-cost basis only in open-end credit transactions, closed-end 

credit transactions by mail or telephone under § 226.17(g), and certain closed-end credit 

and this fact is disclosed. (A creditor may reserve the right to refuse to accept, 

for reasonable cause, an insurer offered by the consumer.)

 5 [Reserved]

6 [Reserved]
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transactions involving an insurance plan that limits the total amount of indebtedness 

subject to coverage.

(3) Voluntary debt cancellation or debt suspension fees. Charges or premiums 

paid for debt cancellation coverage for amounts exceeding the value of the collateral 

securing the obligation or for debt cancellation or debt suspension coverage in the event 

of the loss of life, health, or income or in case of accident may be excluded from the 

finance charge, whether or not the coverage is insurance, if the following conditions are 

met:

(i) The debt cancellation or debt suspension agreement or coverage is not 

required by the creditor, and this fact is disclosed in writing;

(ii) The fee or premium for the initial term of coverage is disclosed in writing. If 

the term of coverage is less than the term of the credit transaction, the term of coverage 

also shall be disclosed. The fee or premium may be disclosed on a unit-cost basis only in 

open-end credit transactions, closed-end credit transactions by mail or telephone under 

§ 226.17(g), and certain closed-end credit transactions involving a debt cancellation 

agreement that limits the total amount of indebtedness subject to coverage;

(iii) The following are disclosed, as applicable, for debt suspension coverage: 

That the obligation to pay loan principal and interest is only suspended, and that interest 

will continue to accrue during the period of suspension.

(iv) The consumer signs or initials an affirmative written request for coverage 

after receiving the disclosures specified in this paragraph, except as provided in 

paragraph (d)(4) of this section. Any consumer in the transaction may sign or initial the 

request.
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(4) Telephone purchases. If a consumer purchases credit insurance or debt 

cancellation or debt suspension coverage for an open-end (not home-secured) plan by 

telephone, the creditor must make the disclosures under paragraphs (d)(1)(i) and (ii) or 

(d)(3)(i) through (iii) of this section, as applicable, orally. In such a case, the creditor 

shall:

(i) Maintain evidence that the consumer, after being provided the disclosures

orally, affirmatively elected to purchase the insurance or coverage; and

(ii) Mail the disclosures under paragraphs (d)(1)(i) and (ii) or 

(d)(3)(i) through (iii) of this section, as applicable, within three business days after the 

telephone purchase.

(e) Certain security interest charges. If itemized and disclosed, the following 

charges may be excluded from the finance charge:

(1) Taxes and fees prescribed by law that actually are or will be paid to public 

officials for determining the existence of or for perfecting, releasing, or satisfying a 

security interest.

(2) The premium for insurance in lieu of perfecting a security interest to the 

extent that the premium does not exceed the fees described in paragraph (e)(1) of this 

section that otherwise would be payable.

(3) Taxes on security instruments. Any tax levied on security instruments or on 

documents evidencing indebtedness if the payment of such taxes is a requirement for 

recording the instrument securing the evidence of indebtedness.
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(f) Prohibited offsets. Interest, dividends, or other income received or to be 

received by the consumer on deposits or investments shall not be deducted in computing 

the finance charge.

6. Section 226.5 is amended by revising paragraphs (a) and (b), republishing 

paragraphs (c), (d), and (e), and removing and reserving footnotes 7 through 10 to read as 

follows:

SUBPART B—OPEN-END CREDIT

§ 226.5 General disclosure requirements.

(a) Form of disclosures. (1) General. (i) The creditor shall make the disclosures 

required by this subpart clearly and conspicuously. 

(ii) The creditor shall make the disclosures required by this subpart in writing,7 in 

a form that the consumer may keep8

(B) The following disclosures need not be in a retainable form: Disclosures that 

need not be written under paragraph (a)(1)(ii)(A) of this section; disclosures for credit 

and charge card applications and solicitations under § 226.5a; home-equity disclosures

under § 226.5b(d); the alternative summary billing-rights statement under § 226.9(a)(2);

, except that:

(A) The following disclosures need not be written: Disclosures under 

§ 226.6(b)(3) of charges that are imposed as part of an open-end (not home-secured) plan 

that are not required to be disclosed under § 226.6(b)(2) and related disclosures under 

§ 226.9(c)(2)(ii)(B) of charges; disclosures under § 226.9(c)(2)(v); and disclosures under 

§ 226.9(d) when a finance charge is imposed at the time of the transaction.

 7

 [Reserved]

8

 [Reserved]
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the credit and charge card renewal disclosures required under § 226.9(e); and the 

payment requirements under § 226.10(b), except as provided in § 226.7(b)(13). 

(iii) The disclosures required by this subpart may be provided to the consumer in 

electronic form, subject to compliance with the consumer consent and other applicable 

provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign 

Act) (15 U.S.C. 7001 et seq.). The disclosures required by §§ 226.5a, 226.5b, and 226.16 

may be provided to the consumer in electronic form without regard to the consumer 

consent or other provisions of the E-Sign Act in the circumstances set forth in those 

sections. 

(2) Terminology. (i) Terminology used in providing the disclosures required by 

this subpart shall be consistent.

(ii) For home-equity plans subject to § 226.5b, the terms finance charge and 

annual percentage rate, when required to be disclosed with a corresponding amount or 

percentage rate, shall be more conspicuous than any other required disclosure.9

(iii) If disclosures are required to be presented in a tabular format pursuant to 

paragraph (a)(3) of this section, the term penalty APR shall be used, as applicable. The 

term penalty APR need not be used in reference to the annual percentage rate that applies 

with the loss of a promotional rate, assuming the annual percentage rate that applies is not 

greater than the annual percentage rate that would have applied at the end of the 

promotional period; or if the annual percentage rate that applies with the loss of a 

promotional rate is a variable rate, the annual percentage rate is calculated using the same 

 The 

terms need not be more conspicuous when used for periodic statement disclosures under 

§ 226.7(a)(4) and for advertisements under § 226.16.

 9

 [Reserved]
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index and margin as would have been used to calculate the annual percentage rate that 

would have applied at the end of the promotional period. If credit insurance or debt 

cancellation or debt suspension coverage is required as part of the plan, the term required

shall be used and the program shall be identified by its name. If an annual percentage 

rate is required to be presented in a tabular format pursuant to paragraph (a)(3)(i) or 

(a)(3)(iii) of this section, the term fixed, or a similar term, may not be used to describe 

such rate unless the creditor also specifies a time period that the rate will be fixed and the 

rate will not increase during that period, or if no such time period is provided, the rate 

will not increase while the plan is open.

(3) Specific formats. (i) Certain disclosures for credit and charge card 

applications and solicitations must be provided in a tabular format in accordance with the 

requirements of § 226.5a(a)(2).

(ii) Certain disclosures for home-equity plans must precede other disclosures and 

must be given in accordance with the requirements of § 226.5b(a).

(iii) Certain account-opening disclosures must be provided in a tabular format in 

accordance with the requirements of § 226.6(b)(1).

(iv) Certain disclosures provided on periodic statements must be grouped 

together in accordance with the requirements of § 226.7(b)(6) and (b)(13).

(v) Certain disclosures accompanying checks that access a credit card account 

must be provided in a tabular format in accordance with the requirements of 

§ 226.9(b)(3).

(vi) Certain disclosures provided in a change-in-terms notice must be provided in 

a tabular format in accordance with the requirements of § 226.9(c)(2)(iii)(B).
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22

(vii) Certain disclosures provided when a rate is increased due to delinquency, 

default or as a penalty must be provided in a tabular format in accordance with the 

requirements of § 226.9(g)(3)(ii).

(b) Time of disclosures. (1) Account-opening disclosures. (i) General rule. 

The creditor shall furnish account-opening disclosures required by § 226.6 before the first 

transaction is made under the plan.

(ii) Charges imposed as part of an open-end (not home-secured) plan. Charges 

that are imposed as part of an open-end (not home-secured) plan and are not required to 

be disclosed under § 226.6(b)(2) may be disclosed after account opening but before the 

consumer agrees to pay or becomes obligated to pay for the charge, provided they are 

disclosed at a time and in a manner that a consumer would be likely to notice them. This 

provision does not apply to charges imposed as part of a home-equity plan subject to the 

requirements of § 226.5b.

(iii) Telephone purchases. Disclosures required by § 226.6 may be provided as 

soon as reasonably practicable after the first transaction if:

(A) The first transaction occurs when a consumer contacts a merchant by 

telephone to purchase goods and at the same time the consumer accepts an offer to 

finance the purchase by establishing an open-end plan with the merchant or third-party 

creditor;

(B) The merchant or third-party creditor permits consumers to return any goods 

financed under the plan and provides consumers with a sufficient time to reject the plan 

and return the goods free of cost after the merchant or third-party creditor has provided 

the written disclosures required by § 226.6; and
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(C) The consumer’s right to reject the plan and return the goods is disclosed to 

the consumer as a part of the offer to finance the purchase.

(iv) Membership fees. (A) General. In general, a creditor may not collect any 

fee before account-opening disclosures are provided. A creditor may collect, or obtain 

the consumer’s agreement to pay, membership fees, including application fees excludable 

from the finance charge under § 226.4(c)(1), before providing account-opening 

disclosures if, after receiving the disclosures, the consumer may reject the plan and have 

no obligation to pay (1) these fees (including application fees) or (2) any other fee or 

charge. A membership fee for purposes of this paragraph has the same meaning as a fee 

for the issuance or availability of credit described in § 226.5a(b)(2). If the consumer 

rejects the plan, the creditor must promptly refund the membership fee if it has been paid, 

or take other action necessary to ensure the consumer is not obligated to pay that fee or 

any other fee or charge. 

(B) Home-equity plans. Creditors offering home-equity plans subject to the

requirements of § 226.5b are not subject to the requirements of paragraph (b)(1)(iv)(A) of 

this section.

(v) Application fees. A creditor may collect an application fee excludable from 

the finance charge under § 226.4(c)(1) before providing account-opening disclosures. 

However, if a consumer rejects the plan after receiving account-opening disclosures, the 

consumer must have no obligation to pay such an application fee, or if the fee was paid, it 

must be refunded. See § 226.5(b)(1)(iv).

(2) Periodic statements. (i) The creditor shall mail or deliver a periodic 

statement as required by § 226.7 for each billing cycle at the end of which an account has 
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24

a debit or credit balance of more than $1 or on which a finance charge has been imposed. 

A periodic statement need not be sent for an account if the creditor deems it uncollectible, 

if delinquency collection proceedings have been instituted, if the creditor has charged off 

the account in accordance with loan-loss provisions and will not charge any additional 

fees or interest on the account, or if furnishing the statement would violate federal law.

(ii) The creditor shall mail or deliver the periodic statement at least 14 days prior 

to any date or the end of any time period required to be disclosed under § 226.7(a)(8) or 

(b)(8), as applicable, for the consumer to avoid an additional finance or other charge.

10

 10 [Reserved]

A 

creditor that fails to meet this requirement shall not collect any finance or other charge 

imposed as a result of such failure. 

(iii) The timing requirement under this paragraph (b)(2) does not apply if the 

creditor is unable to meet the requirement because of an act of God, war, civil disorder, 

natural disaster, or strike.

(3) Credit and charge card application and solicitation disclosures. The card 

issuer shall furnish the disclosures for credit and charge card applications and 

solicitations in accordance with the timing requirements of § 226.5a.

(4) Home-equity plans. Disclosures for home-equity plans shall be made in 

accordance with the timing requirements of § 226.5b(b).

(c) Basis of disclosures and use of estimates. Disclosures shall reflect the terms 

of the legal obligation between the parties. If any information necessary for accurate 

disclosure is unknown to the creditor, it shall make the disclosure based on the best 

information reasonably available and shall state clearly that the disclosure is an estimate.
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(d) Multiple creditors; multiple consumers. If the credit plan involves more than 

one creditor, only one set of disclosures shall be given, and the creditors shall agree 

among themselves which creditor must comply with the requirements that this regulation 

imposes on any or all of them. If there is more than one consumer, the disclosures may 

be made to any consumer who is primarily liable on the account. If the right of rescission 

under § 226.15 is applicable, however, the disclosures required by §§ 226.6 and

226.15(b) shall be made to each consumer having the right to rescind.

(e) Effect of subsequent events. If a disclosure becomes inaccurate because of an 

event that occurs after the creditor mails or delivers the disclosures, the resulting 

inaccuracy is not a violation of this regulation, although new disclosures may be required 

under § 226.9(c).

7. Section 226.5a is amended by revising paragraphs (a), (b), (c), (d), (e), and (f), 

and republishing paragraphs (g)(1) through (g)(4); and adding paragraph (g)(5) to read as 

follows:

§ 226.5a Credit and charge card applications and solicitations.

(a) General rules. The card issuer shall provide the disclosures required under 

this section on or with a solicitation or an application to open a credit or charge card 

account.

(1) Definition of solicitation. For purposes of this section, the term solicitation

means an offer by the card issuer to open a credit or charge card account that does not 

require the consumer to complete an application. A “firm offer of credit” as defined in 

section 603(l) of the Fair Credit Reporting Act (15 U.S.C. 1681a(l)) for a credit or charge 

card is a solicitation for purposes of this section.
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26

(2) Form of disclosures; tabular format. 

(i) The disclosures in paragraphs (b)(1) through (5) (except for (b)(1)(iv)(B)) and 

(b)(7) through (15) of this section made pursuant to paragraph (c), (d)(2), (e)(1) or (f) of 

this section generally shall be in the form of a table with headings, content, and format 

substantially similar to any of the applicable tables found in G-10 in appendix G. 

(ii) The table described in paragraph (a)(2)(i) of this section shall contain only the 

information required or permitted by this section. Other information may be presented on 

or with an application or solicitation, provided such information appears outside the 

required table.

(iii) Disclosures required by paragraphs (b)(1)(iv)(B) and (b)(6) of this section 

must be placed directly beneath the table. 

(iv) When a tabular format is required, any annual percentage rate required to be 

disclosed pursuant to paragraph (b)(1) of this section, any introductory rate permitted to 

be disclosed pursuant to paragraph (b)(1)(ii) or required to be disclosed under paragraph 

(b)(1)(vii) of this section, any rate that will apply after a premium initial rate expires 

permitted to be disclosed under paragraph (b)(1)(iii) or required to be disclosed under 

paragraph (b)(1)(vii), and any fee or percentage amounts required to be disclosed 

pursuant to paragraphs (b)(2), (b)(4), (b)(8) through (b)(13) of this section must be 

disclosed in bold text. However, bold text shall not be used for: Any maximum limits on 

fee amounts disclosed in the table that do not relate to fees that vary by state; the amount 

of any periodic fee disclosed pursuant to paragraph (b)(2) of this section that is not an 

annualized amount; and other annual percentage rates or fee amounts disclosed in the 

table.
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(v) For an application or a solicitation that is accessed by the consumer in 

electronic form, the disclosures required under this section may be provided to the 

consumer in electronic form on or with the application or solicitation.

(vi)(A) Except as provided in paragraph (a)(2)(vi)(B) of this section, the table 

described in paragraph (a)(2)(i) of this section must be provided in a prominent location 

on or with an application or a solicitation.

(B) If the table described in paragraph (a)(2)(i) of this section is provided 

electronically, it must be provided in close proximity to the application or solicitation.

(3) Fees based on a percentage. If the amount of any fee required to be disclosed 

under this section is determined on the basis of a percentage of another amount, the 

percentage used and the identification of the amount against which the percentage is 

applied may be disclosed instead of the amount of the fee. 

(4) Fees that vary by state. Card issuers that impose fees referred to in 

paragraphs (b)(8) through (12) of this section that vary by state may, at the issuer’s 

option, disclose in the table (i) the specific fee applicable to the consumer’s account, or 

(ii) the range of the fees, if the disclosure includes a statement that the amount of the fee 

varies by state and refers the consumer to a disclosure provided with the table where the 

amount of the fee applicable to the consumer’s account is disclosed. A card issuer may 

not list fees for multiple states in the table.

(5) Exceptions. This section does not apply to: 

(i) Home-equity plans accessible by a credit or charge card that are subject to the 

requirements of § 226.5b; 
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28

(ii) Overdraft lines of credit tied to asset accounts accessed by check-guarantee 

cards or by debit cards; 

(iii) Lines of credit accessed by check-guarantee cards or by debit cards that can 

be used only at automated teller machines;

(iv) Lines of credit accessed solely by account numbers; 

(v) Additions of a credit or charge card to an existing open-end plan;

(vi) General purpose applications unless the application, or material 

accompanying it, indicates that it can be used to open a credit or charge card account; or

(vii) Consumer-initiated requests for applications.

(b) Required disclosures. The card issuer shall disclose the items in this 

paragraph on or with an application or a solicitation in accordance with the requirements 

of paragraphs (c), (d), (e)(1) or (f) of this section. A credit card issuer shall disclose all 

applicable items in this paragraph except for paragraph (b)(7) of this section. A charge 

card issuer shall disclose the applicable items in paragraphs (b)(2), (4), (7) through (12), 

and (15) of this section. 

(1) Annual percentage rate. Each periodic rate that may be used to compute the 

finance charge on an outstanding balance for purchases, a cash advance, or a balance 

transfer, expressed as an annual percentage rate (as determined by § 226.14(b)). When 

more than one rate applies for a category of transactions, the range of balances to which 

each rate is applicable shall also be disclosed. The annual percentage rate for purchases 

disclosed pursuant to this paragraph shall be in at least 16-point type, except for the 

following: Oral disclosures of the annual percentage rate for purchases; or a penalty rate 

that may apply upon the occurrence of one or more specific events.
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29

(i) Variable rate information. If a rate disclosed under paragraph (b)(1) of this 

section is a variable rate, the card issuer shall also disclose the fact that the rate may vary 

and how the rate is determined. In describing how the applicable rate will be determined, 

the card issuer must identify the type of index or formula that is used in setting the rate. 

The value of the index and the amount of the margin that are used to calculate the 

variable rate shall not be disclosed in the table. A disclosure of any applicable limitations 

on rate increases or decreases shall not be included in the table. 

(ii) Discounted initial rate. If the initial rate is an introductory rate, as that term is 

defined in § 226.16(g)(2)(ii), the card issuer must disclose the rate that would otherwise 

apply to the account pursuant to paragraph (b)(1) of this section. Where the rate is not 

tied to an index or formula, the card issuer must disclose the rate that will apply after the 

introductory rate expires. In a variable-rate account, the card issuer must disclose a rate 

based on the applicable index or formula in accordance with the accuracy requirements 

set forth in paragraphs (c), (d), or (e) of this section, as applicable. Except as provided in 

paragraph (b)(1)(vii) of this section, the issuer is not required to, but may disclose in the 

table the introductory rate along with the rate that would otherwise apply to the account if 

the card issuer also discloses the time period during which the introductory rate will 

remain in effect, and uses the term “introductory” or “intro” in immediate proximity to 

the introductory rate. 

(iii) Premium initial rate. If the initial rate is temporary and is higher than the 

rate that will apply after the temporary rate expires, the card issuer must disclose the 

premium initial rate pursuant to paragraph (b)(1) of this section. Except as provided in 

paragraph (b)(1)(vii) of this section, the issuer is not required to, but may disclose in the 
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30

table the rate that will apply after the premium initial rate expires if the issuer also 

discloses the time period during which the premium initial rate will remain in effect. 

Consistent with paragraph (b)(1) of this section, the premium initial rate for purchases 

must be in at least 16-point type. If the issuer also discloses in the table the rate that will 

apply after the premium initial rate for purchases expires, that rate also must be in at least 

16-point type.

(iv) Penalty rates. (A) In general. Except as provided in paragraph 

(b)(1)(iv)(B), if a rate may increase as a penalty for one or more events specified in the 

account agreement, such as a late payment or an extension of credit that exceeds the 

credit limit, the card issuer must disclose pursuant to paragraph (b)(1) of this section the 

increased rate that may apply, a brief description of the event or events that may result in 

the increased rate, and a brief description of how long the increased rate will remain in 

effect. 

(B) Introductory rates. If the issuer discloses an introductory rate, as that term is

defined in § 226.16(g)(2)(ii), in the table or in any written or electronic promotional 

materials accompanying applications or solicitations subject to paragraph (c) or (e) of this 

section, the issuer must briefly disclose directly beneath the table the circumstances, if 

any, under which the introductory rate may be revoked, and the type of rate that will 

apply after the introductory rate is revoked.

(v) Rates that depend on consumer’s creditworthiness. If a rate cannot be

determined at the time disclosures are given because the rate depends, at least in part, on 

a later determination of the consumer’s creditworthiness, the card issuer must disclose the 

specific rates or the range of rates that could apply and a statement that the rate for which 
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31

the consumer may qualify at account opening will depend on the consumer’s 

creditworthiness, and other factors if applicable. If the rate that depends, at least in part, 

on a later determination of the consumer’s creditworthiness is a penalty rate, as described 

in paragraph (b)(1)(iv) of this section, the card issuer at its option may disclose the 

highest rate that could apply, instead of disclosing the specific rates or the range of rates 

that could apply. 

(vi) APRs that vary by state. Issuers imposing annual percentage rates that vary 

by state may, at the issuer’s option, disclose in the table (A) the specific annual 

percentage rate applicable to the consumer’s account, or (B) the range of the annual 

percentage rates, if the disclosure includes a statement that the annual percentage rate

varies by state and refers the consumer to a disclosure provided with the table where the 

annual percentage rate applicable to the consumer’s account is disclosed. A card issuer 

may not list annual percentage rates for multiple states in the table.

(vii) Issuers subject to 12 CFR § 227.24 or similar law. Notwithstanding 

paragraphs (b)(1)(ii) and (b)(1)(iii) of this section, issuers that are subject to 12 CFR 

§ 227.24 or similar law must disclose in the table (A) any introductory rate applicable to 

the account, consistent with the requirements of paragraph (b)(1)(ii) of this section, and

(B) any rate applicable upon the expiration of a premium initial rate, consistent with the 

requirements of paragraph (b)(1)(iii) of this section.

(2) Fees for issuance or availability. (i) Any annual or other periodic fee that 

may be imposed for the issuance or availability of a credit or charge card, including any 

fee based on account activity or inactivity; how frequently it will be imposed; and the 

annualized amount of the fee. 
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(ii) Any non-periodic fee that relates to opening an account. A card issuer must 

disclose that the fee is a one-time fee. 

(3) Fixed finance charge; minimum interest charge. Any fixed finance charge 

and a brief description of the charge. Any minimum interest charge if it exceeds $1.00 

that could be imposed during a billing cycle, and a brief description of the charge. The 

$1.00 threshold amount shall be adjusted periodically by the Board to reflect changes in 

the Consumer Price Index. The Board shall calculate each year a price level adjusted 

minimum interest charge using the Consumer Price Index in effect on the June 1 of that 

year. When the cumulative change in the adjusted minimum value derived from applying 

the annual Consumer Price level to the current minimum interest charge threshold has 

risen by a whole dollar, the minimum interest charge will be increased by $1.00. The 

issuer may, at its option, disclose in the table minimum interest charges below this

threshold.

(4) Transaction charges. Any transaction charge imposed by the card issuer for 

the use of the card for purchases.

(5) Grace period. The date by which or the period within which any credit 

extended for purchases may be repaid without incurring a finance charge due to a 

periodic interest rate and any conditions on the availability of the grace period. If no 

grace period is provided, that fact must be disclosed. If the length of the grace period 

varies, the card issuer may disclose the range of days, the minimum number of days, or 

the average number of days in the grace period, if the disclosure is identified as a range, 

minimum, or average. In disclosing in the tabular format a grace period that applies to all 

types of purchases, the phrase “How to Avoid Paying Interest on Purchases” shall be 
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used as the heading for the row describing the grace period. If a grace period is not 

offered on all types of purchases, in disclosing this fact in the tabular format, the phrase 

“Paying Interest” shall be used as the heading for the row describing this fact.

(6) Balance computation method. The name of the balance computation method 

listed in paragraph (g) of this section that is used to determine the balance for purchases 

on which the finance charge is computed, or an explanation of the method used if it is not 

listed. In determining which balance computation method to disclose, the card issuer 

shall assume that credit extended for purchases will not be repaid within the grace period, 

if any.

(7) Statement on charge card payments. A statement that charges incurred by use 

of the charge card are due when the periodic statement is received.

(8) Cash advance fee. Any fee imposed for an extension of credit in the form of 

cash or its equivalent. 

(9) Late-payment fee. Any fee imposed for a late payment.

(10) Over-the-limit fee. Any fee imposed for exceeding a credit limit.

(11) Balance transfer fee. Any fee imposed to transfer an outstanding balance. 

(12) Returned-payment fee. Any fee imposed by the card issuer for a returned 

payment.

(13) Required insurance, debt cancellation or debt suspension coverage. (i) A 

fee for insurance described in § 226.4(b)(7) or debt cancellation or suspension coverage 

described in § 226.4(b)(10), if the insurance or debt cancellation or suspension coverage 

is required as part of the plan; and 
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(ii) A cross reference to any additional information provided about the insurance 

or coverage accompanying the application or solicitation, as applicable.

(14) Available credit. If a card issuer requires fees for the issuance or availability 

of credit described in paragraph (b)(2) of this section, or requires a security deposit for 

such credit, and the total amount of those required fees and/or security deposit that will 

be imposed and charged to the account when the account is opened is 15 percent or more 

of the minimum credit limit for the card, a card issuer must disclose the available credit 

remaining after these fees or security deposit are debited to the account, assuming that the 

consumer receives the minimum credit limit. In determining whether the 15 percent 

threshold test is met, the issuer must only consider fees for issuance or availability of 

credit, or a security deposit, that are required. If fees for issuance or availability are 

optional, these fees should not be considered in determining whether the disclosure must 

be given. Nonetheless, if the 15 percent threshold test is met, the issuer in providing the 

disclosure must disclose the amount of available credit calculated by excluding those 

optional fees, and the available credit including those optional fees. This paragraph does 

not apply with respect to fees or security deposits that are not debited to the account.

(15) Web site reference. A reference to the Web site established by the Board 

and a statement that consumers may obtain on the Web site information about shopping 

for and using credit cards.

(c) Direct mail and electronic applications and solicitations. (1) General. The 

card issuer shall disclose the applicable items in paragraph (b) of this section on or with 

an application or solicitation that is mailed to consumers or provided to consumers in 

electronic form.
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(2) Accuracy. (i) Disclosures in direct mail applications and solicitations must be 

accurate as of the time the disclosures are mailed. An accurate variable annual 

percentage rate is one in effect within 60 days before mailing.

(ii) Disclosures provided in electronic form must be accurate as of the time they 

are sent, in the case of disclosures sent to a consumer’s e-mail address, or as of the time 

they are viewed by the public, in the case of disclosures made available at a location such 

as a card issuer’s Web site. An accurate variable annual percentage rate provided in 

electronic form is one in effect within 30 days before it is sent to a consumer’s e-mail 

address, or viewed by the public, as applicable.

(d) Telephone applications and solicitations. (1) Oral disclosure. The card 

issuer shall disclose orally the information in paragraphs (b)(1) through (7) and (b)(14) of 

this section, to the extent applicable, in a telephone application or solicitation initiated by 

the card issuer.

(2) Alternative disclosure. The oral disclosure under paragraph (d)(1) of this 

section need not be given if the card issuer either:

(i)(A) Does not impose a fee described in paragraph (b)(2) of this section; or 

(B) Imposes such a fee but provides the consumer with a right to reject the plan 

consistent with § 226.5(b)(1)(iv); and 

(ii) The card issuer discloses in writing within 30 days after the consumer 

requests the card (but in no event later than the delivery of the card) the following:

(A) The applicable information in paragraph (b) of this section; and

(B) As applicable, the fact that the consumer has the right to reject the plan and 

not be obligated to pay fees described in paragraph (b)(2) or any other fees or charges 
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36

until the consumer has used the account or made a payment on the account after receiving 

a billing statement.

(3) Accuracy. (i) The oral disclosures under paragraph (d)(1) of this section 

must be accurate as of the time they are given. 

(ii) The alternative disclosures under paragraph (d)(2) of this section generally 

must be accurate as of the time they are mailed or delivered. A variable annual 

percentage rate is one that is accurate if it was:

(A) In effect at the time the disclosures are mailed or delivered; or

(B) In effect as of a specified date (which rate is then updated from time to time, 

but no less frequently than each calendar month).

(e) Applications and solicitations made available to general public. The card 

issuer shall provide disclosures, to the extent applicable, on or with an application or 

solicitation that is made available to the general public, including one contained in a 

catalog, magazine, or other generally available publication. The disclosures shall be 

provided in accordance with paragraph (e)(1) or (e)(2) of this section.

(1) Disclosure of required credit information. The card issuer may disclose in a 

prominent location on the application or solicitation the following:

(i) The applicable information in paragraph (b) of this section;

(ii) The date the required information was printed, including a statement that the 

required information was accurate as of that date and is subject to change after that date; 

and
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37

(iii) A statement that the consumer should contact the card issuer for any change 

in the required information since it was printed, and a toll-free telephone number or a 

mailing address for that purpose.

(2) No disclosure of credit information. If none of the items in paragraph (b) of 

this section is provided on or with the application or solicitation, the card issuer may state 

in a prominent location on the application or solicitation the following:

(i) There are costs associated with the use of the card; and

(ii) The consumer may contact the card issuer to request specific information 

about the costs, along with a toll-free telephone number and a mailing address for that 

purpose.

(3) Prompt response to requests for information. Upon receiving a request for 

any of the information referred to in this paragraph, the card issuer shall promptly and 

fully disclose the information requested.

(4) Accuracy. The disclosures given pursuant to paragraph (e)(1) of this section 

must be accurate as of the date of printing. A variable annual percentage rate is accurate 

if it was in effect within 30 days before printing.

(f) In-person applications and solicitations. A card issuer shall disclose the 

information in paragraph (b) of this section, to the extent applicable, on or with an 

application or solicitation that is initiated by the card issuer and given to the consumer in 

person. A card issuer complies with the requirements of this paragraph if the issuer 

provides disclosures in accordance with paragraph (c)(1) or (e)(1) of this section.

(g) Balance computation methods defined. The following methods may be 

described by name. Methods that differ due to variations such as the allocation of 
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38

payments, whether the finance charge begins to accrue on the transaction date or the date 

of posting the transaction, the existence or length of a grace period, and whether the 

balance is adjusted by charges such as late-payment fees, annual fees and unpaid finance 

charges do not constitute separate balance computation methods.

(1)(i) Average daily balance (including new purchases). This balance is figured 

by adding the outstanding balance (including new purchases and deducting payments and 

credits) for each day in the billing cycle, and then dividing by the number of days in the 

billing cycle.

(ii) Average daily balance (excluding new purchases). This balance is figured by 

adding the outstanding balance (excluding new purchases and deducting payments and 

credits) for each day in the billing cycle, and then dividing by the number of days in the 

billing cycle.

(2)(i) Two-cycle average daily balance (including new purchases). This balance 

is the sum of the average daily balances for two billing cycles. The first balance is for the 

current billing cycle, and is figured by adding the outstanding balance (including new 

purchases and deducting payments and credits) for each day in the billing cycle, and then 

dividing by the number of days in the billing cycle. The second balance is for the 

preceding billing cycle.

(ii) Two-cycle average daily balance (excluding new purchases). This balance is 

the sum of the average daily balances for two billing cycles. The first balance is for the 

current billing cycle, and is figured by adding the outstanding balance (excluding new 

purchases and deducting payments and credits) for each day in the billing cycle, and then 
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39

dividing by the number of days in the billing cycle. The second balance is for the 

preceding billing cycle.

(3) Adjusted balance. This balance is figured by deducting payments and credits 

made during the billing cycle from the outstanding balance at the beginning of the billing 

cycle.

(4) Previous balance. This balance is the outstanding balance at the beginning of 

the billing cycle.

(5) Daily balance. For each day in the billing cycle, this balance is figured by

taking the beginning balance each day, adding any new purchases, and subtracting any 

payment and credits. 

8. Section 226.6 is amended by revising the heading, removing the introductory 

paragraph, revising paragraphs (a) and (b), removing paragraphs (c), (d), and (e), and 

removing and reserving footnotes 11 through 13 to read as follows:

§ 226.6 Account-opening disclosures.

(a) Rules affecting home-equity plans. The requirements of paragraph (a) of this 

section apply only to home-equity plans subject to the requirements of § 226.5b. A 

creditor shall disclose the items in this section, to the extent applicable:

(1) Finance charge. The circumstances under which a finance charge will be 

imposed and an explanation of how it will be determined, as follows. 

(i) A statement of when finance charges begin to accrue, including an explanation 

of whether or not any time period exists within which any credit extended may be repaid 

without incurring a finance charge. If such a time period is provided, a creditor may, at 
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its option and without disclosure, impose no finance charge when payment is received 

after the time period’s expiration.

(ii) A disclosure of each periodic rate that may be used to compute the finance 

charge, the range of balances to which it is applicable, 11 and the corresponding annual 

percentage rate.12

(iv) An explanation of how the amount of any finance charge will be 

determined,

 If a creditor offers a variable-rate plan, the creditor shall also disclose: 

the circumstances under which the rate(s) may increase; any limitations on the increase; 

and the effect(s) of an increase. When different periodic rates apply to different types of 

transactions, the types of transactions to which the periodic rates shall apply shall also be 

disclosed. A creditor is not required to adjust the range of balances disclosure to reflect 

the balance below which only a minimum charge applies.

(iii) An explanation of the method used to determine the balance on which the 

finance charge may be computed.

13

 11 [Reserved]

12 [Reserved]

13 [Reserved]

including a description of how any finance charge other than the periodic 

rate will be determined.

(2) Other charges. The amount of any charge other than a finance charge that 

may be imposed as part of the plan, or an explanation of how the charge will be 

determined.

(3) Home-equity plan information. The following disclosures described in 

§ 226.5b(d), as applicable:
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(i) A statement of the conditions under which the creditor may take certain 

action, as described in § 226.5b(d)(4)(i), such as terminating the plan or changing the 

terms.

(ii) The payment information described in § 226.5b(d)(5)(i) and (ii) for both the 

draw period and any repayment period.

(iii) A statement that negative amortization may occur as described in 

§ 226.5b(d)(9).

(iv) A statement of any transaction requirements as described in § 226.5b(d)(10).

(v) A statement regarding the tax implications as described in § 226.5b(d)(11).

(vi) A statement that the annual percentage rate imposed under the plan does not 

include costs other than interest as described in § 226.5b(d)(6) and (d)(12)(ii).

(vii) The variable-rate disclosures described in § 226.5b(d)(12)(viii), (d)(12)(x), 

(d)(12)(xi), and (d)(12)(xii), as well as the disclosure described in § 226.5b(d)(5)(iii), 

unless the disclosures provided with the application were in a form the consumer could 

keep and included a representative payment example for the category of payment option 

chosen by the consumer.

(4) Security interests. The fact that the creditor has or will acquire a security 

interest in the property purchased under the plan, or in other property identified by item 

or type.

(5) Statement of billing rights. A statement that outlines the consumer’s rights 

and the creditor’s responsibilities under §§ 226.12(c) and 226.13 and that is substantially 

similar to the statement found in Model Form G-3 or, at the creditor’s option G-3(A), in 

appendix G to this part. 
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(b) Rules affecting open-end (not home-secured) plans. The requirements of 

paragraph (b) of this section apply to plans other than home-equity plans subject to the 

requirements of § 226.5b.

(1) Form of disclosures; tabular format for open-end (not home-secured) plans. 

Creditors must provide the account-opening disclosures specified in paragraph (b)(2)(i) 

through (b)(2)(v) (except for (b)(2)(i)(D)(2)) and (b)(2)(vii) through (b)(2)(xiv) of this 

section in the form of a table with the headings, content, and format substantially similar 

to any of the applicable tables in G-17 in appendix G. 

(i) Highlighting. In the table, any annual percentage rate required to be disclosed 

pursuant to paragraph (b)(2)(i) of this section; any introductory rate permitted to be 

disclosed pursuant to paragraph (b)(2)(i)(B) or required to be disclosed under paragraph 

(b)(2)(i)(F) of this section, any rate that will apply after a premium initial rate expires 

permitted to be disclosed pursuant to paragraph (b)(2)(i)(C) or required to be disclosed 

pursuant to paragraph (b)(2)(i)(F), and any fee or percentage amounts required to be 

disclosed pursuant to paragraphs (b)(2)(ii), (b)(2)(iv), (b)(2)(vii) through (b)(2)(xii) of 

this section must be disclosed in bold text. However, bold text shall not be used for: Any 

maximum limits on fee amounts disclosed in the table that do not relate to fees that vary 

by state; the amount of any periodic fee disclosed pursuant to paragraph (b)(2) of this 

section that is not an annualized amount; and other annual percentage rates or fee 

amounts disclosed in the table.

(ii) Location. Only the information required or permitted by paragraphs (b)(2)(i) 

through (b)(2)(v) (except for (b)(2)(i)(D)(2)) and (b)(2)(vii) through (b)(2)(xiv) of this 

section shall be in the table. Disclosures required by paragraphs (b)(2)(i)(D)(2), 
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(b)(2)(vi) and (b)(2)(xv) of this section shall be placed directly below the table. 

Disclosures required by paragraphs (b)(3) through (b)(5) of this section that are not 

otherwise required to be in the table and other information may be presented with the 

account agreement or account-opening disclosure statement, provided such information 

appears outside the required table. 

(iii) Fees that vary by state. Creditors that impose fees referred to in paragraphs 

(b)(2)(vii) through (b)(2)(xi) of this section that vary by state and that provide the 

disclosures required by paragraph (b) of this section in person at the time the open-end 

(not home-secured) plan is established in connection with financing the purchase of 

goods or services may, at the creditor’s option, disclose in the account-opening table (A) 

the specific fee applicable to the consumer’s account, or (B) the range of the fees, if the 

disclosure includes a statement that the amount of the fee varies by state and refers the 

consumer to the account agreement or other disclosure provided with the accountopening table where the amount of the fee applicable to the consumer’s account is 

disclosed. A creditor may not list fees for multiple states in the account-opening 

summary table.

(iv) Fees based on a percentage. If the amount of any fee required to be disclosed 

under this section is determined on the basis of a percentage of another amount, the 

percentage used and the identification of the amount against which the percentage is 

applied may be disclosed instead of the amount of the fee. 

(2) Required disclosures for account-opening table for open-end (not homesecured) plans. A creditor shall disclose the items in this section, to the extent applicable:
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(i) Annual percentage rate. Each periodic rate that may be used to compute the 

finance charge on an outstanding balance for purchases, a cash advance, or a balance 

transfer, expressed as an annual percentage rate (as determined by § 226.14(b)). When 

more than one rate applies for a category of transactions, the range of balances to which 

each rate is applicable shall also be disclosed. The annual percentage rate for purchases 

disclosed pursuant to this paragraph shall be in at least 16-point type, except for the 

following: A penalty rate that may apply upon the occurrence of one or more specific 

events.

(A) Variable-rate information. If a rate disclosed under paragraph (b)(2)(i) of 

this section is a variable rate, the creditor shall also disclose the fact that the rate may 

vary and how the rate is determined. In describing how the applicable rate will be 

determined, the creditor must identify the type of index or formula that is used in setting 

the rate. The value of the index and the amount of the margin that are used to calculate 

the variable rate shall not be disclosed in the table. A disclosure of any applicable 

limitations on rate increases or decreases shall not be included in the table.

(B) Discounted initial rates. If the initial rate is an introductory rate, as that term 

is defined in § 226.16(g)(2)(ii), the creditor must disclose the rate that would otherwise 

apply to the account pursuant to paragraph (b)(2)(i) of this section. Where the rate is not 

tied to an index or formula, the creditor must disclose the rate that will apply after the 

introductory rate expires. In a variable-rate account, the card issuer must disclose a rate 

based on the applicable index or formula in accordance with the accuracy requirements of 

paragraph (b)(4)(ii)(G) of this section. Except as provided in paragraph (b)(2)(i)(F) of 

this section, the creditor is not required to, but may disclose in the table the introductory 
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45

rate along with the rate that would otherwise apply to the account if the creditor also 

discloses the time period during which the introductory rate will remain in effect, and 

uses the term “introductory” or “intro” in immediate proximity to the introductory rate. 

(C) Premium initial rate. If the initial rate is temporary and is higher than the 

rate that will apply after the temporary rate expires, the creditor must disclose the 

premium initial rate pursuant to paragraph (b)(2)(i) of this section. Except as provided in 

paragraph (b)(2)(i)(F) of this section, the creditor is not required to, but may disclose in 

the table the rate that will apply after the premium initial rate expires if the issuer also 

discloses the time period during which the premium initial rate will remain in effect. 

Consistent with paragraph (b)(2)(i) of this section, the premium initial rate for purchases 

must be in at least 16-point type. If the creditor also discloses in the table the rate that 

will apply after the premium initial rate for purchases expires, that rate also must be in at 

least 16-point type.

(D) Penalty rates. (1) In general. Except as provided in paragraph 

(b)(2)(i)(D)(2) of this section, if a rate may increase as a penalty for one or more events

specified in the account agreement, such as a late payment or an extension of credit that 

exceeds the credit limit, the creditor must disclose pursuant to paragraph (b)(2)(i) of this 

section the increased rate that may apply, a brief description of the event or events that 

may result in the increased rate, and a brief description of how long the increased rate 

will remain in effect. If more than one penalty rate may apply, the creditor at its option 

may disclose the highest rate that could apply, instead of disclosing the specific rates or 

the range of rates that could apply. 
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(2) Introductory rates. If the creditor discloses in the table an introductory rate,

as that term is defined in § 226.16(g)(2)(ii), creditors must briefly disclose directly 

beneath the table the circumstances under which the introductory rate may be revoked, 

and the rate that will apply after the introductory rate is revoked. 

(E) Point of sale where APRs vary by state. Creditors imposing annual 

percentage rates that vary by state and providing the disclosures required by paragraph 

(b) of this section in person at the time the open-end (not home-secured) plan is 

established in connection with financing the purchase of goods or services may, at the 

creditor’s option, disclose pursuant to paragraph (b)(2)(i) of this section in the accountopening table (1) the specific annual percentage rate applicable to the consumer’s 

account, or (2) the range of the annual percentage rates, if the disclosure includes a 

statement that the annual percentage rate varies by state and refers the consumer to the 

account agreement or other disclosure provided with the account-opening table where the 

annual percentage rate applicable to the consumer’s account is disclosed. A creditor may 

not list annual percentage rates for multiple states in the account-opening table.

(F) Creditors subject to 12 CFR § 227.24 or similar law. Notwithstanding 

paragraphs (b)(2)(i)(B) and (b)(2)(i)(C) of this section, issuers that are subject to 12 CFR

§ 227.24 or similar law must disclose in the table (1) any introductory rate that would 

apply to the account, consistent with the requirements of paragraph (b)(2)(i)(B) of this 

section, and (2) any rate that would apply upon the expiration of a premium initial rate, 

consistent with the requirements of paragraph (b)(2)(i)(C) of this section.

(ii) Fees for issuance or availability. (A) Any annual or other periodic fee that 

may be imposed for the issuance or availability of an open-end plan, including any fee 
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47

based on account activity or inactivity; how frequently it will be imposed; and the 

annualized amount of the fee.

(B) Any non-periodic fee that relates to opening the plan. A creditor must 

disclose that the fee is a one-time fee.

(iii) Fixed finance charge; minimum interest charge. Any fixed finance charge 

and a brief description of the charge. Any minimum interest charge if it exceeds $1.00 

that could be imposed during a billing cycle, and a brief description of the charge. The 

$1.00 threshold amount shall be adjusted periodically by the Board to reflect changes in 

the Consumer Price Index. The Board shall calculate each year a price level adjusted 

minimum interest charge using the Consumer Price Index in effect on the June 1 of that 

year. When the cumulative change in the adjusted minimum value derived from applying 

the annual Consumer Price level to the current minimum interest charge threshold has 

risen by a whole dollar, the minimum interest charge will be increased by $1.00. The 

creditor may, at its option, disclose in the table minimum interest charges below this

threshold.

(iv) Transaction charges. Any transaction charge imposed by the creditor for use 

of the open-end plan for purchases.

(v) Grace period. The date by which or the period within which any credit 

extended may be repaid without incurring a finance charge due to a periodic interest rate 

and any conditions on the availability of the grace period. If no grace period is provided, 

that fact must be disclosed. If the length of the grace period varies, the creditor may 

disclose the range of days, the minimum number of days, or the average number of the 

days in the grace period, if the disclosure is identified as a range, minimum, or average. 
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48

In disclosing in the tabular format a grace period that applies to all features on the 

account, the phrase “How to Avoid Paying Interest” shall be used as the heading for the 

row describing the grace period. If a grace period is not offered on all features of the 

account, in disclosing this fact in the tabular format, the phrase “Paying Interest” shall be 

used as the heading for the row describing this fact.

(vi) Balance computation method. The name of the balance computation method 

listed in § 226.5a(g) that is used to determine the balance on which the finance charge is 

computed for each feature, or an explanation of the method used if it is not listed, along 

with a statement that an explanation of the method(s) required by paragraph (b)(4)(i)(D) 

of this section is provided with the account-opening disclosures. In determining which 

balance computation method to disclose, the creditor shall assume that credit extended 

will not be repaid within any grace period, if any.

(vii) Cash advance fee. Any fee imposed for an extension of credit in the form of 

cash or its equivalent.

(viii) Late payment fee. Any fee imposed for a late payment.

(ix) Over-the-limit fee. Any fee imposed for exceeding a credit limit.

(x) Balance transfer fee. Any fee imposed to transfer an outstanding balance.

(xi) Returned-payment fee. Any fee imposed by the creditor for a returned 

payment.

(xii) Required insurance, debt cancellation or debt suspension coverage. (A) A 

fee for insurance described in § 226.4(b)(7) or debt cancellation or suspension coverage 

described in § 226.4(b)(10), if the insurance, or debt cancellation or suspension coverage 

is required as part of the plan; and 
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49

(B) A cross reference to any additional information provided about the insurance 

or coverage, as applicable.

(xiii) Available credit. If a creditor requires fees for the issuance or availability 

of credit described in paragraph (b)(2)(ii) of this section, or requires a security deposit for 

such credit, and the total amount of those required fees and/or security deposit that will

be imposed and charged to the account when the account is opened is 15 percent or more 

of the minimum credit limit for the plan, a creditor must disclose the available credit 

remaining after these fees or security deposit are debited to the account. The 

determination whether the 15 percent threshold is met must be based on the minimum 

credit limit for the plan. However, the disclosure provided under this paragraph must be 

based on the actual initial credit limit provided on the account. In determining whether 

the 15 percent threshold test is met, the creditor must only consider fees for issuance or 

availability of credit, or a security deposit, that are required. If fees for issuance or 

availability are optional, these fees should not be considered in determining whether the 

disclosure must be given. Nonetheless, if the 15 percent threshold test is met, the creditor 

in providing the disclosure must disclose the amount of available credit calculated by 

excluding those optional fees, and the available credit including those optional fees. The 

creditor shall also disclose that the consumer has the right to reject the plan and not be 

obligated to pay those fees or any other fee or charges until the consumer has used the 

account or made a payment on the account after receiving a periodic statement. This 

paragraph does not apply with respect to fees or security deposits that are not debited to 

the account.
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50

(xiv) Web site reference. For issuers of credit cards that are not charge cards, a 

reference to the Web site established by the Board and a statement that consumers may 

obtain on the Web site information about shopping for and using credit cards.

(xv) Billing error rights reference. A statement that information about 

consumers’ right to dispute transactions is included in the account-opening disclosures.

(3) Disclosure of charges imposed as part of open-end (not home-secured) plans. 

A creditor shall disclose, to the extent applicable:

(i) For charges imposed as part of an open-end (not home-secured) plan, the 

circumstances under which the charge may be imposed, including the amount of the 

charge or an explanation of how the charge is determined. For finance charges, a 

statement of when the charge begins to accrue and an explanation of whether or not any 

time period exists within which any credit that has been extended may be repaid without 

incurring the charge. If such a time period is provided, a creditor may, at its option and 

without disclosure, elect not to impose a finance charge when payment is received after 

the time period expires.

(ii) Charges imposed as part of the plan are:

(A) Finance charges identified under § 226.4(a) and § 226.4(b).

(B) Charges resulting from the consumer’s failure to use the plan as agreed,

except amounts payable for collection activity after default, attorney’s fees whether or 

not automatically imposed, and post-judgment interest rates permitted by law.

(C) Taxes imposed on the credit transaction by a state or other governmental 

body, such as documentary stamp taxes on cash advances.
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51

(D) Charges for which the payment, or nonpayment, affect the consumer’s access 

to the plan, the duration of the plan, the amount of credit extended, the period for which 

credit is extended, or the timing or method of billing or payment.

(E) Charges imposed for terminating a plan.

(F) Charges for voluntary credit insurance, debt cancellation or debt suspension. 

(iii) Charges that are not imposed as part of the plan include:

(A) Charges imposed on a cardholder by an institution other than the card issuer

for the use of the other institution’s ATM in a shared or interchange system.

(B) A charge for a package of services that includes an open-end credit feature, if 

the fee is required whether or not the open-end credit feature is included and the noncredit services are not merely incidental to the credit feature.

(C) Charges under § 226.4(e) disclosed as specified.

(4) Disclosure of rates for open-end (not home-secured) plans. A creditor shall 

disclose, to the extent applicable: 

(i) For each periodic rate that may be used to calculate interest:

(A) Rates. The rate, expressed as a periodic rate and a corresponding annual 

percentage rate.

(B) Range of balances. The range of balances to which the rate is applicable; 

however, a creditor is not required to adjust the range of balances disclosure to reflect the 

balance below which only a minimum charge applies.

(C) Type of transaction. The type of transaction to which the rate applies, if 

different rates apply to different types of transactions.
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52

(D) Balance computation method. An explanation of the method used to 

determine the balance to which the rate is applied. 

(ii) Variable-rate accounts. For interest rate changes that are tied to increases in 

an index or formula (variable-rate accounts) specifically set forth in the account 

agreement:

(A) The fact that the annual percentage rate may increase.

(B) How the rate is determined, including the margin.

(C) The circumstances under which the rate may increase.

(D) The frequency with which the rate may increase.

(E) Any limitation on the amount the rate may change.

(F) The effect(s) of an increase.

(G) A rate is accurate if it is a rate as of a specified date within the last 30 days 

before the disclosures are provided.

(iii) Rate changes not due to index or formula. For interest rate changes that are 

specifically set forth in the account agreement and not tied to increases in an index or 

formula:

(A) The initial rate (expressed as a periodic rate and a corresponding annual 

percentage rate) required under paragraph (b)(4)(i)(A) of this section.

(B) How long the initial rate will remain in effect and the specific events that 

cause the initial rate to change.

(C) The rate (expressed as a periodic rate and a corresponding annual percentage 

rate) that will apply when the initial rate is no longer in effect and any limitation on the 

time period the new rate will remain in effect.
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53

(D) The balances to which the new rate will apply.

(E) The balances to which the current rate at the time of the change will apply.

(5) Additional disclosures for open-end (not home-secured) plans. A creditor 

shall disclose, to the extent applicable: 

(i) Voluntary credit insurance, debt cancellation or debt suspension. The 

disclosures in §§ 226.4(d)(1)(i) and (d)(1)(ii) and (d)(3)(i) through (d)(3)(iii) if the 

creditor offers optional credit insurance or debt cancellation or debt suspension coverage 

that is identified in § 226.4(b)(7) or (b)(10). 

(ii) Security interests. The fact that the creditor has or will acquire a security 

interest in the property purchased under the plan, or in other property identified by item 

or type.

(iii) Statement of billing rights. A statement that outlines the consumer’s rights 

and the creditor’s responsibilities under §§ 226.12(c) and 226.13 and that is substantially 

similar to the statement found in Model Form G-3(A) in appendix G to this part.

9. Section 226.7 is amended by republishing the introductory text, revising 

paragraphs (a) and (b), removing paragraphs (c), (d), (e), (f), (g), (h), (i), (j), and (k), and 

removing and reserving footnotes 14 and 15 to read as follows:

§ 226.7 Periodic statement.

The creditor shall furnish the consumer with a periodic statement that discloses 

the following items, to the extent applicable:

(a) Rules affecting home-equity plans. The requirements of paragraph (a) of this 

section apply only to home-equity plans subject to the requirements of § 226.5b. 

Alternatively, a creditor subject to this paragraph may, at its option, comply with any of 
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54

the requirements of paragraph (b) of this section; however, any creditor that chooses not 

to provide a disclosure under paragraph (a)(7) of this section must comply with paragraph 

(b)(6) of this section.

(1) Previous balance. The account balance outstanding at the beginning of the 

billing cycle.

(2) Identification of transactions. An identification of each credit transaction in 

accordance with § 226.8. 

(3) Credits. Any credit to the account during the billing cycle, including the 

amount and the date of crediting. The date need not be provided if a delay in accounting 

does not result in any finance or other charge.

(4) Periodic rates. (i) Except as provided in paragraph (a)(4)(ii) of this section, 

each periodic rate that may be used to compute the finance charge, the range of balances 

to which it is applicable,14 and the corresponding annual percentage rate.15

 14 [Reserved] 

15 [Reserved.] 

 If no finance 

charge is imposed when the outstanding balance is less than a certain amount, the creditor 

is not required to disclose that fact, or the balance below which no finance charge will be 

imposed. If different periodic rates apply to different types of transactions, the types of 

transactions to which the periodic rates apply shall also be disclosed. For variable-rate 

plans, the fact that the periodic rate(s) may vary.

(ii) Exception. An annual percentage rate that differs from the rate that would 

otherwise apply and is offered only for a promotional period need not be disclosed except 

in periods in which the offered rate is actually applied.
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(5) Balance on which finance charge computed. The amount of the balance to 

which a periodic rate was applied and an explanation of how that balance was 

determined. When a balance is determined without first deducting all credits and 

payments made during the billing cycle, the fact and the amount of the credits and 

payments shall be disclosed. 

(6) Amount of finance charge and other charges. Creditors may comply with 

paragraphs (a)(6) of this section, or with paragraph (b)(6) of this section, at their option.

(i) Finance charges. The amount of any finance charge debited or added to the 

account during the billing cycle, using the term finance charge. The components of the 

finance charge shall be individually itemized and identified to show the amount(s) due to 

the application of any periodic rates and the amounts(s) of any other type of finance 

charge. If there is more than one periodic rate, the amount of the finance charge 

attributable to each rate need not be separately itemized and identified.

(ii) Other charges. The amounts, itemized and identified by type, of any charges 

other than finance charges debited to the account during the billing cycle.

(7) Annual percentage rate. At a creditor’s option, when a finance charge is 

imposed during the billing cycle, the annual percentage rate(s) determined under 

§ 226.14(c) using the term annual percentage rate.

(8) Grace period. The date by which or the time period within which the new 

balance or any portion of the new balance must be paid to avoid additional finance 

charges. If such a time period is provided, a creditor may, at its option and without 

disclosure, impose no finance charge if payment is received after the time period’s 

expiration.
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(9) Address for notice of billing errors. The address to be used for notice of 

billing errors. Alternatively, the address may be provided on the billing rights statement 

permitted by § 226.9(a)(2). 

(10) Closing date of billing cycle; new balance. The closing date of the billing 

cycle and the account balance outstanding on that date. 

(b) Rules affecting open-end (not home-secured) plans. The requirements of 

paragraph (b) of this section apply only to plans other than home-equity plans subject to 

the requirements of § 226.5b.

(1) Previous balance. The account balance outstanding at the beginning of the 

billing cycle.

(2) Identification of transactions. An identification of each credit transaction in 

accordance with § 226.8.

(3) Credits. Any credit to the account during the billing cycle, including the 

amount and the date of crediting. The date need not be provided if a delay in crediting 

does not result in any finance or other charge. 

(4) Periodic rates. (i) Except as provided in paragraph (b)(4)(ii) of this section, 

each periodic rate that may be used to compute the interest charge expressed as an annual 

percentage rate and using the term, Annual Percentage Rate, along with the range of 

balances to which it is applicable. If no interest charge is imposed when the outstanding 

balance is less than a certain amount, the creditor is not required to disclose that fact, or 

the balance below which no interest charge will be imposed. The types of transactions to 

which the periodic rates apply shall also be disclosed. For variable-rate plans, the fact 

that the annual percentage rate may vary.
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(ii) Exception. A promotional rate, as that term is defined in § 226.16(g)(2)(i) is 

required to be disclosed only in periods in which the offered rate is actually applied.

(5) Balance on which finance charge computed. The amount of the balance to 

which a periodic rate was applied and an explanation of how that balance was 

determined, using the term Balance Subject to Interest Rate. When a balance is 

determined without first deducting all credits and payments made during the billing 

cycle, the fact and the amount of the credits and payments shall be disclosed. As an 

alternative to providing an explanation of how the balance was determined, a creditor that 

uses a balance computation method identified in § 226.5a(g) may, at the creditor’s option, 

identify the name of the balance computation method and provide a toll-free telephone 

number where consumers may obtain from the creditor more information about the 

balance computation method and how resulting interest charges were determined. If the 

method used is not identified in § 226.5a(g), the creditor shall provide a brief explanation 

of the method used.

(6) Charges imposed. (i) The amounts of any charges imposed as part of a plan 

as stated in § 226.6(b)(3), grouped together, in proximity to transactions identified under 

paragraph (b)(2) of this section, substantially similar to Sample G-18(A) in appendix G to 

this part.

(ii) Interest. Finance charges attributable to periodic interest rates, using the term

Interest Charge, must be grouped together under the heading Interest Charged, itemized 

and totaled by type of transaction, and a total of finance charges attributable to periodic 

interest rates, using the term Total Interest, must be disclosed for the statement period and 
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58

calendar year to date, using a format substantially similar to Sample G-18(A) in appendix 

G to this part.

(iii) Fees. Charges imposed as part of the plan other than charges attributable to

periodic interest rates must be grouped together under the heading Fees, identified 

consistent with the feature or type, and itemized, and a total of charges, using the term 

Fees, must be disclosed for the statement period and calendar year to date, using a format 

substantially similar to Sample G-18(A) in appendix G.

(7) Change-in-terms and increased penalty rate summary for open-end (not 

home-secured) plans. Creditors that provide a change-in-terms notice required by 

§ 226.9(c), or a rate increase notice required by § 226.9(g), on or with the periodic 

statement, must disclose the information in § 226.9(c)(2)(iii)(A) or § 226.9(g)(3)(i) on the 

periodic statement in accordance with the format requirements in § 226.9(c)(2)(iii)(B), 

and § 226.9(g)(3)(ii). See Forms G-18(F) and G-18(G) in appendix G to this part.

(8) Grace period. The date by which or the time period within which the new 

balance or any portion of the new balance must be paid to avoid additional finance 

charges. If such a time period is provided, a creditor may, at its option and without 

disclosure, impose no finance charge if payment is received after the time period’s 

expiration.

(9) Address for notice of billing errors. The address to be used for notice of 

billing errors. Alternatively, the address may be provided on the billing rights statement 

permitted by § 226.9(a)(2).
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(10) Closing date of billing cycle; new balance. The closing date of the billing 

cycle and the account balance outstanding on that date. The new balance must be 

disclosed in accordance with the format requirements of paragraph (b)(13) of this section.

(11) Due date; late payment costs. (i) Except as provided in paragraph 

(b)(11)(ii) of this section and in accordance with the format requirements in paragraph 

(b)(13) of this section:

(A) The due date for a payment, if a late-payment fee or penalty rate may be 

imposed. 

(B) The amount of the late-payment fee and any increased periodic rate(s) 

(expressed as an annual percentage rate(s)) that may be imposed on the account as a 

result of a late payment. If a range of late-payment fees may be assessed, the creditor 

may state the range of fees, or the highest fee and at the creditor’s option with the highest 

fee an indication that the fee imposed could be lower. If the rate may be increased for 

more than one feature or balance, the creditor may state the range of rates or the highest 

rate that could apply and at the creditor’s option an indication that the rate imposed could 

be lower.

(ii) Exception. The requirements of paragraph (b)(11) of this section do not 

apply to periodic statements provided solely for charge card accounts.

(12) Minimum payment. (i) General disclosure requirements. Except as 

provided in paragraph (b)(12)(v) of this section, a card issuer, at its option, shall comply 

with any of paragraphs (b)(12)(ii), (b)(12)(iii) or (b)(12)(iv) of this section.

(ii) Generic repayment example and establishment of a toll-free telephone 

number. A card issuer that chooses this option to comply with the requirements of 
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paragraph (b)(12) of this section must comply with paragraph (b)(12)(ii)(A) or 

(b)(12)(ii)(B) as applicable.

(A) Credit card issuers not regulated by the FTC. This paragraph applies to card 

issuers that are not subject to the Federal Trade Commission’s authority to enforce the act 

and this regulation as to the card issuer.

(1) General rule. Except as provided in paragraph (b)(12)(ii)(A)(2) or 

(b)(12)(ii)(A)(3) of this section, the card issuer must provide the following statement with 

a bold heading on each periodic statement, in accordance with the format requirements of 

paragraph (b)(13) of this section: “Minimum Payment Warning: If you make only the 

minimum payment each period, you will pay more in interest and it will take you longer 

to pay off your balance. For example, if you had a balance of $1,000 at an interest rate of 

17% and always paid only the minimum required, it would take over 7 years to repay this 

balance. For an estimate of the time it would take to repay your actual balance making 

only minimum payments, call: [toll-free telephone number].” The card issuer may, at its 

option, substitute an example that uses an annual percentage rate that is greater than 17 

percent. The issuer must establish and maintain a toll-free telephone number for the 

purpose of providing its customers with generic repayment estimates, as described in 

appendix M1 to this part, and disclose this toll-free telephone number as part of the 

statement above. In responding to a request for a generic repayment estimate, as 

described in appendix M1 to this part, through the toll-free telephone number, the card 

issuer may not provide any repayment information other than the repayment information 

required or permitted by appendix M1 to this part. 
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(2) Alternative disclosure where minimum payment exceeds 4%. If the required 

minimum periodic payment exceeds 4% of the balance upon which finance charges 

accrue, the card issuer may comply with this paragraph in lieu of paragraph 

(b)(12)(ii)(A)(1) of this section. Such card issuer may provide the following statement 

with a bold heading on each periodic statement, in accordance with the format 

requirements of paragraph (b)(13) of this section: “Minimum Payment Warning: If 

you make only the minimum payment each period, you will pay more in interest and it 

will take you longer to pay off your balance. For example, if you had a balance of $300 

at an interest rate of 17% and always paid only the minimum required, it would take 

about 2 years to repay this balance. For an estimate of the time it would take to repay 

your actual balance making only minimum payments, call: [toll-free telephone number].” 

The card issuer may, at its option, substitute an example that uses an annual percentage 

rate that is greater than 17 percent. The card issuer must establish and maintain a tollfree telephone number for the purpose of providing its customers with generic repayment 

estimates, as described in appendix M1 to this part, and disclose this toll-free telephone 

number as part of the statement above. In responding to a request for a generic 

repayment estimate, as described in appendix M1 to this part, through the toll-free 

telephone number, the card issuer may not provide any repayment information other than 

the repayment information required or permitted by appendix M1 to this part.

(3) Small depository institution issuers. After June 30, 2012 a small depository 

institution issuer is required to establish and maintain a toll-free telephone number for the 

purpose of providing its customers with generic repayment estimates, as described in 

appendix M1 to this part. Before June 30, 2012, small depository institution issuers, 
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when making a disclosure under paragraph (b)(12)(ii)(A)(1) or (2) of this section, may 

provide the toll-free telephone numbers and the Web site operated by or on behalf of the 

Federal Reserve Board. A small depository institution issuer must use the following 

language to disclose the Federal Reserve Board’s toll-free telephone numbers: “For an 

estimate of the time it would take to repay your actual balance making only minimum 

payments, call the Federal Reserve Board at this toll-free telephone number: 1-888-445-

4801 or visit the Board’s Web site at http://www.federalreserve.gov/creditcardcalculator. 

(TTY toll-free telephone number: 1-888-319-4802.)” Small depository institution 

issuers are card issuers that are depository institutions (as defined by section 3 of the 

Federal Deposit Insurance Act), including federal credit unions or state chartered credit 

unions (as defined in section 101 of the Federal Credit Union Act), with total assets not 

exceeding $250 million, as of December 31, 2009.

(B) FTC-regulated credit card issuers. This paragraph applies to card issuers that 

are subject to the Federal Trade Commission’s authority under the Truth in Lending Act 

to enforce the act and this regulation as to a card issuer. The card issuer must disclose the 

following statement with a bold heading on each periodic statement, in accordance with 

the format requirements of paragraph (b)(13) of this section: “Minimum Payment

Warning: If you make only the minimum payment each period, you will pay more in 

interest and it will take you longer to pay off your balance. For example, if you had a 

balance of $300 at an interest rate of 17% and always paid only the minimum required, it 

would take about 2 years to repay this balance. For an estimate of the time it would take 

to repay your actual balance making only minimum payments, call the Federal Trade 

Commission at this toll-free telephone number: [toll-free telephone number established 
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by the FTC] or visit the FTC’s Web site at [Web site established by the FTC]. (TTY 

toll-free telephone number: [TTY toll-free telephone number established by the FTC].)” 

The card issuer may, at its option, substitute an example that uses an annual percentage 

rate that is greater than 17 percent. The card issuer must disclose the toll-free telephone 

numbers and Web site established by or on behalf of the Federal Trade Commission.

(iii) Actual repayment disclosure through a toll-free telephone number. A card 

issuer that chooses this option for complying with the requirements of paragraph (b)(12) 

of this section must disclose the following statement with a bold heading on each periodic 

statement in accordance with the format requirements of paragraph (b)(13) of this 

section: “Minimum Payment Warning: If you make only the minimum payment each 

period, you will pay more in interest and it will take you longer to pay off your balance. 

For an estimate of how long it will take you to repay your balance making only minimum 

payments, call this toll-free telephone number:--------.” The card issuer must establish 

and maintain a toll-free telephone number for the purpose of providing its customers with 

actual repayment disclosures, as described in appendix M2 to this part, and disclose this 

toll-free telephone number as part of the statement above. In responding to a request for 

an actual repayment disclosure, as described in appendix M2 to this part, through the tollfree telephone number, the card issuer may not provide any repayment information other 

than the repayment information required or permitted by appendix M2 to this part.

(iv) Actual repayment disclosure on the periodic statement. A card issuer that 

chooses this option for complying with the requirements of paragraph (b)(12) of this 

section must provide on each periodic statement, in accordance with the format 

requirements of paragraph (b)(13) of this section, a disclosure of the actual repayment 
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information as described in appendix M2 to this part, in a form substantially similar to 

Sample G-18(C) in appendix G to this part.

(v) Exemptions. Paragraph (b)(12) of this section does not apply to:

(A) Home-equity plans subject to the requirements of § 226.5b;

(B) Overdraft lines of credit tied to asset accounts accessed by check-guarantee 

cards or by debit cards;

(C) Lines of credit accessed by check-guarantee cards or by debit cards that can 

be used only at automated teller machines;

(D) Charge card accounts that require payment of outstanding balances in full at 

the end of each billing cycle;

(E) Credit card accounts where a fixed repayment period for the account is 

disclosed in the account agreement and the required minimum payments will amortize the 

outstanding balance within the fixed repayment period;

(F) A billing cycle where the entire outstanding balance is subject to a fixed 

repayment period specified in the account agreement and the required minimum 

payments applicable to that balance will amortize the outstanding balance within the 

fixed repayment period; 

(G) A billing cycle immediately following two consecutive billing cycles in 

which the consumer paid the entire balance in full, had a zero outstanding balance or had 

a credit balance; and

(H) A billing cycle where paying the minimum payment due for that billing cycle 

will pay the entire outstanding balance on the account for that billing cycle.
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(13) Format requirements. The due date required by paragraph (b)(11) of this 

section shall be disclosed on the front of the first page of the periodic statement. The 

amount of the late-payment fee and the annual percentage rate(s) required by paragraph 

(b)(11) of this section shall be stated in close proximity to the due date. The ending 

balance required by paragraph (b)(10) of this section and the minimum payment 

disclosure required by paragraph (b)(12) of this section shall be disclosed closely 

proximate to the minimum payment due. The due date, late-payment fee and annual 

percentage rate, ending balance, minimum payment due, and minimum payment 

disclosure shall be grouped together. Samples G-18(D) or G-18(E) in appendix G to this 

part set forth examples of how these terms may be grouped.

10. Section 226.8 is amended by revising the heading, revising paragraphs (a) 

and (b), adding a new paragraph (c), and removing and reserving footnotes 16 through 20 

to read as follows:

§ 226.8 Identifying transactions on periodic statements.

The creditor shall identify credit transactions on or with the first periodic 

statement that reflects the transaction by furnishing the following information, as 

applicable.16

(i) A brief identification

(a) Sale credit. (1) Except as provided in paragraph (a)(2) of this section, for 

each credit transaction involving the sale of property or services, the creditor must 

disclose the amount and date of the transaction, and either: 

17 of the property or services purchased, for creditors and 

sellers that are the same or related;18

 16 [Reserved] 

or
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(ii) The seller’s name; and the city and state or foreign country where the 

transaction took place.19

(b) Nonsale credit. For each credit transaction not involving the sale of property 

or services, the creditor must disclose a brief identification of the transaction;

The creditor may omit the address or provide any suitable 

designation that helps the consumer to identify the transaction when the transaction took 

place at a location that is not fixed; took place in the consumer’s home; or was a mail, 

Internet, or telephone order. 

(2) Creditors need not comply with paragraph (a)(1) of this section if an actual 

copy of the receipt or other credit document is provided with the first periodic statement 

reflecting the transaction, and the amount of the transaction and either the date of the 

transaction to the consumer’s account or the date of debiting the transaction are disclosed 

on the copy or on the periodic statement.

20

(c) Alternative creditor procedures; consumer inquiries for clarification or 

documentation. The following procedures apply to creditors that treat an inquiry for 

the 

amount of the transaction; and at least one of the following dates: The date of the 

transaction, the date the transaction was debited to the consumer’s account, or, if the 

consumer signed the credit document, the date appearing on the document. If an actual 

copy of the receipt or other credit document is provided and that copy shows the amount 

and at least one of the specified dates, the brief identification may be omitted.

 17 [Reserved]

18 [Reserved]

19 [Reserved]

20 [Reserved]
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clarification or documentation as a notice of a billing error, including correcting the 

account in accordance with § 226.13(e):

(1) Failure to disclose the information required by paragraphs (a) and (b) of this 

section is not a failure to comply with the regulation, provided that the creditor also 

maintains procedures reasonably designed to obtain and provide the information. This 

applies to transactions that take place outside a state, as defined in § 226.2(a)(26), 

whether or not the creditor maintains procedures reasonably adapted to obtain the 

required information. 

(2) As an alternative to the brief identification for sale or nonsale credit, the 

creditor may disclose a number or symbol that also appears on the receipt or other credit 

document given to the consumer, if the number or symbol reasonably identifies that 

transaction with that creditor.

11. Section 226.9 is amended by revising paragraphs (a), (b), (c), and (e), 

republishing paragraphs (d) and (f), adding new paragraph (g), and removing and 

reserving footnote 20a to read as follows:

§ 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 § 226.6(a)(5) and (b)(5)(iii)

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 § 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 
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substantially similar to Model Form G-4 or Model Form G-4(A) in appendix G to this 

part, as applicable. Creditors offering home-equity plans subject to the requirements of 

§ 226.5b may use either Model Form, at their option. 

(b) Disclosures for supplemental credit access devices and additional features. 

(1) If a creditor, within 30 days after mailing or delivering the account-opening 

disclosures under § 226.6(a)(1) or (b)(3)(ii)(A), as applicable, adds a credit feature to the 

consumer’s account or mails or delivers to the consumer a credit access device, including 

but not limited to checks that access a credit card account, for which the finance charge 

terms are the same as those previously disclosed, no additional disclosures are necessary. 

Except as provided in paragraph (b)(3) of this section, after 30 days, if the creditor adds a 

credit feature or furnishes a credit access 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) Except as provided in paragraph (b)(3) of this section, whenever a credit 

feature is added or a credit access device is mailed or delivered, and the finance charge 

terms for the feature or device differ from disclosures previously given, the disclosures 

required by § 226.6(a)(1) or (b)(3)(ii)(A), as applicable, that are applicable to the added 

feature or device shall be given before the consumer uses the feature or device for the 

first time.

(3) Checks that access a credit card account. 

(i) Disclosures. For open-end plans not subject to the requirements of § 226.5b, 

if checks that can be used to access a credit card account are provided more than 30 days 
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after account-opening disclosures under § 226.6(b) are mailed or delivered, or are 

provided within 30 days of the account-opening disclosures and the finance charge terms 

for the checks differ from the finance charge terms previously disclosed, the creditor shall 

disclose on the front of the page containing the checks the following terms in the form of 

a table with the headings, content, and form substantially similar to Sample G-19 in 

appendix G to this part:

(A) If a promotional rate, as that term is defined in § 226.16(g)(2)(i) applies to 

the checks:

(1) The promotional rate and the time period during which the promotional rate 

will remain in effect;

(2) The type of rate that will apply (such as whether the purchase or cash advance 

rate applies) after the promotional rate expires, and the annual percentage rate that will 

apply after the promotional rate expires. For a variable-rate account, a creditor must 

disclose an annual percentage rate based on the applicable index or formula in 

accordance with the accuracy requirements set forth in paragraph (b)(3)(ii) of this 

section; and

(3) The date, if any, by which the consumer must use the checks in order to 

qualify for the promotional rate. If the creditor will honor checks used after such date but 

will apply an annual percentage rate other than the promotional rate, the creditor must 

disclose this fact and the type of annual percentage rate that will apply if the consumer 

uses the checks after such date.

(B) If no promotional rate applies to the checks:
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(1) The type of rate that will apply to the checks and the applicable annual 

percentage rate. For a variable-rate account, a creditor must disclose an annual 

percentage rate based on the applicable index or formula in accordance with the accuracy 

requirements set forth in paragraph (b)(3)(ii) of this section. 

(C) Any transaction fees applicable to the checks disclosed under 

§ 226.6(b)(2)(iv); and

(D) Whether or not a grace period is given within which any credit extended by 

use of the checks may be repaid without incurring a finance charge due to a periodic 

interest rate. When disclosing whether there is a grace period, the phrase “How to Avoid 

Paying Interest on Check Transactions” shall be used as the row heading when a grace 

period applies to credit extended by the use of the checks. When disclosing the fact that 

no grace period exists for credit extended by use of the checks, the phrase “Paying 

Interest” shall be used as the row heading.

(ii) Accuracy. The disclosures in paragraph (b)(3)(i) of this section must be 

accurate as of the time the disclosures are mailed or delivered. A variable annual 

percentage rate is accurate if it was in effect within 60 days of when the disclosures are 

mailed or delivered.

(c) Change in terms. (1) Rules affecting home-equity plans. (i) Written notice 

required. For home-equity plans subject to the requirements of § 226.5b, whenever any 

term required to be disclosed under §226.6(a) 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 
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does not apply if the change has been agreed to by the consumer; the notice shall be 

given, however, before the effective date of the change.

(ii) Notice not required. For home-equity plans subject to the requirements of 

§ 226.5b, a creditor is not required to provide notice under this section when the change 

involves a reduction of any component of a finance or other charge or when the change 

results from an agreement involving a court proceeding.

(iii) Notice to restrict credit. For home-equity plans subject to the requirements 

of § 226.5b, if the creditor prohibits additional extensions of credit or reduces the credit 

limit pursuant to § 226.5b(f)(3)(i) or (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.

(2) Rules affecting open-end (not home-secured) plans. (i) Changes where 

written advance notice is required. For plans other than home-equity plans subject to the 

requirements of § 226.5b, except as provided in paragraphs (c)(2)(ii) and (c)(2)(iv) of this 

section, when a term required to be disclosed under § 226.6(b)(3), (b)(4) or (b)(5) is 

changed or the required minimum periodic payment is increased, a creditor must provide 

a written notice of the change at least 45 days prior to the effective date of the change to 

each consumer who may be affected. The 45-day timing requirement does not apply if 

the consumer has agreed to a particular change; the notice shall be given, however, before 

the effective date of the change. Increases in the rate applicable to a consumer’s account 

due to delinquency, default or as a penalty described in paragraph (g) of this section that 
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are not due to a change in the contractual terms of the consumer’s account must be 

disclosed pursuant to paragraph (g) of this section instead of paragraph (c)(2) of this 

section.

(ii) Charges not covered by § 226.6(b)(1) and (b)(2). Except as provided in 

paragraph (c)(2)(iv) of this section, if a creditor increases any component of a charge, or 

introduces a new charge, required to be disclosed under § 226.6(b)(3) that is not required 

to be disclosed under § 226.6(b)(1) and (b)(2), a creditor may either, at its option:

(A) Comply with the requirements of paragraph (c)(2)(i) of this section; or 

(B) Provide notice of the amount of the charge before the consumer agrees to or 

becomes obligated to pay the charge, at a time and in a manner that a consumer would be 

likely to notice the disclosure of the charge. The notice may be provided orally or in 

writing.

(iii) Disclosure requirements. (A) Changes to terms described in accountopening table. If a creditor changes a term required to be disclosed pursuant to 

§ 226.6(b)(1) and (b)(2), the creditor must provide the following information on the 

notice provided pursuant to paragraph (c)(2)(i) of this section:

(1) A summary of the changes made to terms required by § 226.6(b)(1) and 

(b)(2);

(2) A statement that changes are being made to the account;

(3) A statement indicating the consumer has the right to opt out of these changes, 

if applicable, and a reference to additional information describing the opt-out right 

provided in the notice, if applicable;

(4) The date the changes will become effective; 
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(5) If applicable, a statement that the consumer may find additional information 

about the summarized changes, and other changes to the account, in the notice;

(6) If the creditor is changing a rate on the account, other than a penalty rate, a 

statement that if a penalty rate currently applies to the consumer’s account, the new rate 

described in the notice will not apply to the consumer’s account until the consumer’s 

account balances are no longer subject to the penalty rate; and

(7) If the change in terms being disclosed is an increase in an annual percentage 

rate, the balances to which the increased rate will be applied. If applicable, a statement 

identifying the balances to which the current rate will continue to apply as of the effective 

date of the change in terms.

(B) Format requirements. (1) Tabular format. The summary of changes 

described in paragraph (c)(2)(iii)(A)(1) of this section must be in a tabular format, with 

headings and format substantially similar to any of the account-opening tables found in 

G-17 in appendix G to this part. The table must disclose the changed term and 

information relevant to the change, if that relevant information is required by 

§ 226.6(b)(1) and (b)(2). The new terms shall be described in the same level of detail as 

required when disclosing the terms under § 226.6(b)(2).

(2) Notice included with periodic statement. If a notice required by paragraph 

(c)(2)(i) of this section is included on or with a periodic statement, the information 

described in paragraph (c)(2)(iii)(A)(1) of this section must be disclosed on the front of 

any page of the statement. The summary of changes described in paragraph 

(c)(1)(iii)(A)(1) of this section must immediately follow the information described in 
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paragraph (c)(2)(iii)(A)(2) through (c)(2)(iii)(A)(7) of this section, and be substantially 

similar to the format shown in Sample G-20 in appendix G to this part. 

(3) Notice provided separately from periodic statement. If a notice required by 

paragraph (c)(2)(i) of this section is not included on or with a periodic statement, the 

information described in paragraph (c)(2)(iii)(A)(1) of this section must, at the creditor’s 

option, be disclosed on the front of the first page of the notice or segregated on a separate 

page from other information given with the notice. The summary of changes required to 

be in a table pursuant to paragraph (c)(2)(iii)(A)(1) of this section may be on more than 

one page, and may use both the front and reverse sides, so long as the table begins on the 

front of the first page of the notice and there is a reference on the first page indicating that 

the table continues on the following page. The summary of changes described in 

paragraph (c)(2)(iii)(A)(1) of this section must immediately follow the information 

described in paragraph (c)(1)(iii)(A)(2) through (c)(1)(iii)(A)(7) of this section, 

substantially similar to the format shown in Sample G-20 in appendix G to this part.

(iv) Notice not required. For open-end plans (other than home equity plans 

subject to the requirements of § 226.5b) a creditor is not required to provide notice under 

this section when the change involves charges for documentary evidence; a reduction of 

any component of a finance or other charge; suspension of future credit privileges (except 

as provided in paragraph (c)(2)(v) of this section) or termination of an account or plan; or 

when the change results from an agreement involving a court proceeding. 

(v) Reduction of the credit limit. For open-end plans that are not subject to the 

requirements of § 226.5b, if a creditor decreases the credit limit on an account, advance 

notice of the decrease must be provided before an over-the-limit fee or a penalty rate can 
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be imposed solely as a result of the consumer exceeding the newly decreased credit limit. 

Notice shall be provided in writing or orally at least 45 days prior to imposing the overthe-limit fee or penalty rate and shall state that the credit limit on the account has been or 

will be decreased.

(d) Finance charge imposed at time of transaction. (1) Any person, other than 

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, 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 the purposes of §§ 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 § 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 § 226.5a(b)(1) through (b)(7) that would apply if 

the account were renewed;20a

 20a [Reserved]

and

(ii) How and when the cardholder may terminate credit availability under the 

account to avoid paying the renewal fee.
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(2) Delayed notice. Alternatively, 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 provider. (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 

§ 226.5a, the card issuer shall mail or deliver to the cardholder written notice of the 

change not less than 30 days before the change in provider 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.
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(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, 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.
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(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.

(g) Increase in rates due to delinquency or default or as a penalty. (1) Increases 

subject to this section. For plans other than home-equity plans subject to the 

requirements of § 226.5b, except as provided in paragraph (g)(4) of this section, a 

creditor must provide a written notice to each consumer who may be affected when: 

(i) A rate is increased due to the consumer’s delinquency or default; or

(ii) A rate is increased as a penalty for one or more events specified in the 

account agreement, such as making a late payment or obtaining an extension of credit 

that exceeds the credit limit.

(2) Timing of written notice. Whenever any notice is required to be given 

pursuant to paragraph (g)(1) of this section, the creditor shall provide written notice of 

the increase in rates at least 45 days prior to the effective date of the increase. The notice 

must be provided after the occurrence of the events described in paragraphs (g)(1)(i) and 

(g)(1)(ii) of this section that trigger the imposition of the rate increase.

(3)(i) Disclosure requirements for rate increases. If a creditor is increasing the 

rate due to delinquency or default or as a penalty, the creditor must provide the following 

information on the notice sent pursuant to paragraph (g)(1) of this section:

(A) A statement that the delinquency or default rate or penalty rate, as applicable, 

has been triggered;

(B) The date on which the delinquency or default rate or penalty rate will apply;
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(C) The circumstances under which the delinquency or default rate or penalty 

rate, as applicable, will cease to apply to the consumer’s account, or that the delinquency 

or default rate or penalty rate will remain in effect for a potentially indefinite time period; 

(D) A statement indicating to which balances the delinquency or default rate or 

penalty rate will be applied; and

(E) If applicable, a description of any balances to which the current rate will 

continue to apply as of the effective date of the rate increase, unless a consumer fails to 

make a minimum periodic payment within 30 days from the due date for that payment.

(ii) Format requirements. (A) If a notice required by paragraph (g)(1) of this 

section is included on or with a periodic statement, the information described in 

paragraph (g)(3)(i) of this section must be in the form of a table and provided on the front 

of any page of the periodic statement, above the notice described in paragraph 

(c)(2)(iii)(A) of this section if that notice is provided on the same statement.

(B) If a notice required by paragraph (g)(1) of this section is not included on or 

with a periodic statement, the information described in paragraph (g)(3)(i) of this section

must be disclosed on the front of the first page of the notice. Only information related to 

the increase in the rate to a penalty rate may be included with the notice, except that this 

notice may be combined with a notice described in paragraph (c)(2)(iii)(A) or (g)(4)(ii) of 

this section.

(4) Exceptions. (i) Workout arrangements. A creditor is not required to provide 

a notice pursuant to paragraph (g)(1) of this section if a rate applicable to a category of 

transactions is increased as a result of the consumer’s default, delinquency or as a 
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penalty, in each case for failure to comply with the terms of a workout arrangement 

between the creditor and the consumer, provided that:

(A) The rate following any such increase does not exceed the rate that applied to 

the category of transactions prior to commencement of the workout arrangement; or 

(B) If the rate that applied to a category of transactions prior to the 

commencement of the workout arrangement was a variable rate, the rate following any 

such increase is a variable rate determined by the same formula (index and margin) that 

applied to the category of transactions prior to commencement of the workout 

arrangement.

(ii) Decrease in credit limit. A creditor is not required to provide, prior to 

increasing the rate for obtaining an extension of credit that exceeds the credit limit, a 

notice pursuant to paragraph (g)(1) of this section, provided that:

(A) The creditor provides at least 45 days in advance of imposing the penalty rate 

a notice, in writing, that includes: 

(1) A statement that the credit limit on the account has been or will be decreased.

(2) A statement indicating the date on which the penalty rate will apply, if the 

outstanding balance exceeds the credit limit as of that date;

(3) A statement that the penalty rate will not be imposed on the date specified in 

paragraph (g)(4)(ii)(A)(2) of this section, if the outstanding balance does not exceed the 

credit limit as of that date; 

(4) The circumstances under which the penalty rate, if applied, will cease to 

apply to the account, or that the penalty rate, if applied, will remain in effect for a 

potentially indefinite time period; 
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(5) A statement indicating to which balances the penalty rate may be applied; and

(6) If applicable, a description of any balances to which the current rate will 

continue to apply as of the effective date of the rate increase, unless the consumer fails to 

make a minimum periodic payment within 30 days from the due date for that payment;

and

(B) The creditor does not increase the rate applicable to the consumer’s account 

to the penalty rate if the outstanding balance does not exceed the credit limit on the date 

set forth in the notice and described in paragraph 9(g)(4)(ii)(A)(2) of this section.

(C) (1) If a notice provided pursuant to paragraph (g)(4)(ii)(A) of this section is 

included on or with a periodic statement, the information described in paragraph 

(g)(4)(ii)(A) of this section must be in the form of a table and provided on the front of

any page of the periodic statement; or

(2) If a notice required by paragraph (g)(4)(ii)(A) of this section is not included 

on or with a periodic statement, the information described in paragraph (g)(4)(ii)(A) of 

this section must be disclosed on the front of the first page of the notice. Only 

information related to the reduction in credit limit may be included with the notice, 

except that this notice may be combined with a notice described in paragraph 

(c)(2)(iii)(A) or (g)(1) of this section.

(iii) Certain rate increases applicable to outstanding balances. A creditor is not 

required to provide a notice pursuant to paragraph (g)(1) of this section prior to 

increasing the rate applicable to an outstanding balance as defined in 12 CFR 

§ 227.24(a)(2), if:
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(A) The creditor previously provided a notice pursuant to paragraph (g)(1) of this 

section containing the content specified in paragraph (g)(3) of this section;

(B) After that notice is provided but prior to the effective date of the rate increase 

or rate increases disclosed in the notice pursuant to paragraph (g)(3)(i)(B) of this section, 

the consumer fails to make a required minimum periodic payment within 30 days from 

the due date for that payment; and

(C) The rate increase applicable to outstanding balances takes effect on the 

effective date set forth in the notice.

12. Section 226.10 is amended by republishing paragraph (a) and (c), revising 

paragraph (b), and adding a new paragraph (d) to read as follows:

§ 226.10 Prompt crediting of payments.

(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.

(2) Examples of reasonable requirements for payments. Reasonable 

requirements for making payment may include:

(i) Requiring that payments be accompanied by the account number or payment 

stub;

(ii) Setting reasonable cut-off times for payments to be received by mail, by 

electronic means, by telephone, and in person. For example, it would be reasonable for a 
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creditor to set a cut-off time for payments by mail of 5 p.m. on the payment due date at 

the location specified by the creditor for the receipt of such payments;

(iii) Specifying that only checks or money orders should be sent by mail;

(iv) Specifying that payment is to be made in U.S. dollars; or

(v) Specifying one particular address for receiving payments, such as a post 

office box. 

(3) Nonconforming payments. If a creditor specifies, on or with the periodic 

statement, requirements for the consumer to follow in making payments, but accepts a 

payment that does not conform to the requirements, the creditor shall credit the payment 

within five days of receipt. 

(c) Adjustment of account. If a creditor fails to credit a payment, as required by 

paragraphs (a) or (b) of this section, in time to avoid the imposition of finance or other 

charges, the creditor shall adjust the consumer’s account so that the charges imposed are 

credited to the consumer’s account during the next billing cycle.

(d) Crediting of payments when creditor does not receive or accept payments on 

due date. If the due date for payments is a day on which the creditor does not receive or 

accept payments by mail, the creditor may not treat a payment received by mail the next 

business day as late for any purpose.

13. Section 226.11 is revised to read as follows:

§ 226.11 Treatment of credit balances; account termination.

(a) Credit balances. When a credit balance in excess of $1 is created on a credit 

account (through transmittal of funds to a creditor in excess of the total balance due on an 
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account, through rebates of unearned finance charges or insurance premiums, or through 

amounts otherwise owed to or held for the benefit of the consumer), the creditor shall—

(1) Credit the amount of the credit balance to the consumer’s account;

(2) Refund any part of the remaining credit balance within seven business days 

from receipt of a written request from the consumer;

(3) Make a good faith effort to refund to the consumer by cash, check, or money 

order, or credit to a deposit account of the consumer, any part of the credit balance 

remaining in the account for more than six months. No further action is required if the 

consumer’s current location is not known to the creditor and cannot be traced through the 

consumer’s last known address or telephone number.

(b) Account termination. (1) A creditor shall not terminate an account prior to 

its expiration date solely because the consumer does not incur a finance charge.

(2) Nothing in paragraph (b)(1) of this section prohibits a creditor from 

terminating an account that is inactive for three or more consecutive months. An account 

is inactive for purposes of this paragraph if no credit has been extended (such as by 

purchase, cash advance or balance transfer) and if the account has no outstanding 

balance.

14. Section 226.12 is amended by republishing paragraphs (a), (d), (e), (f), and 

(g), revising paragraphs (b) and (c), and removing and reserving footnotes 21 through 26 

to read as follows:

§ 226.12 Special credit card provisions.
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(a) Issuance of credit cards. Regardless of the purpose for which a credit card is

to be used, including business, commercial, or agricultural use, no credit card shall be

issued to any person except—

(1) In response to an oral or written request or application for the card; or

(2) As a renewal of, or substitute for, an accepted credit card.21

(ii) Limitation on amount. The liability of a cardholder for unauthorized use

(b) Liability of cardholder for unauthorized use. (1)(i) Definition of 

unauthorized use. For purposes of this section, the term “unauthorized use” means the

use of a credit card by a person, other than the cardholder, who does not have actual,

implied, or apparent authority for such use, and from which the cardholder receives no

benefit.

22

(ii) The card issuer has provided adequate notice

of 

a credit card shall not exceed the lesser of $50 or the amount of money, property, labor, 

or services obtained by the unauthorized use before notification to the card issuer under 

paragraph (b)(3) of this section.

(2) Conditions of liability. A cardholder shall be liable for unauthorized use of a

credit card only if:

(i) The credit card is an accepted credit card;

23

 21 [Reserved]

22 [Reserved]

23 [Reserved]

of the cardholder’s maximum

potential liability and of means by which the card issuer may be notified of loss or theft

of the card. The notice shall state that the cardholder’s liability shall not exceed $50 (or

any lesser amount) and that the cardholder may give oral or written notification, and shall
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describe a means of notification (for example, a telephone number, an address, or both);

and

(iii) The card issuer has provided a means to identify the cardholder on the

account or the authorized user of the card.

(3) Notification to card issuer. Notification to a card issuer is given when steps

have been taken as may be reasonably required in the ordinary course of business to

provide the card issuer with the pertinent information about the loss, theft, or possible

unauthorized use of a credit card, regardless of whether any particular officer, employee,

or agent of the card issuer does, in fact, receive the information. Notification may be

given, at the option of the person giving it, in person, by telephone, or in writing.

Notification in writing is considered given at the time of receipt or, whether or not

received, at the expiration of the time ordinarily required for transmission, whichever is

earlier.

(4) Effect of other applicable law or agreement. If state law or an agreement

between a cardholder and the card issuer imposes lesser liability than that provided in this

paragraph, the lesser liability shall govern.

(5) Business use of credit cards. If 10 or more credit cards are issued by one card

issuer for use by the employees of an organization, this section does not prohibit the card

issuer and the organization from agreeing to liability for unauthorized use without regard

to this section. However, liability for unauthorized use may be imposed on an employee

of the organization, by either the card issuer or the organization, only in accordance with

this section.
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(c) Right of cardholder to assert claims or defenses against card issuer.

24 (1) 

General rule. When a person who honors a credit card fails to resolve satisfactorily a

dispute as to property or services purchased with the credit card in a consumer credit 

transaction, the cardholder may assert against the card issuer all claims (other than tort

claims) and defenses arising out of the transaction and relating to the failure to resolve

the dispute. The cardholder may withhold payment up to the amount of credit

outstanding for the property or services that gave rise to the dispute and any finance or

other charges imposed on that amount.25

(B) The amount of credit extended to obtain the property or services that result in 

the assertion of the claim or defense by the cardholder exceeds $50, and the disputed 

transaction occurred in the same state as the cardholder’s current designated address or, if 

not within the same state, within 100 miles from that address.

(2) Adverse credit reports prohibited. If, in accordance with paragraph (c)(1) of

this section, the cardholder withholds payment of the amount of credit outstanding for the

disputed transaction, the card issuer shall not report that amount as delinquent until the

dispute is settled or judgment is rendered.

(3) Limitations. (i) General. The rights stated in paragraphs (c)(1) and (c)(2) of 

this section apply only if:

(A) The cardholder has made a good faith attempt to resolve the dispute with the 

person honoring the credit card; and

26

 24 [Reserved]

25 [Reserved] 26 [Reserved]
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(ii) Exclusion. The limitations stated in paragraph (c)(3)(i)(B) of this section

shall not apply when the person honoring the credit card:

(A) Is the same person as the card issuer;

(B) Is controlled by the card issuer directly or indirectly;

(C) Is under the direct or indirect control of a third person that also directly or

indirectly controls the card issuer;

(D) Controls the card issuer directly or indirectly;

(E) Is a franchised dealer in the card issuer’s products or services; or

(F) Has obtained the order for the disputed transaction through a mail solicitation

made or participated in by the card issuer.

(d) Offsets by card issuer prohibited. (1) A card issuer may not take any action, 

either before or after termination of credit card privileges, to offset a cardholder’s 

indebtedness arising from a consumer credit transaction under the relevant credit card 

plan against funds of the cardholder held on deposit with the card issuer.

(2) This paragraph does not alter or affect the right of a card issuer acting under 

state or federal law to do any of the following with regard to funds of a cardholder held 

on deposit with the card issuer if the same procedure is constitutionally available to 

creditors generally: obtain or enforce a consensual security interest in the funds; attach or 

otherwise levy upon the funds; or obtain or enforce a court order relating to the funds.

(3) This paragraph does not prohibit a plan, if authorized in writing by the

cardholder, under which the card issuer may periodically deduct all or part of the 

cardholder’s credit card debt from a deposit account held with the card issuer (subject to 

the limitations in § 226.13(d)(1)).
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(e) Prompt notification of returns and crediting of refunds. (1) When a creditor 

other than the card issuer accepts the return of property or forgives a debt for services that 

is to be reflected as a credit to the consumer’s credit card account, that creditor shall, 

within 7 business days from accepting the return or forgiving the debt, transmit a credit 

statement to the card issuer through the card issuer’s normal channels for credit 

statements.

(2) The card issuer shall, within 3 business days from receipt of a credit 

statement, credit the consumer’s account with the amount of the refund.

(3) If a creditor other than a card issuer routinely gives cash refunds to consumers 

paying in cash, the creditor shall also give credit or cash refunds to consumers using 

credit cards, unless it discloses at the time the transaction is consummated that credit or 

cash refunds for returns are not given. This section does not require refunds for returns 

nor does it prohibit refunds in kind.

(f) Discounts; tie-in arrangements. No card issuer may, by contract or otherwise:

(1) Prohibit any person who honors a credit card from offering a discount to a 

consumer to induce the consumer to pay by cash, check, or similar means rather than by 

use of a credit card or its underlying account for the purchase of property or services; or

(2) Require any person who honors the card issuer’s credit card to open or 

maintain any account or obtain any other service not essential to the operation of the 

credit card plan from the card issuer or any other person, as a condition of participation in 

a credit card plan. If maintenance of an account for clearing purposes is determined to be 

essential to the operation of the credit card plan, it may be required only if no service 

charges or minimum balance requirements are imposed.
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(g) Relation to Electronic Fund Transfer Act and Regulation E. For guidance on 

whether Regulation Z (12 CFR part 226) or Regulation E (12 CFR part 205) applies in 

instances involving both credit and electronic fund transfer aspects, refer to Regulation E, 

12 CFR § 205.12(a) regarding issuance and liability for unauthorized use. On matters 

other than issuance and liability, this section applies to the credit aspects of combined 

credit/electronic fund transfer transactions, as applicable.

15. Section 226.13 is amended by revising paragraphs (a), (b), (d), (g)(2) and 

(g)(3), republishing paragraphs (c), (e), (f), (g)(1), (g)(4), (h), and (i), and removing and 

reserving footnotes 27 through 31 to read as follows:

§ 226.13 Billing error resolution.27

 27 [Reserved]

(a) Definition of billing error. For purposes of this section, the term billing error 

means:

(1) A reflection on or with a periodic statement of an extension of credit that is

not made to the consumer or to a person who has actual, implied, or apparent authority to

use the consumer’s credit card or open-end credit plan.

(2) A reflection on or with a periodic statement of an extension of credit that is

not identified in accordance with the requirements of §§ 226.7(a)(2) or (b)(2), as

applicable, and 226.8.

(3) A reflection on or with a periodic statement of an extension of credit for

property or services not accepted by the consumer or the consumer’s designee, or not

delivered to the consumer or the consumer’s designee as agreed.
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(4) A reflection on a periodic statement of the creditor’s failure to credit properly

a payment or other credit issued to the consumer’s account.

(5) A reflection on a periodic statement of a computational or similar error of an

accounting nature that is made by the creditor.

(6) A reflection on a periodic statement of an extension of credit for which the

consumer requests additional clarification, including documentary evidence.

(7) The creditor’s failure to mail or deliver a periodic statement to the consumer’s

last known address if that address was received by the creditor, in writing, at least 20 

days before the end of the billing cycle for which the statement was required.

(b) Billing error notice.

28 A billing error notice is a written notice29

(1) The creditor shall mail or deliver written acknowledgment to the consumer 

within 30 days of receiving a billing error notice, unless the creditor has complied with 

from a

consumer that:

(1) Is received by a creditor at the address disclosed under § 226.7(a)(9) or

(b)(9), as applicable, no later than 60 days after the creditor transmitted the first periodic 

statement that reflects the alleged billing error;

(2) Enables the creditor to identify the consumer’s name and account number;

and

(3) To the extent possible, indicates the consumer’s belief and the reasons for the

belief that a billing error exists, and the type, date, and amount of the error.

(c) Time for resolution; general procedures. 

 28 [Reserved]

29 [Reserved] 
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the appropriate resolution procedures of paragraphs (e) and (f) of this section, as 

applicable, within the 30-day period; and

(2) The creditor shall comply with the appropriate resolution procedures of

paragraphs (e) and (f) of this section, as applicable, within 2 complete billing cycles (but

in no event later than 90 days) after receiving a billing error notice.

(d) Rules pending resolution. Until a billing error is resolved under paragraph (e)

or (f) of this section, the following rules apply:

(1) Consumer’s right to withhold disputed amount; collection action prohibited. 

The consumer need not pay (and the creditor may not try to collect) any portion of any

required payment that the consumer believes is related to the disputed amount (including

related finance or other charges).30

(3) Acceleration of debt and restriction of account prohibited. A creditor shall

not accelerate any part of the consumer’s indebtedness or restrict or close a consumer’s

If the cardholder has enrolled in an automatic 

payment plan offered by the card issuer and has agreed to pay the credit card 

indebtedness by periodic deductions from the cardholder’s deposit account, the card 

issuer shall not deduct any part of the disputed amount or related finance or other charges 

if a billing error notice is received any time up to 3 business days before the scheduled 

payment date.

(2) Adverse credit reports prohibited. The creditor or its agent shall not (directly

or indirectly) make or threaten to make an adverse report to any person about the

consumer’s credit standing, or report that an amount or account is delinquent, because the

consumer failed to pay the disputed amount or related finance or other charges.

 30 [Reserved]
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account solely because the consumer has exercised in good faith rights provided by this

section. A creditor may be subject to the forfeiture penalty under section 161(e) of the

act for failure to comply with any of the requirements of this section.

(4) Permitted creditor actions. A creditor is not prohibited from taking action to

collect any undisputed portion of the item or bill; from deducting any disputed amount

and related finance or other charges from the consumer’s credit limit on the account; or

from reflecting a disputed amount and related finance or other charges on a periodic

statement, provided that the creditor indicates on or with the periodic statement that

payment of any disputed amount and related finance or other charges is not required

pending the creditor’s compliance with this section.

(e) Procedures if billing error occurred as asserted. If a creditor determines that a

billing error occurred as asserted, it shall within the time limits in paragraph (c)(2) of this

section:

(1) Correct the billing error and credit the consumer’s account with any disputed

amount and related finance or other charges, as applicable; and

(2) Mail or deliver a correction notice to the consumer.

(f) Procedures if different billing error or no billing error occurred. If, after

conducting a reasonable investigation,31

(1) Mail or deliver to the consumer an explanation that sets forth the reasons for

the creditor’s belief that the billing error alleged by the consumer is incorrect in whole or

in part;

a creditor determines that no billing error

occurred or that a different billing error occurred from that asserted, the creditor shall

within the time limits in paragraph (c)(2) of this section:

 31 [Reserved]
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(2) Furnish copies of documentary evidence of the consumer’s indebtedness, if

the consumer so requests; and

(3) If a different billing error occurred, correct the billing error and credit the

consumer’s account with any disputed amount and related finance or other charges, as

applicable.

(g) Creditor’s rights and duties after resolution. If a creditor, after complying

with all of the requirements of this section, determines that a consumer owes all or part of

the disputed amount and related finance or other charges, the creditor:

(1) Shall promptly notify the consumer in writing of the time when payment is

due and the portion of the disputed amount and related finance or other charges that the

consumer still owes;

(2) Shall allow any time period disclosed under § 226.6(a)(1) or (b)(3), as 

applicable, and § 226.7(a)(8) or (b)(8), as applicable, during which the consumer can pay 

the amount due under paragraph (g)(1) of this section without incurring additional 

finance or other charges;

(3) May report an account or amount as delinquent because the amount due under

paragraph (g)(1) of this section remains unpaid after the creditor has allowed any time

period disclosed under § 226.6(a)(1) or (b)(3), as applicable, and § 226.7(a)(8) or (b)(8), 

as applicable or 10 days (whichever is longer) during which the consumer can pay the 

amount; but

(4) May not report that an amount or account is delinquent because the amount

due under paragraph (g)(1) of the section remains unpaid, if the creditor receives (within

the time allowed for payment in paragraph (g)(3) of this section) further written notice
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from the consumer that any portion of the billing error is still in dispute, unless the

creditor also:

(i) Promptly reports that the amount or account is in dispute;

(ii) Mails or delivers to the consumer (at the same time the report is made) a

written notice of the name and address of each person to whom the creditor makes a

report; and

(iii) Promptly reports any subsequent resolution of the reported delinquency to all

persons to whom the creditor has made a report.

(h) Reassertion of billing error. A creditor that has fully complied with the

requirements of this section has no further responsibilities under this section (other than

as provided in paragraph (g)(4) of this section) if a consumer reasserts substantially the

same billing error.

(i) Relation to Electronic Fund Transfer Act and Regulation E. If an extension of

credit is incident to an electronic fund transfer, under an agreement between a consumer

and a financial institution to extend credit when the consumer’s account is overdrawn or

to maintain a specified minimum balance in the consumer’s account, the creditor shall

comply with the requirements of Regulation E, 12 CFR § 205.11 governing error 

resolution rather than those of paragraphs (a), (b), (c), (e), (f), and (h) of this section.

16. Section 226.14 is amended by revising paragraphs (a), (b), and (c) and by 

removing and reserving footnotes 31a through 35 to read as follows:

§ 226.14 Determination of annual percentage rate.

(a) General rule. The annual percentage rate is a measure of the cost of credit, 

expressed as a yearly rate. An annual percentage rate shall be considered accurate if it is 
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not more than 1⁄8th of 1 percentage point above or below the annual percentage rate 

determined in accordance with this section.31a

 31a [Reserved]

An error in disclosure of the annual 

percentage rate or finance charge shall not, in itself, be considered a violation of this 

regulation if: 

(1) The error resulted from a corresponding error in a calculation tool used in

good faith by the creditor; and 

(2) Upon discovery of the error, the creditor promptly discontinues use of that 

calculation tool for disclosure purposes, and notifies the Board in writing of the error in 

the calculation tool.

(b) Annual percentage rate - in general. Where one or more periodic rates may 

be used to compute the finance charge, the annual percentage rate(s) to be disclosed for 

purposes of §§ 226.5a, 226.5b, 226.6, 226.7(a)(4) or (b)(4), 226.9, 226.15, 226.16 , and 

226.26 shall be computed by multiplying each periodic rate by the number of periods in a 

year.

(c) Optional effective annual percentage rate for periodic statements for creditors 

offering open-end plans subject to the requirements of § 226.5b. A creditor offering an 

open-end plan subject to the requirements of § 226.5b need not disclose an effective 

annual percentage rate. Such a creditor may, at its option, disclose an effective annual 

percentage rate(s) pursuant to § 226.7(a)(7) and compute the effective annual percentage 

rate as follows:

(1) Solely periodic rates imposed. If the finance charge is determined solely by 

applying one or more periodic rates, at the creditor’s option, either:
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(i) By multiplying each periodic rate by the number of periods in a year; or

(ii) By dividing the total finance charge for the billing cycle by the sum of the 

balances to which the periodic rates were applied and multiplying the quotient (expressed 

as a percentage) by the number of billing cycles in a year.

(2) Minimum or fixed charge, but not transaction charge, imposed. If the finance 

charge imposed during the billing cycle is or includes a minimum, fixed, or other charge 

not due to the application of a periodic rate, other than a charge with respect to any 

specific transaction during the billing cycle, by dividing the total finance charge for the 

billing cycle by the amount of the balance(s) to which it is applicable32 and multiplying 

the quotient (expressed as a percentage) by the number of billing cycles in a year.33

(3) Transaction charge imposed. If the finance charge imposed during the billing 

cycle is or includes a charge relating to a specific transaction during the billing cycle 

(even if the total finance charge also includes any other minimum, fixed, or other charge 

not due to the application of a periodic rate), by dividing the total finance charge imposed 

during the billing cycle by the total of all balances and other amounts on which a finance

charge was imposed during the billing cycle without duplication, and multiplying the 

If 

there is no balance to which the finance charge is applicable, an annual percentage rate 

cannot be determined under this section. Where the finance charge imposed during the 

billing cycle is or includes a loan fee, points, or similar charge that relates to opening, 

renewing, or continuing an account, the amount of such charge shall not be included in 

the calculation of the annual percentage rate.

 32 [Reserved]

33 [Reserved]
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quotient (expressed as a percentage) by the number of billing cycles in a year,34 except 

that the annual percentage rate shall not be less than the largest rate determined by 

multiplying each periodic rate imposed during the billing cycle by the number of periods 

in a year.35

 34 [Reserved]

35 [Reserved]

 Where the finance charge imposed during the billing cycle is or includes a 

loan fee, points, or similar charge that relates to the opening, renewing, or continuing an 

account, the amount of such charge shall not be included in the calculation of the annual 

percentage rate. See appendix F to this part regarding determination of the denominator 

of the fraction under this paragraph.

(4) If the finance charge imposed during the billing cycle is or includes a

minimum, fixed, or other charge not due to the application of a periodic rate and the total 

finance charge imposed during the billing cycle does not exceed 50 cents for a monthly 

or longer billing cycle, or the pro rata part of 50 cents for a billing cycle shorter than

monthly, at the creditor’s option, by multiplying each applicable periodic rate by the 

number of periods in a year, notwithstanding the provisions of paragraphs (c)(2) and 

(c)(3) of this section.

(d) Calculations where daily periodic rate applied. If the provisions of paragraph

(c)(1)(ii) or (c)(2) of this section apply and all or a portion of the finance charge is 

determined by the application of one or more daily periodic rates, the annual percentage 

rate may be determined either:

(1) By dividing the total finance charge by the average of the daily balances and 

multiplying the quotient by the number of billing cycles in a year; or
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(2) By dividing the total finance charge by the sum of the daily balances and 

multiplying the quotient by 365.

17. Section 226.16 is amended by republishing paragraph (a), revising paragraphs 

(b), (c), (d), and (e), adding new paragraphs (f), (g), and (h), and removing and reserving 

footnotes 36d and 36e to read as follows:

§ 226.16 Advertising.

(a) Actually available terms. If an advertisement for credit states specific credit 

terms, it shall state only those terms that actually are or will be arranged or offered by the 

creditor.

(b) Advertisement of terms that require additional disclosures. (1) Any term 

required to be disclosed under § 226.6(b)(3) set forth affirmatively or negatively in an 

advertisement for an open-end (not home-secured) credit plan triggers additional 

disclosures under this section. Any term required to be disclosed under § 226.6(a)(1) or 

(a)(2) set forth affirmatively or negatively in an advertisement for a home-equity plan 

subject to the requirements of § 226.5b triggers additional disclosures under this section. 

If any of the terms that trigger additional disclosures under this paragraph is set forth in 

an advertisement, the advertisement shall also clearly and conspicuously set forth the 

following:

36d

(ii) Any periodic rate that may be applied expressed as an annual percentage rate 

as determined under § 226.14(b). If the plan provides for a variable periodic rate, that 

fact shall be disclosed.

(i) Any minimum, fixed, transaction, activity or similar charge that is a finance 

charge under § 226.4 that could be imposed. 

 36d [Reserved]
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(iii) Any membership or participation fee that could be imposed.

(2) If an advertisement for credit to finance the purchase of goods or services 

specified in the advertisement states a periodic payment amount, the advertisement shall 

also state the total of payments and the time period to repay the obligation, assuming that 

the consumer pays only the periodic payment amount advertised. The disclosure of the 

total of payments and the time period to repay the obligation must be equally prominent 

to the statement of the periodic payment amount.

(c) Catalogs or other multiple-page advertisements; electronic advertisements. (1) 

If a catalog or other multiple-page advertisement, or an electronic advertisement (such as 

an advertisement appearing on an Internet Web site), gives information in a table or 

schedule in sufficient detail to permit determination of the disclosures required by 

paragraph (b) of this section, it shall be considered a single advertisement if:

(i) The table or schedule is clearly and conspicuously set forth; and

(ii) Any statement of terms set forth in § 226.6 appearing anywhere else in the 

catalog or advertisement clearly refers to the page or location where the table or schedule 

begins.

(2) A catalog or other multiple-page advertisement or an electronic advertisement 

(such as an advertisement appearing on an Internet Web site) complies with this 

paragraph if the table or schedule of terms includes all appropriate disclosures for a 

representative scale of amounts up to the level of the more commonly sold higher-priced 

property or services offered.

(d) Additional requirements for home-equity plans. (1) Advertisement of terms 

that require additional disclosures. If any of the terms required to be disclosed under 
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§ 226.6(a)(1) or (a)(2) or the payment terms of the plan are set forth, affirmatively or 

negatively, in an advertisement for a home-equity plan subject to the requirements of 

§ 226.5b, the advertisement also shall clearly and conspicuously set forth the following:

(i) Any loan fee that is a percentage of the credit limit under the plan and an 

estimate of any other fees imposed for opening the plan, stated as a single dollar amount 

or a reasonable range.

(ii) Any periodic rate used to compute the finance charge, expressed as an annual 

percentage rate as determined under § 226.14(b).

(iii) The maximum annual percentage rate that may be imposed in a variable-rate 

plan.

(2) Discounted and premium rates. If an advertisement states an initial annual 

percentage rate that is not based on the index and margin used to make later rate 

adjustments in a variable-rate plan, the advertisement also shall state with equal 

prominence and in close proximity to the initial rate: 

(i) The period of time such initial rate will be in effect; and 

(ii) A reasonably current annual percentage rate that would have been in effect 

using the index and margin.

(3) Balloon payment. If an advertisement contains a statement of any minimum 

periodic payment and a balloon payment may result if only the minimum periodic 

payments are made, even if such a payment is uncertain or unlikely, the advertisement 

also shall state with equal prominence and in close proximity to the minimum periodic 

payment statement that a balloon payment may result, if applicable.36e

 36e [Reserved.]

A balloon payment 
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results if paying the minimum periodic payments does not fully amortize the outstanding 

balance by a specified date or time, and the consumer is required to repay the entire 

outstanding balance at such time. If a balloon payment will occur when the consumer 

makes only the minimum payments required under the plan, an advertisement for such a 

program which contains any statement of any minimum periodic payment shall also state

with equal prominence and in close proximity to the minimum periodic payment 

statement:

(i) That a balloon payment will result; and

(ii) The amount and timing of the balloon payment that will result if the 

consumer makes only the minimum payments for the maximum period of time that the 

consumer is permitted to make such payments.

(4) Tax implications. An advertisement that states that any interest expense 

incurred under the home-equity plan is or may be tax deductible may not be misleading 

in this regard. If an advertisement distributed in paper form or through the Internet 

(rather than by radio or television) is for a home-equity plan secured by the consumer’s 

principal dwelling, and the advertisement states that the advertised extension of credit 

may exceed the fair market value of the dwelling, the advertisement shall clearly and 

conspicuously state that:

(i) The interest on the portion of the credit extension that is greater than the fair 

market value of the dwelling is not tax deductible for Federal income tax purposes; and

(ii) The consumer should consult a tax adviser for further information regarding 

the deductibility of interest and charges.
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(5) Misleading terms. An advertisement may not refer to a home-equity plan as 

“free money” or contain a similarly misleading term.

(6) Promotional rates and payments. (i) Definitions. The following definitions 

apply for purposes of paragraph (d)(6) of this section: 

(A) Promotional rate. The term “promotional rate” means, in a variable-rate 

plan, any annual percentage rate that is not based on the index and margin that will be 

used to make rate adjustments under the plan, if that rate is less than a reasonably current 

annual percentage rate that would be in effect under the index and margin that will be 

used to make rate adjustments under the plan.

(B) Promotional payment. The term “promotional payment” means:

(1) For a variable-rate plan, any minimum payment applicable for a promotional 

period that:

(i) Is not derived by applying the index and margin to the outstanding balance 

when such index and margin will be used to determine other minimum payments under 

the plan; and 

(ii) Is less than other minimum payments under the plan derived by applying a 

reasonably current index and margin that will be used to determine the amount of such 

payments, given an assumed balance. 

(2) For a plan other than a variable-rate plan, any minimum payment applicable 

for a promotional period if that payment is less than other payments required under the 

plan given an assumed balance.
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(C) Promotional period. A “promotional period” means a period of time, less 

than the full term of the loan, that the promotional rate or promotional payment may be 

applicable.

(ii) Stating the promotional period and post-promotional rate or payments. If any 

annual percentage rate that may be applied to a plan is a promotional rate, or if any 

payment applicable to a plan is a promotional payment, the following must be disclosed 

in any advertisement, other than television or radio advertisements, in a clear and 

conspicuous manner with equal prominence and in close proximity to each listing of the 

promotional rate or payment:

(A) The period of time during which the promotional rate or promotional 

payment will apply; 

(B) In the case of a promotional rate, any annual percentage rate that will apply 

under the plan. If such rate is variable, the annual percentage rate must be disclosed in 

accordance with the accuracy standards in §§ 226.5b or 226.16(b)(1)(ii) as applicable; 

and

(C) In the case of a promotional payment, the amounts and time periods of any 

payments that will apply under the plan. In variable-rate transactions, payments that will 

be determined based on application of an index and margin shall be disclosed based on a 

reasonably current index and margin. 

(iii) Envelope excluded. The requirements in paragraph (d)(6)(ii) of this section 

do not apply to an envelope in which an application or solicitation is mailed, or to a 

banner advertisement or pop-up advertisement linked to an application or solicitation 

provided electronically.
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(e) Alternative disclosures—television or radio advertisements. An 

advertisement made through television or radio stating any of the terms requiring 

additional disclosures under paragraphs (b)(1) or (d)(1) of this section may alternatively 

comply with paragraphs (b)(1) or (d)(1) of this section by stating the information required 

by paragraphs (b)(1)(ii) or (d)(1)(ii) of this section, as applicable, and listing a toll-free 

telephone number, or any telephone number that allows a consumer to reverse the phone 

charges when calling for information, along with a reference that such number may be 

used by consumers to obtain the additional cost information.

(f) Misleading terms. An advertisement may not refer to an annual percentage 

rate as “fixed,” or use a similar term, unless the advertisement also specifies a time period 

that the rate will be fixed and the rate will not increase during that period, or if no such 

time period is provided, the rate will not increase while the plan is open.

(g) Promotional Rates. (1) Scope. The requirements of this paragraph apply to 

any advertisement of an open-end (not home-secured) plan, including promotional 

materials accompanying applications or solicitations subject to § 226.5a(c) or 

accompanying applications or solicitations subject to § 226.5a(e).

(2) Definitions. (i) Promotional rate means any annual percentage rate

applicable to one or more balances or transactions on an open-end (not home-secured) 

plan for a specified period of time that is lower than the annual percentage rate that will 

be in effect at the end of that period on such balances or transactions.

(ii) Introductory rate means a promotional rate offered in connection with the 

opening of an account. 
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(iii) Promotional period means the maximum time period for which the 

promotional rate may be applicable.

(3) Stating the term “introductory”. If any annual percentage rate that may be 

applied to the account is an introductory rate, the term introductory or intro must be in 

immediate proximity to each listing of the introductory rate in a written or electronic 

advertisement.

(4) Stating the promotional period and post-promotional rate. If any annual 

percentage rate that may be applied to the account is a promotional rate under paragraph 

(g)(2)(i) of this section, the information in paragraphs (g)(4)(i) and (g)(4)(ii) of this 

section must be stated in a clear and conspicuous manner in the advertisement. If the rate 

is stated in a written or electronic advertisement, the information in paragraphs (g)(4)(i) 

and (g)(4)(ii) of this section must also be stated in a prominent location closely proximate 

to the first listing of the promotional rate.

(i) When the promotional rate will end; and

(ii) The annual percentage rate that will apply after the end of the promotional 

period. If such rate is variable, the annual percentage rate must comply with the accuracy 

standards in §§ 226.5a(c)(2), 226.5a(d)(3), 226.5a(e)(4), or 226.16(b)(1)(ii), as 

applicable. If such rate cannot be determined at the time disclosures are given because 

the rate depends at least in part on a later determination of the consumer’s 

creditworthiness, the advertisement must disclose the specific rates or the range of rates

that might apply.

(5) Envelope excluded. The requirements in paragraph (g)(4) of this section do 

not apply to an envelope or other enclosure in which an application or solicitation is 
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mailed, or to a banner advertisement or pop-up advertisement, linked to an application or 

solicitation provided electronically.

18. Section 226.30 is amended by republishing the introductory text and 

paragraphs (a) and (b) and by removing and reserving footnote 50.

§ 226.30 Limitation on rates.

A creditor shall include in any consumer credit contract secured by a dwelling and 

subject to the act and this regulation the maximum interest rate that may be imposed 

during the term of the obligation50

The following provisions of Subpart B apply if credit cards are issued and the 

card issuer and the seller are the same or related persons; no finance charge is imposed; 

consumers are billed in full for each use of the card on a transaction-by-transaction basis, 

by means of an invoice or other statement reflecting each use of the card; and no 

cumulative account is maintained which reflects the transactions by each consumer 

during a period of time, such as a month. The term “related person” refers to, for 

example, a franchised or licensed seller of a creditor’s product or service or a seller who 

assigns or sells sales accounts to a creditor or arranges for credit under a plan that allows 

when:

(a) In the case of closed-end credit, the annual percentage rate may increase after 

consummation, or

(b) In the case of open-end credit, the annual percentage rate may increase during 

the plan.

19. Appendix E to part 226 is revised to read as follows.

APPENDIX E TO PART 226—RULES FOR CARD ISSUERS THAT BILL ON A TRANSACTIONBY-TRANSACTION BASIS

 50 [Reserved.]
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the consumer to use the credit only in transactions with that seller. A seller is not related 

to the creditor merely because the seller and the creditor have an agreement authorizing 

the seller to honor the creditor’s credit card.

1. Section 226.6(a)(5) or § 226.6(b)(5)(iii).

2. Section 226.6(a)(2) or § 226.6(b)(3)(ii)(B) , as applicable. The disclosure 

required by § 226.6(a)(2) or § 226.6(b)(3)(ii)(B) shall be limited to those charges that are 

or may be imposed as a result of the deferral of payment by use of the card, such as late 

payment or delinquency charges. A tabular format is not required.

3. Section 226.6(a)(4) or § 226.6(b)(5)(ii).

4. Section 226.7(a)(2) or § 226.7(b)(2), as applicable; § 226.7(a)(9) or 

§ 226.7(b)(9), as applicable. Creditors may comply by placing the required disclosures 

on the invoice or statement sent to the consumer for each transaction.

5. Section 226.9(a). Creditors may comply by mailing or delivering the 

statement required by § 226.6(a)(5) or § 226.6(b)(5)(iii) (see appendix G-3 and G-3(A) to 

this part) to each consumer receiving a transaction invoice during a one-month period 

chosen by the card issuer or by sending either the statement prescribed by § 226.6(a)(5)

or § 226.6(b)(5)(iii), or an alternative billing error rights statement substantially similar to 

that in appendix G-4 and G-4(A) to this part, with each invoice sent to a consumer. 

6. Section 226.9(c). A tabular format is not required.

7. Section 226.10.

8. Section 226.11(a). This section applies when a card issuer receives a payment 

or other credit that exceeds by more than $1 the amount due, as shown on the transaction 

invoice. The requirement to credit amounts to an account may be complied with by other 
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reasonable means, such as by a credit memorandum. Since no periodic statement is 

provided, a notice of the credit balance shall be sent to the consumer within a reasonable 

period of time following its occurrence unless a refund of the credit balance is mailed or 

delivered to the consumer within seven business days of its receipt by the card issuer.

9. Section 226.12 including § 226.12(c) and (d), as applicable. Section 226.12(e) 

is inapplicable.

10. Section 226.13, as applicable. All references to “periodic statement” shall be 

read to indicate the invoice or other statement for the relevant transaction. All actions 

with regard to correcting and adjusting a consumer’s account may be taken by issuing a 

refund or a new invoice, or by other appropriate means consistent with the purposes of 

the section.

11. Section 226.15, as applicable.

20. Appendix F to Part 226 is revised to read as follows:

APPENDIX F TO PART 226—OPTIONAL ANNUAL PERCENTAGE RATE COMPUTATIONS 

FOR CREDITORS OFFERING OPEN-END PLANS SUBJECT TO THE REQUIREMENTS OF

§ 226.5B

In determining the denominator of the fraction under § 226.14(c)(3), no amount 

will be used more than once when adding the sum of the balances32

 32[Reserved]

subject to periodic 

rates to the sum of the amounts subject to specific transaction charges. (Where a portion 

of the finance charge is determined by application of one or more daily periodic rates, the 

phrase “sum of the balances” shall also mean the “average of daily balances.”) In every 

case, the full amount of transactions subject to specific transaction charges shall be 

included in the denominator. Other balances or parts of balances shall be included 
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according to the manner of determining the balance subject to a periodic rate, as 

illustrated in the following examples of accounts on monthly billing cycles:

1. Previous balance—none.

A specific transaction of $100 occurs on the first day of the billing cycle. The 

average daily balance is $100. A specific transaction charge of 3 percent is applicable to 

the specific transaction. The periodic rate is 11⁄2 percent applicable to the average daily 

balance. The numerator is the amount of the finance charge, which is $4.50. The 

denominator is the amount of the transaction (which is $100), plus the amount by which 

the balance subject to the periodic rate exceeds the amount of the specific transactions 

(such excess in this case is 0), totaling $100. 

The annual percentage rate is the quotient (which is 41⁄2 percent) multiplied by 

12 (the number of months in a year), i.e., 54 percent.

2. Previous balance—$100.

A specific transaction of $100 occurs at the midpoint of the billing cycle. The 

average daily balance is $150. A specific transaction charge of 3 percent is applicable to 

the specific transaction. The periodic rate is 11⁄2 percent applicable to the average daily 

balance. The numerator is the amount of the finance charge which is $5.25. The 

denominator is the amount of the transaction (which is $100), plus the amount by which 

the balance subject to the periodic rate exceeds the amount of the specific transaction 

(such excess in this case is $50), totaling $150. As explained in example 1, the annual 

percentage rate is 31⁄2 percent x 12 = 42 percent.

3. If, in example 2, the periodic rate applies only to the previous balance, the 

numerator is $4.50 and the denominator is $200 (the amount of the transaction, $100, 
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plus the balance subject only to the periodic rate, the $100 previous balance). As 

explained in example 1, the annual percentage rate is 21⁄4 percent x 12 = 27 percent.

4. If, in example 2, the periodic rate applies only to an adjusted balance (previous 

balance less payments and credits) and the consumer made a payment of $50 at the 

midpoint of the billing cycle, the numerator is $3.75 and the denominator is $150 (the 

amount of the transaction, $100, plus the balance subject to the periodic rate, the 

$50 adjusted balance). As explained in example 1, the annual percentage rate is 21⁄2 

percent x 12 = 30 percent.

5. Previous balance—$100.

A specific transaction (check) of $100 occurs at the midpoint of the billing cycle. 

The average daily balance is $150. The specific transaction charge is $.25 per check. The 

periodic rate is 11⁄2 percent applied to the average daily balance. The numerator is the 

amount of the finance charge, which is $2.50 and includes the $.25 check charge and the 

$2.25 resulting from the application of the periodic rate. The denominator is the full 

amount of the specific transaction (which is $100) plus the amount by which the average 

daily balance exceeds the amount of the specific transaction (which in this case is $50), 

totaling $150. As explained in example 1, the annual percentage rate would be 12⁄3 

percent x 12 = 20 percent.

6. Previous balance—none.

A specific transaction of $100 occurs at the midpoint of the billing cycle. The 

average daily balance is $50. The specific transaction charge is 3 percent of the 

transaction amount or $3.00. The periodic rate is 11⁄2 percent per month applied to the 

average daily balance. The numerator is the amount of the finance charge, which is 
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$3.75, including the $3.00 transaction charge and $.75 resulting from application of the 

periodic rate. The denominator is the full amount of the specific transaction ($100) plus 

the amount by which the balance subject to the periodic rate exceeds the amount of the 

transaction ($0). Where the specific transaction amount exceeds the balance subject to 

the periodic rate, the resulting number is considered to be zero rather than a negative 

number ($50 − $100= −$50). The denominator, in this case, is $100. As explained in 

example 1, the annual percentage rate is 3 3⁄4 percent x 12 = 45 percent.

21. Appendix G to Part 226 is amended by:

A. Revising the table of contents at the beginning of the appendix; 

B. Revising Forms G-1, G-2, G-3, G-4, G-10(A), G-10(B), G-11, and G-13(A) 

and (B);

C. Revising the headings of Forms G-1, G-3, G-4, and G-10(C);

D. Adding new Forms G-1(A), G-2(A), G-3(A), G-4(A), G-10(D) and (E), G16(A) and (B), G-17(A) through (D), G-18(A) through (G), G-19, G-20, and G-21 in 

numerical order; and

E. Removing and reserving Form G-12.

APPENDIX G TO PART 226—OPEN-END MODEL FORMS AND CLAUSES

G-1 Balance Computation Methods Model Clauses (Home-equity Plans) (§§ 226.6 and 

226.7)

G-1(A) Balance Computation Methods Model Clauses (Plans other than Home-equity

Plans) (§§ 226.6 and 226.7)

G-2 Liability for Unauthorized Use Model Clause (Home-equity Plans) (§ 226.12)
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G-2(A) Liability for Unauthorized Use Model Clause (Plans Other Than Home-equity

Plans) (§ 226.12)

G-3 Long-Form Billing-Error Rights Model Form (Home-equity Plans) (§§ 226.6 and 

226.9)

G-3(A) Long-Form Billing-Error Rights Model Form (Plans Other Than Home-equity

Plans) (§§ 226.6 and 226.9)

G-4 Alternative Billing-Error Rights Model Form (Home-equity Plans) (§ 226.9)

G-4(A) Alternative Billing-Error Rights Model Form (Plans Other Than Home-equity

Plans) (§ 226.9)

G-5 Rescission Model Form (When Opening an Account) (§ 226.15)

G-6 Rescission Model Form (For Each Transaction) (§ 226.15)

G-7 Rescission Model Form (When Increasing the Credit Limit) (§ 226.15)

G-8 Rescission Model Form (When Adding a Security Interest) (§ 226.15)

G-9 Rescission Model Form (When Increasing the Security) (§ 226.15)

G-10(A) Applications and Solicitations Model Form (Credit Cards) (§ 226.5a(b))

G-10(B) Applications and Solicitations Sample (Credit Cards) (§ 226.5a(b))

G-10(C) Applications and Solicitations Sample (Credit Cards) (§ 226.5a(b))

G-10(D) Applications and Solicitations Model Form (Charge Cards) (§ 226.5a(b))

G-10(E) Applications and Solicitations Sample (Charge Cards) (§ 226.5a(b))

G-11 Applications and Solicitations Made Available to General Public Model Clauses 

(§ 226.5a(e))

G-12 Reserved

G-13(A) Change in Insurance Provider Model Form (Combined Notice) (§ 226.9(f))
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G-13(B) Change in Insurance Provider Model Form (§ 226.9(f)(2))

G-14A Home-equity Sample

G-14B Home-equity Sample

G-15 Home-equity Model Clauses

G-16(A) Debt Suspension Model Clause (§ 226.4(d)(3))

G-16(B) Debt Suspension Sample (§ 226.4(d)(3))

G-17(A) Account-opening Model Form (§ 226.6(b)(2))

G-17(B) Account-opening Sample (§ 226.6(b)(2))

G-17(C) Account-opening Sample (§ 226.6(b)(2))

G-17(D) Account-opening Sample (§ 226.6(b)(2))

G-18(A) Transactions; Interest Charges; Fees Sample (§ 226.7(b))

G-18(B) Late Payment Fee Sample (§ 226.7(b))

G-18(C) Actual Repayment Period Sample Disclosure on Periodic Statement 

(§ 226.7(b))

G-18(D) New Balance, Due Date, Late Payment and Minimum Payment Sample (Credit 

cards) (§ 226.7(b))

G-18(E) New Balance, Due Date, and Late Payment Sample (Open-end Plans (Noncredit-card Accounts)) (§ 226.7(b))

G-18(F) Periodic Statement Form

G-18(G) Periodic Statement Form

G-19 Checks Accessing a Credit Card Account Sample (§ 226.9(b)(3))

G-20 Change-in-Terms Sample (§ 226.9(c)(2))

G-21 Penalty Rate Increase Sample (§ 226.9(g)(3))
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G-1 – Balance Computation Methods Model Clauses (Home-equity Plans)

(a) Adjusted balance method 

We figure [a portion of] the finance charge on your account by applying the periodic rate 

to the “adjusted balance” of your account. We get the “adjusted balance” by taking the 

balance you owed at the end of the previous billing cycle and subtracting [any unpaid 

finance charges and] any payments and credits received during the present billing cycle.

(b) Previous balance method 

We figure [a portion of] the finance charge on your account by applying the periodic rate 

to the amount you owe at the beginning of each billing cycle [minus any unpaid finance 

charges]. We do not subtract any payments or credits received during the billing cycle. 

[The amount of payments and credits to your account this billing cycle was $ ___.]

(c) Average daily balance method (excluding current transactions) 

We figure [a portion of] the finance charge on your account by applying the periodic rate 

to the “average daily balance” of your account (excluding current transactions). To get 

the “average daily balance” we take the beginning balance of your account each day and 

subtract any payments or credits [and any unpaid finance charges]. We do not add in any 

new [purchases/advances/loans]. This gives us the daily balance. Then, we add all the 

daily balances for the billing cycle together and divide the total by the number of days in 

the billing cycle. This gives us the “average daily balance.”

(d) Average daily balance method (including current transactions) 

We figure [a portion of] the finance charge on your account by applying the periodic rate 

to the “average daily balance” of your account (including current transactions). To get 

the “average daily balance” we take the beginning balance of your account each day, add 
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any new [purchases/advances/loans], and subtract any payments or credits, [and unpaid 

finance charges]. This gives us the daily balance. Then, we add up all the daily balances 

for the billing cycle and divide the total by the number of days in the billing cycle. This 

gives us the “average daily balance.”

(e) Ending balance method 

We figure [a portion of] the finance charge on your account by applying the periodic rate 

to the amount you owe at the end of each billing cycle (including new purchases and 

deducting payments and credits made during the billing cycle).

(f) Daily balance method (including current transactions) 

We figure [a portion of] the finance charge on your account by applying the periodic rate 

to the “daily balance” of your account for each day in the billing cycle. To get the “daily 

balance” we take the beginning balance of your account each day, add any new 

[purchases/advances/fees], and subtract [any unpaid finance charges and] any payments 

or credits. This gives us the daily balance.

G-1(A) – Balance Computation Methods Model Clauses (Plans Other Than Home-equity

Plans)

(a) Adjusted balance method 

We figure the interest charge on your account by applying the periodic rate to the 

“adjusted balance” of your account. We get the “adjusted balance” by taking the balance 

you owed at the end of the previous billing cycle and subtracting [any unpaid interest or 

other finance charges and] any payments and credits received during the present billing 

cycle.

(b) Previous balance method 
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We figure the interest charge on your account by applying the periodic rate to the amount 

you owe at the beginning of each billing cycle. We do not subtract any payments or 

credits received during the billing cycle.

(c) Average daily balance method (excluding current transactions) 

We figure the interest charge on your account by applying the periodic rate to the 

“average daily balance” of your account. To get the “average daily balance” we take the 

beginning balance of your account each day and subtract [any unpaid interest or other 

finance charges and] any payments or credits. We do not add in any new 

[purchases/advances/fees]. This gives us the daily balance. Then, we add all the daily 

balances for the billing cycle together and divide the total by the number of days in the 

billing cycle. This gives us the “average daily balance.”

(d) Average daily balance method (including current transactions) 

We figure the interest charge on your account by applying the periodic rate to the 

“average daily balance” of your account. To get the “average daily balance” we take the 

beginning balance of your account each day, add any new [purchases/advances/fees], and 

subtract [any unpaid interest or other finance charges and] any payments or credits. This 

gives us the daily balance. Then, we add up all the daily balances for the billing cycle 

and divide the total by the number of days in the billing cycle. This gives us the “average 

daily balance.”

(e) Ending balance method 

We figure the interest charge on your account by applying the periodic rate to the amount 

you owe at the end of each billing cycle (including new [purchases/advances/fees] and 

deducting payments and credits made during the billing cycle).
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(f) Daily balance method (including current transactions)

We figure the interest charge on your account by applying the periodic rate to the “daily 

balance” of your account for each day in the billing cycle. To get the “daily balance” we 

take the beginning balance of your account each day, add any new 

[purchases/advances/fees], and subtract [any unpaid interest or other finance charges and] 

any payments or credits. This gives us the daily balance. 

G-2—Liability for Unauthorized Use Model Clause (Home-equity Plans)

You may be liable for the unauthorized use of your credit card [or other term that 

describes the credit card]. You will not be liable for unauthorized use that occurs after 

you notify [name of card issuer or its designee] at [address], orally or in writing, of the 

loss, theft, or possible unauthorized use. [You may also contact us on the Web: 

[Creditor Web or e-mail address]] In any case, your liability will not exceed [insert $50 

or any lesser amount under agreement with the cardholder].

G-2(A)—Liability for Unauthorized Use Model Clause (Plans Other Than Home-equity

Plans)

If you notice the loss or theft of your credit card or a possible unauthorized use of your

card, you should write to us immediately at:

[address] [address listed on your bill], 

or call us at [telephone number].

[You may also contact us on the Web: [Creditor Web or e-mail address]]

You will not be liable for any unauthorized use that occurs after you notify us. You may, 

however, be liable for unauthorized use that occurs before your notice to us. In any case, 
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your liability will not exceed [insert $50 or any lesser amount under agreement with the 

cardholder].

G-3—Long-Form Billing-Error Rights Model Form (Home-equity Plans)

YOUR BILLING RIGHTS

KEEP THIS NOTICE FOR FUTURE USE

This notice contains important information about your rights and our responsibilities 

under the Fair Credit Billing Act.

Notify Us in Case of Errors or Questions About Your Bill

If you think your bill is wrong, or if you need more information about a transaction on 

your bill, write us [on a separate sheet] at [address] [the address listed on your bill]. Write 

to us as soon as possible. We must hear from you no later than 60 days after we sent you 

the first bill on which the error or problem appeared. [You may also contact us on the 

Web: [Creditor Web or e-mail address]] You can telephone us, but doing so will not 

preserve your rights.

In your letter, give us the following information:

• Your name and account number.

• The dollar amount of the suspected error.

• Describe the error and explain, if you can, why you believe there is an error. If 

you need more information, describe the item you are not sure about.

If you have authorized us to pay your credit card bill automatically from your 

savings or checking account, you can stop the payment on any amount you think is 

wrong. To stop the payment your letter must reach us three business days before the 

automatic payment is scheduled to occur.
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Your Rights and Our Responsibilities After We Receive Your Written Notice

We must acknowledge your letter within 30 days, unless we have corrected the error by 

then. Within 90 days, we must either correct the error or explain why we believe the bill 

was correct.

After we receive your letter, we cannot try to collect any amount you question, or report 

you as delinquent. We can continue to bill you for the amount you question, including 

finance charges, and we can apply any unpaid amount against your credit limit. You do 

not have to pay any questioned amount while we are investigating, but you are still 

obligated to pay the parts of your bill that are not in question.

If we find that we made a mistake on your bill, you will not have to pay any finance 

charges related to any questioned amount. If we didn’t make a mistake, you may have to 

pay finance charges, and you will have to make up any missed payments on the 

questioned amount. In either case, we will send you a statement of the amount you owe 

and the date that it is due.

If you fail to pay the amount that we think you owe, we may report you as delinquent. 

However, if our explanation does not satisfy you and you write to us within ten days 

telling us that you still refuse to pay, we must tell anyone we report you to that you have 

a question about your bill. And, we must tell you the name of anyone we reported you to. 

We must tell anyone we report you to that the matter has been settled between us when it 

finally is.

If we don’t follow these rules, we can’t collect the first $50 of the questioned amount, 

even if your bill was correct.

Special Rule for Credit Card Purchases
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If you have a problem with the quality of property or services that you purchased with a 

credit card, and you have tried in good faith to correct the problem with the merchant, 

you may have the right not to pay the remaining amount due on the property or services. 

There are two limitations on this right:

(a) You must have made the purchase in your home state or, if not within your home 

state within 100 miles of your current mailing address; and

(b) The purchase price must have been more than $50.

These limitations do not apply if we own or operate the merchant, or if we mailed you the 

advertisement for the property or services.

G-3(A)—Long-Form Billing-Error Rights Model Form (Plans Other Than Home-equity

Plans)

Your Billing Rights: Keep this Document for Future Use

This notice tells you about your rights and our responsibilities under the Fair Credit 

Billing Act.

What To Do If You Find A Mistake On Your Statement

If you think there is an error on your statement, write to us at: 

[Creditor Name]

[Creditor Address]

[You may also contact us on the Web: [Creditor Web or e-mail address]]

In your letter, give us the following information:

• Account information: Your name and account number.

• Dollar amount: The dollar amount of the suspected error.
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• Description of problem: If you think there is an error on your bill, describe what 

you believe is wrong and why you believe it is a mistake. 

You must contact us:

• Within 60 days after the error appeared on your statement.

• At least 3 business days before an automated payment is scheduled, if you want to 

stop payment on the amount you think is wrong.

You must notify us of any potential errors in writing [or electronically]. You may call 

us, but if you do we are not required to investigate any potential errors and you may have 

to pay the amount in question.

What Will Happen After We Receive Your Letter

When we receive your letter, we must do two things:

1. Within 30 days of receiving your letter, we must tell you that we received your 

letter. We will also tell you if we have already corrected the error.

2. Within 90 days of receiving your letter, we must either correct the error or explain 

to you why we believe the bill is correct.

While we investigate whether or not there has been an error:

• We cannot try to collect the amount in question, or report you as delinquent on 

that amount. 

• The charge in question may remain on your statement, and we may continue to 

charge you interest on that amount.

• While you do not have to pay the amount in question, you are responsible for the 

remainder of your balance.

• We can apply any unpaid amount against your credit limit. 
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123

After we finish our investigation, one of two things will happen:

• If we made a mistake: You will not have to pay the amount in question or any 

interest or other fees related to that amount.

• If we do not believe there was a mistake: You will have to pay the amount in 

question, along with applicable interest and fees. We will send you a statement of 

the amount you owe and the date payment is due. We may then report you as 

delinquent if you do not pay the amount we think you owe.

If you receive our explanation but still believe your bill is wrong, you must write to us 

within 10 days telling us that you still refuse to pay. If you do so, we cannot report you 

as delinquent without also reporting that you are questioning your bill. We must tell you 

the name of anyone to whom we reported you as delinquent, and we must let those 

organizations know when the matter has been settled between us.

If we do not follow all of the rules above, you do not have to pay the first $50 of the 

amount you question even if your bill is correct.

Your Rights If You Are Dissatisfied With Your Credit Card Purchases

If you are dissatisfied with the goods or services that you have purchased with your credit 

card, and you have tried in good faith to correct the problem with the merchant, you may 

have the right not to pay the remaining amount due on the purchase. 

To use this right, all of the following must be true:

1. The purchase must have been made in your home state or within 100 miles of your 

current mailing address, and the purchase price must have been more than $50. 

(Note: Neither of these are necessary if your purchase was based on an 
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advertisement we mailed to you, or if we own the company that sold you the 

goods or services.)

2. You must have used your credit card for the purchase. Purchases made with cash 

advances from an ATM or with a check that accesses your credit card account do 

not qualify.

3. You must not yet have fully paid for the purchase.

If all of the criteria above are met and you are still dissatisfied with the purchase, contact 

us in writing [or electronically] at:

[Creditor Name]

[Creditor Address]

[[Creditor Web or e-mail address]]

While we investigate, the same rules apply to the disputed amount as discussed above. 

After we finish our investigation, we will tell you our decision. At that point, if we think 

you owe an amount and you do not pay, we may report you as delinquent. 

G-4—Alternative Billing-Error Rights Model Form (Home-equity Plans)

BILLING RIGHTS SUMMARY

In Case of Errors or Questions About Your Bill

If you think your bill is wrong, or if you need more information about a transaction on 

your bill, write us [on a separate sheet] at [address] [the address shown on your bill] as 

soon as possible. [You may also contact us on the Web: [Creditor Web or e-mail 

address]] We must hear from you no later than 60 days after we sent you the first bill on 

which the error or problem appeared. You can telephone us, but doing so will not 

preserve your rights.
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In your letter, give us the following information:

• Your name and account number.

• The dollar amount of the suspected error.

• Describe the error and explain, if you can, why you believe there is an error. If you 

need more information, describe the item you are unsure about.

You do not have to pay any amount in question while we are investigating, but you are 

still obligated to pay the parts of your bill that are not in question. While we investigate 

your question, we cannot report you as delinquent or take any action to collect the 

amount you question.

Special Rule for Credit Card Purchases

If you have a problem with the quality of goods or services that you purchased with a 

credit card, and you have tried in good faith to correct the problem with the merchant, 

you may not have to pay the remaining amount due on the goods or services. You have 

this protection only when the purchase price was more than $50 and the purchase was 

made in your home state or within 100 miles of your mailing address. (If we own or 

operate the merchant, or if we mailed you the advertisement for the property or services, 

all purchases are covered regardless of amount or location of purchase.)

G-4(A)—Alternative Billing-Error Rights Model Form (Plans Other Than Home-equity

Plans)

What To Do If You Think You Find A Mistake On Your Statement

If you think there is an error on your statement, write to us at: 

[Creditor Name]

[Creditor Address]
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126

[You may also contact us on the Web: [Creditor Web or e-mail address]]

In your letter, give us the following information:

• Account information: Your name and account number.

• Dollar amount: The dollar amount of the suspected error.

• Description of Problem: If you think there is an error on your bill, describe what 

you believe is wrong and why you believe it is a mistake.

You must contact us within 60 days after the error appeared on your statement. 

You must notify us of any potential errors in writing [or electronically] . You may call 

us, but if you do we are not required to investigate any potential errors and you may have 

to pay the amount in question. 

While we investigate whether or not there has been an error, the following are true:

• We cannot try to collect the amount in question, or report you as delinquent on 

that amount.

• The charge in question may remain on your statement, and we may continue to 

charge you interest on that amount. But, if we determine that we made a mistake, 

you will not have to pay the amount in question or any interest or other fees 

related to that amount.

• While you do not have to pay the amount in question, you are responsible for the 

remainder of your balance.

• We can apply any unpaid amount against your credit limit. 

Your Rights If You Are Dissatisfied With Your Credit Card Purchases
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If you are dissatisfied with the goods or services that you have purchased with your credit 

card, and you have tried in good faith to correct the problem with the merchant, you may 

have the right not to pay the remaining amount due on the purchase. 

To use this right, all of the following must be true:

1. The purchase must have been made in your home state or within 100 miles of your 

current mailing address, and the purchase price must have been more than $50. 

(Note: Neither of these are necessary if your purchase was based on an 

advertisement we mailed to you, or if we own the company that sold you the 

goods or services.)

2. You must have used your credit card for the purchase. Purchases made with cash 

advances from an ATM or with a check that accesses your credit card account do 

not qualify.

3. You must not yet have fully paid for the purchase.

If all of the criteria above are met and you are still dissatisfied with the purchase, contact 

us in writing [or electronically] at:

[Creditor Name]

[Creditor Address]

[[Creditor Web address]]

While we investigate, the same rules apply to the disputed amount as discussed above. 

After we finish our investigation, we will tell you our decision. At that point, if we think 

you owe an amount and you do not pay we may report you as delinquent.

* * * * * 

G-10(A) – Applications and Solicitations Model Form (Credit Cards)
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[Insert G-10(A) – Applications and Solicitations Model Form (Credit Cards)]

G-10(B) – Applications and Solicitations Sample (Credit Cards) 

[Insert G-10(B) – Applications and Solicitations Sample (Credit Cards)]

G-10(C) – Applications and Solicitations Sample (Charge Cards)

[Insert G-10(C) – Applications and Solicitations Sample (Charge Cards)] 

G-10(D) – Applications and Solicitations Model Form (Charge Cards)

[Insert G-10(D) – Applications and Solicitations Model Form (Charge Cards)]

G-10(E) – Applications and Solicitations Sample (Charge Cards) 

[Insert G-10(E) – Applications and Solicitations Sample (Charge Cards)]

G-11 – Applications and Solicitations Made Available to the General Public Model 

Clauses

(a) Disclosure of Required Credit Information

The information about the costs of the card described in this [application]/[solicitation] is 

accurate as of (month/year). This information may have changed after that date. To find 

out what may have changed, [call us at (telephone number)][write to us at (address)].

(b) No Disclosure of Credit Information

There are costs associated with the use of this card. To obtain information about these 

costs, call us at (telephone number) or write to us at (address). 

G-12 [Reserved]

G-13(A)—Change in Insurance Provider Model Form (Combined Notice)

The credit card account you have with us is insured. This is to notify you that we plan to 

replace your current coverage with insurance coverage from a different insurer. 
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If we obtain insurance for your account from a different insurer, you may cancel the 

insurance.

[Your premium rate will increase to $ _ per _ .]

[Your coverage will be affected by the following:

[ ] The elimination of a type of coverage previously provided to you. 

[(explanation)] [See _ of the attached policy for details.]

[ ] A lowering of the age at which your coverage will terminate or will become 

more restrictive. [(explanation)] [See _ of the attached policy or certificate for details.]

[ ] A decrease in your maximum insurable loan balance, maximum periodic 

benefit payment, maximum number of payments, or any other decrease in the dollar 

amount of your coverage or benefits. [(explanation)] [See_of the attached policy or 

certificate for details.]

[ ] A restriction on the eligibility for benefits for you or others. [(explanation)] 

[See_ of the attached policy or certificate for details.]

[ ] A restriction in the definition of “disability” or other key term of coverage. 

[(explanation)] [See_of the attached policy or certificate for details.]

[ ] The addition of exclusions or limitations that are broader or other than those 

under the current coverage. [(explanation)] [See_ of the attached policy or certificate for 

details.]

[ ] An increase in the elimination (waiting) period or a change to nonretroactive 

coverage. [(explanation)] [See_of the attached policy or certificate for details).]

[The name and mailing address of the new insurer providing the coverage for your 

account is (name and address).]
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G-13(B)—Change in Insurance Provider Model Form

We have changed the insurer providing the coverage for your account. The new insurer’s 

name and address are (name and address). A copy of the new policy or certificate is 

attached.

You may cancel the insurance for your account.

* * * * *

G-16(A) Debt Suspension Model Clause 

Please enroll me in the optional [insert name of program], and bill my account the fee of 

[how cost is determined]. I understand that enrollment is not required to obtain credit. I 

also understand that depending on the event, the protection may only temporarily suspend 

my duty to make minimum payments, not reduce the balance I owe. I understand that my 

balance will actually grow during the suspension period as interest continues to 

accumulate.

[To Enroll, Sign Here]/[To Enroll, Initial Here]. X ____________________ 

G-16(B) Debt Suspension Sample

Please enroll me in the optional [name of program], and bill my account the fee of $.83 

per $100 of my month-end account balance. I understand that enrollment is not required 

to obtain credit. I also understand that depending on the event, the protection may only 

temporarily suspend my duty to make minimum payments, not reduce the balance I owe. 

I understand that my balance will actually grow during the suspension period as interest 

continues to accumulate. 

To Enroll, Initial Here. X ____________________

G-17(A) Account-Opening Model Form
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[Insert G-17(A) Account-Opening Model Form]

G-17(B) Account-Opening Sample

[Insert G-17(B) Account-Opening Sample]

G-17(C) Account-Opening Sample

[Insert G-17(C) Account-Opening Sample]

G-17(D) Account-Opening Sample

[Insert G-17(D) Account-Opening Sample

G-18(A) Transactions; Interest Charges; and Fees Sample

[Insert G-18(A) Transactions; Interest Charges; and Fees Sample]

G-18(B) Late Payment Fee Sample

Late Payment Warning: If we do not receive your minimum payment by the date listed 

above, you may have to pay a $35 late fee and your APRs may be increased up to the 

Penalty APR of 28.99%.

G-18(C) Actual Repayment Period Sample Disclosure on Periodic Statement

(a) When Zero or Negative Amortization Does Not Occur

Minimum Payment Warning: If you make only the minimum payment on time each 

month and no other amounts are added to the balance, we estimate that it will take you 

approximately 13 months to pay off the balance shown on this statement.

(b) When Zero or Negative Amortization Occurs

Minimum Payment Warning: You will never pay off the outstanding balance shown 

on this statement if you only pay the minimum payment.

G-18(D) New Balance, Due Date, Late Payment and Minimum Payment Sample (Credit 

Card)
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[Insert G-18(D) New Balance, Due Date, Late Payment and Minimum Payment Sample

(Credit Card)]

G-18(E) New Balance, Due Date, and Late Payment Sample (Open-end Plans (Noncredit-card Accounts))

[Insert G-18(E) New Balance, Due Date, and Late Payment Sample (Open-end Plans 

(Non-credit-card Accounts))]

G-18(F) Periodic Statement Form

[Insert G-18(F) Periodic Statement Form]

G-18(G) Periodic Statement Form

[Insert G-18(G) Periodic Statement Form]

G-19 Checks that Access a Credit Card Account Sample

[Insert G-19 Checks that Access a Credit Card Account Sample]

G-20 Change-in-Terms Sample

[Insert G-20 Change-in-Terms Sample]

G-21 Penalty Rate Increase Sample

[Insert G-21 Penalty Rate Increase Sample]

22. Appendix H to part 226 is amended by revising the table of contents, and 

adding new forms H-17(A) and H-17(B).

APPENDIX H TO PART 226—CLOSED-END MODEL FORMS AND CLAUSES

H-1 Credit Sale Model Form (§ 226.18)

H-2 Loan Model Form (§ 226.18)

H-3 Amount Financed Itemization Model Form (§ 226.18(c))

H-4(A) Variable-Rate Model Clauses (§ 226.18(f)(1))
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H-4(B) Variable-Rate Model Clauses (§ 226.18(f)(2))

H-4(C) Variable-Rate Model Clauses (§ 226.19(b))

H-4(D) Variable-Rate Model Clauses (§ 226.20(c))

H-5 Demand Feature Model Clauses (§ 226.18(i))

H-6 Assumption Policy Model Clause (§ 226.18(q))

H-7 Required Deposit Model Clause (§ 226.18(r))

H-8 Rescission Model Form (General) (§ 226.23)

H-9 Rescission Model Form (Refinancing (with Original Creditor)) (§ 226.23)

H-10 Credit Sale Sample

H-11 Installment Loan Sample

H-12 Refinancing Sample

H-13 Mortgage with Demand Feature Sample

H-14 Variable-Rate Mortgage Sample (§ 226.19(b))

H-15 Graduated-Payment Mortgage Sample

H-16 Mortgage Sample

H-17(A) Debt Suspension Model Clause

H-17(B) Debt Suspension Sample

* * * * *

H-17(A) Debt Suspension Model Clause

Please enroll me in the optional [insert name of program], and bill my account the fee of 

[insert charge for the initial term of coverage]. I understand that enrollment is not 

required to obtain credit. I also understand that depending on the event, the protection 

may only temporarily suspend my duty to make minimum payments, not reduce the 
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134

balance I owe. I understand that my balance will actually grow during the suspension 

period as interest continues to accumulate.

[To Enroll, Sign Here]/[To Enroll, Initial Here]. X ____________________ 

H-17(B) Debt Suspension Sample

Please enroll me in the optional [name of program], and bill my account the fee of 

$200.00. I understand that enrollment is not required to obtain credit. I also understand 

that depending on the event, the protection may only temporarily suspend my duty to 

make minimum payments, not reduce the balance I owe. I understand that my balance 

will actually grow during the suspension period as interest continues to accumulate. 

To Enroll, Initial Here. X ____________________ 

23. New appendix M1, appendix M2, and appendix M3 to part 226 are added to 

read as follows:

APPENDIX M1 TO PART 226—GENERIC REPAYMENT ESTIMATES 

(a) Calculating generic repayment estimates. 

(1) Definitions. (i) “Retail credit card” means a credit card that is issued by a 

retailer that can be used only in transactions with the retailer or a group of retailers that 

are related by common ownership or control, or a credit card where a retailer arranges for 

a creditor to offer open-end credit under a plan that allows the consumer to use the credit 

only in transactions with the retailer or a group of retailers that are related by common 

ownership or control.

(ii) “General purpose credit card” means a credit card other than a retail credit 

card.

 (2) Minimum payment formula.
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 (i) Issuer-operated toll-free telephone number.

 (A) General purpose credit cards. (1) When calculating the generic repayment 

estimate for general purpose credit cards, a card issuer must use the minimum payment 

formula that applies to most of its general purpose consumer credit card accounts. The 

issuer must use this “most common” formula to calculate the generic repayment estimate 

for all of its general purpose credit card accounts, regardless of whether this formula 

applies to a particular account. To calculate which minimum payment formula is most 

common, card issuers must choose a day in the last six months, consider all general 

purpose consumer credit card accounts held by the issuer on that day, and determine 

which formula applies to the most accounts. In considering all general purpose credit 

card accounts, a creditor may use a statistical sample of its general purpose consumer 

credit card accounts developed and validated using accepted statistical principles and 

methodology. In choosing which formula is the “most common,” the issuer may ignore 

differences among the formulas related to whether past due amounts or over-thecredit-limit amounts are included in the formula for calculating the minimum payment.

(2) If more than one minimum payment formula applies to an account, the card 

issuer must use the formula applicable to the general-revolving feature that applies to 

new transactions to determine which formula is most common. In addition, if more than 

one minimum payment formula applies to an account, when calculating the generic 

repayment estimate, the issuer must use the “most common” minimum payment formula 

applicable to the general revolving feature identified above and apply it to the entire 

balance on the account as described in paragraph (a)(4) of this appendix, regardless of 

whether this formula applies to a particular balance on that account. For example, 
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assume for all of its accounts, an issuer uses one minimum payment formula to calculate 

the minimum payment amount for balances existing before January 1, 2009, and uses a 

different minimum payment formula to calculate the minimum payment amount for 

balances incurred on or after January 1, 2009. To calculate the minimum payment 

amount, this creditor must use the minimum payment formula applicable to balances 

incurred on or after January 1, 2009, and apply that formula to the entire outstanding 

balance. 

(3) Card issuers must re-evaluate which minimum payment formula is most 

common at least every 12 months. For example, assume a card issuer is required to 

comply with the requirements in § 226.7(b)(12) and this appendix by July 5 of a 

particular year. The issuer may choose any day between January 5 and July 4 of that year 

to use in deciding the minimum payment formula that is most common. For the 

following and each subsequent year, the issuer must again choose a day between 

January 5 and July 4 to determine the minimum payment formula that is most common, 

but the day that is chosen need not be the same day chosen the previous year. At the 

issuer’s option, the issuer may re-evaluate which minimum payment formula is most 

common more often than every 12 months. In the example above, if the issuer changed 

the minimum formula that applies to most of its credit card accounts on October 1 of a 

particular year, the issuer could change the minimum payment formula used to calculate 

the generic repayment estimates on October 1. For the following and each subsequent 

year, the issuer may either continue to evaluate which minimum payment formula is the 

most common during the January 5 to July 4 timeframe, or may switch to choosing any 
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day in the six months prior to October 1 of a particular year to evaluate which minimum 

payment formula is most common.

(B) Retail credit cards. (1) When calculating the generic repayment estimate for 

retail credit cards, card issuers must use the minimum payment formula that applies to 

most of their retail consumer credit card accounts. If an issuer offers credit card accounts 

on behalf of more than one retailer, the card issuer must group credit card accounts for 

each retailer separately, and determine the minimum payment formula that is most 

common to each retailer. The issuer must use the “most common” formula for each 

retailer, regardless of whether this formula applies to a particular account for that retailer. 

To calculate which minimum payment formula is most common, card issuers must 

choose a day in the last six months, consider all retail consumer credit card accounts for 

each retailer held by the issuer on that day, and determine which formula applies to the 

most accounts for that retailer. In considering all retail purpose credit card accounts, a 

creditor may use a statistical sample of its retail purpose consumer credit card accounts 

developed and validated using accepted statistical principles and methodology In

determining which formula is the “most common,” the issuer may ignore differences 

among the formulas related to whether past due amounts or over-the-credit-limit amounts 

are included in the formula for calculating the minimum payment.

(2) If more than one minimum payment formula applies to an account, the card 

issuer must use the formula applicable to the general revolving feature that applies to new 

transactions to determine which formula is most common for each retailer. In addition, if 

more than one minimum payment formula applies to an account, when calculating the 

generic repayment estimate, the issuer must use the “most common” minimum payment 
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formula applicable to the general revolving feature identified above for each retailer and 

apply it to the entire balance on the account as described in paragraph (a)(4) of this 

appendix, regardless of whether this formula applies to a particular balance on that 

account. For example, assume for all of its accounts, a creditor uses the following 

minimum payment formulas: (1) a minimum payment formula applicable to a general 

revolving feature that applies to balances existing before January 1, 2009; (2) a minimum 

payment formula applicable to a general revolving feature that applies to balances 

incurred on or after January 1, 2009; and (3) a minimum payment formula applicable to 

special purchases, such as “club plan purchases.” To calculate the minimum payment 

amount, this creditor must use the minimum payment formula applicable to the general 

revolving feature that applies to balances incurred on or after January 1, 2009, and apply 

that formula to the entire outstanding balance. 

(3) Card issuers must re-evaluate which minimum payment formula is most 

common for retail credit card accounts with respect to each retailer at least every 12 

months. For example, assume a card issuer is required to comply with the requirements 

in § 226.7(b)(12) and this appendix by July 5 of a particular year. The issuer may choose 

any day between January 5 and July 4 of that year to determine the minimum payment 

formula that is most common. For the following year, the issuer must again choose a day 

between January 5 and July 4 to determine the minimum payment formula that is most 

common, but the day that is chosen need not be the same day chosen the previous year. 

At the issuer’s option, the issuer may re-evaluate which minimum payment formula is 

most common more often than every 12 months. In the example above, if the issuer 

changed the minimum formula that applies to most of its credit card accounts on October
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1 of a particular year, the issuer could change the minimum payment formula used to 

calculate the generic repayment estimates on October 1. For the following and each 

subsequent year, the issuer may either continue to evaluate which minimum payment 

formula is the most common during the January 5 to July 4 timeframe, or may switch to 

choosing any day in the six months prior to October 1 of a particular year to evaluate 

which minimum payment formula is most common.

 (ii) FTC-operated toll-free telephone number. When calculating the generic 

repayment estimate, the FTC must use the following minimum payment formula: 

5 percent of the outstanding balance, or $15, whichever is greater. 

 (3) Annual percentage rate. When calculating the generic repayment estimate, 

credit card issuers and the FTC must use the highest annual percentage rate on which the 

consumer has outstanding balances. An issuer and the FTC may use an automated 

system to prompt the consumer to enter the highest annual percentage rate on which the 

consumer has an outstanding balance, and calculate the generic repayment estimate based 

on the consumer’s response. 

 (4) Beginning balance. When calculating the generic repayment estimate, credit 

card issuers and the FTC must use as the beginning balance the outstanding balance on a 

consumer’s account as of the closing date of the last billing cycle. An issuer and the FTC 

may use an automated system to prompt the consumer to enter the outstanding balance 

included on the last periodic statement received by the consumer, and calculate the 

generic repayment estimate based on the consumer’s response. When calculating the 

generic repayment estimate, credit card issuers and the FTC may round the beginning 
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balance as described above to the nearest whole dollar or prompt the consumer to enter 

that balance rounded to the nearest whole dollar.

 (5) Assumptions. When calculating the generic repayment estimate, credit card 

issuers for each of the terms below, may either make the following assumption about that 

term, or use the account term that applies to a consumer’s account. 

(i) Only minimum monthly payments are made each month. In addition, 

minimum monthly payments are made each month – for example, a debt cancellation or 

suspension agreement, or skip payment feature does not apply to the account. 

(ii) No additional extensions of credit are obtained, such as new purchases, 

transactions, fees, charges or other activity. No refunds or rebates are given.

 (iii) The annual percentage rate described in paragraph (a)(3) of this appendix will 

not change, through either the operation of a variable rate or the change to a rate. For 

example, if a penalty annual percentage rate currently applies to a consumer’s account, an 

issuer may assume that the penalty annual percentage rate will apply to the consumer’s 

account indefinitely, even if the consumer may potentially return to a non-penalty annual 

percentage rate in the future under the account agreement. 

(iv) There is no grace period.

 (v) The final payment pays the account in full (i.e., there is no residual interest 

after the final month in a series of payments).

(vi) The average daily balance method is used to calculate the balance.

(vii) All months are the same length and leap year is ignored. A monthly or daily 

periodic rate may be assumed. If a daily periodic rate is assumed, the issuer may either 
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assume (1) a year is 365 days long, and all months are 30.41667 days long, or (2) a year 

is 360 days long, and all months are 30 days long. 

(viii) Payments are credited on the last day of the month.

(ix) The account is not past due and the account balance does not exceed the 

credit limit.

(x) When calculating the generic repayment estimate, the assumed payments, 

current balance and interest charges for each month may be rounded to the nearest cent, 

as shown in appendix M3 to this part.

(6) Tolerance. A generic repayment estimate shall be considered accurate if it is 

not more than 2 months above or below the generic repayment estimate determined in 

accordance with the guidance in this appendix (prior to rounding described in paragraph 

(b)(1)(i) of this appendix). For example, assume the generic repayment estimate 

calculated using the guidance in this appendix is 28 months (2 years, 4 months), and the 

generic repayment estimate calculated by the issuer or the FTC is 30 months (2 years, 6 

months). The generic repayment estimate should be disclosed as 2 years, due to the 

rounding rule set forth in paragraph (b)(1)(i) of this appendix. Nonetheless, based on the 

30 month estimate, the issuer or FTC disclosed 3 years, based on that rounding rule. The 

issuer and the FTC would be in compliance with this guidance by disclosing 3 years, 

instead of 2 years, because the issuer’s or FTC’s estimate is within the 2 months’

tolerance, prior to rounding. In addition, even if an issuer’s or FTC’s estimate is more 

than 2 months above or below the generic repayment estimate calculated using the 

guidance in this appendix, so long as the issuer or FTC discloses the correct number of 

years to the consumer based on the rounding rule set forth in paragraph (b)(1)(i) of this 
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appendix, the issuer or the FTC would be in compliance with this guidance. For 

example, assume the generic repayment estimate calculated using the guidance in this 

appendix is 32 months (2 years, 8 months), and the generic repayment estimate calculated 

by the issuer or the FTC is 38 months (3 years, 2 months). Under the rounding rule set 

forth in paragraph (b)(1)(i) of this appendix, both of these estimates would be rounded 

and disclosed to the consumer as 3 years. Thus, if the issuer or the FTC disclosed 3 years 

to the consumer, the issuer or the FTC would be in compliance with this guidance even 

though the generic repayment estimate calculated by the issuer or the FTC is outside the 

2 months’ tolerance amount. 

(b) Disclosing the generic repayment estimate to consumers.

(1) Required disclosures. Except as provided in paragraph (b)(3) of this 

appendix, when responding to a request for generic repayment estimates through a tollfree telephone number, credit card issuers and the FTC must make the following 

disclosures:

(i) The generic repayment estimate. If the generic repayment estimate calculated 

above is less than 2 years, credit card issuers and the FTC must disclose the estimate in 

months. Otherwise, the estimate must be disclosed in years. The estimate must be 

rounded down to the nearest whole year if the estimate contains a fractional year less than 

0.5, and rounded up to the nearest whole year if the estimate contains a fractional year 

equal to or greater than 0.5. 

(ii) The beginning balance on which the generic repayment estimate is calculated.

(iii) The annual percentage rate on which the generic repayment estimate is 

calculated.
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 (iv) The assumption that only minimum payments are made and no other 

amounts are added to the balance.

 (v) The fact that the repayment period is an estimate, and the actual time it may 

take to pay off the balance by only making minimum payments will differ based on the 

consumer’s account terms and future account activity.

 (vi) At the issuer’s or the FTC’s option, a description of the minimum payment 

formula(s) or the minimum payment amounts used to calculate the generic repayment 

estimate, including a disclosure of the dollar amount of the minimum payment calculated 

for the first month.

(vii) At the issuer’s or the FTC’s option, the total amount of interest that a 

consumer would pay if the consumer makes minimum payments for the length of time 

disclosed in the generic repayment estimate.

 (2) Model language. Credit card issuers and the FTC may use the following 

disclosure to meet the requirements set forth in paragraph (b)(1) of this appendix as 

applicable:

It will take approximately ---- [months/years] to pay off a balance of $ ---- with an 

APR of ----%, if you make only the minimum payment on time each month and no other 

amounts are added to the balance. This estimate is based on the information you 

provided and assumptions about your account. The actual time it may take you to pay off 

this balance by only making minimum payments will differ based on the terms of your 

account and future account activity.

 (3) Zero or negative amortization. If zero or negative amortization occurs when 

calculating the generic repayment estimate, credit card issuers and the FTC must disclose 
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to the consumer that based on the information provided by the consumer and assumptions 

used to calculate the generic repayment estimate, the issuer or FTC estimates that 

consumer will never pay off the balance by paying only the minimum payment. Card 

issuers and the FTC may use the following disclosure to meet the requirements set forth 

in this paragraph, as applicable: “Based on the information you provided and 

assumptions that we used to calculate the time to repay your balance, we estimate that 

you will never pay off your credit card balance if you only make the minimum payment

because your payment is less than the interest charged each month.”

(4) Permissible disclosures. Credit card issuers and the FTC may provide the 

following information when responding to a request for the generic repayment estimate 

through a toll-free telephone number, so long as the following information is provided 

after the disclosures in paragraph (b)(1) of this appendix are given:

(i) A description of the assumptions used to calculate the generic repayment 

estimate as described in paragraph (a)(5) of this appendix.

 (ii) The length of time it would take to repay the beginning balance described in 

paragraph (b)(1)(ii) of this appendix if an additional amount was paid each month in 

addition to the minimum payment amount, allowing the consumer to select the additional 

amount. In calculating this estimate, card issuers and the FTC must use the same terms 

described in paragraph (a) of this appendix, except they must assume the additional 

amount was paid each month in addition to the minimum payment amount.

 (iii) The length of time it would take to repay the beginning balance described in 

paragraph (b)(1)(ii) of this appendix if the consumer made a fixed payment amount each 

month, allowing the consumer to select the amount of the fixed payment. For example, 
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an issuer or the FTC could prompt the consumer to enter in a payment amount in whole 

dollars (e.g., $50) and disclose to the consumer how long it would take to repay the 

beginning balance if the consumer made that payment each month. In calculating this 

estimate, card issuers and the FTC must use the same terms described in paragraph (a) of 

this appendix, except they must assume the consumer made a fixed payment amount each 

month.

 (iv) The monthly payment amount that would be required to pay off the 

beginning balance described in paragraph (b)(1)(ii) of this appendix within a specific 

number of months or years, allowing the consumer to select the payoff period. For 

example, an issuer or the FTC could prompt the consumer to enter in the number of years 

to repay the beginning balance, and disclose to the consumer the monthly payment 

amount that the consumer would need to pay each month in order to repay the balance in 

that number of years. In calculating the monthly payment amount, card issuers and the 

FTC must use the same terms described in paragraph (a) of this appendix, as appropriate.

 (v) Reference to Web-based calculation tools that permit consumers to obtain 

additional estimates of repayment periods. 

 (vi) The total amount of interest that a consumer may pay under repayment 

options described in paragraphs (b)(4)(ii), (iii) or (iv).

APPENDIX M2 TO PART 226—ACTUAL REPAYMENT DISCLOSURES

(a) Calculating actual repayment disclosures.

 (1) Definitions. (i) “Retail credit card” means a credit card that is issued by a 

retailer that can be used only in transactions with the retailer or a group of retailers that 

are related by common ownership or control, or a credit card where a retailer arranges for 
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a creditor to offer open-end credit under a plan that allows the consumer to use the credit 

only in transactions with the retailer or a group of retailers that are related by common 

ownership or control.

 (ii) “General purpose credit card” means a credit card other than a retail credit 

card.

 (iii) “Promotional terms” means terms of a cardholder’s account that will expire 

in a fixed period of time, as set forth by the card issuer.

 (2) Minimum payment formulas. When calculating the actual repayment

disclosure, credit card issuers must use the minimum payment formula(s) that apply to a 

cardholder’s account. If more than one minimum payment formula applies to an account, 

the issuer must apply each minimum payment formula to the portion of the balance to 

which the formula applies. If any promotional terms related to payments apply to a 

cardholder’s account, such as a deferred billing plan where minimum payments are not 

required for 12 months, credit card issuers may assume no promotional terms apply to the 

account. 

 (3) Annual percentage rate. When calculating the actual repayment disclosure, a 

credit card issuer must use the annual percentage rates that apply to a cardholder’s 

account, based on the portion of the balance to which the rate applies. If any promotional 

terms related to annual percentage rates apply to a cardholder’s account, such as 

introductory rates or deferred interest plans, credit card issuers may assume no 

promotional terms apply to the account. 

 (4) Beginning balance. When calculating the actual repayment disclosure, credit 

card issuers must use as the beginning balance the outstanding balance on a consumer’s 
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account as of the closing date of the last billing cycle. When calculating the actual 

repayment disclosure, credit card issuers may round the beginning balance as described 

above to the nearest whole dollar.

 (5) Assumptions. When calculating the actual repayment disclosure, credit card 

issuers and the FTC for each of the terms below, may either make the following 

assumption about that term, or use the account term that applies to a consumer’s account. 

 (i) Only minimum monthly payments are made each month. In addition, 

minimum monthly payments are made each month – for example, a debt cancellation or 

suspension agreement, or skip payment feature does not apply to the account.

 (ii) No additional extensions of credit are obtained, such as new purchases, 

transactions, fees, charges or other activity. No refunds or rebates are given.

 (iii) The annual percentage rate or rates that apply to a cardholder’s account will 

not change, through either the operation of a variable rate or the change to a rate. For 

example, if a penalty annual percentage rate currently applies to a consumer’s account, an 

issuer may assume that the penalty annual percentage rate will apply to the consumer’s 

account indefinitely, even if the consumer may potentially return to a non-penalty annual 

percentage rate in the future under the account agreement. 

 (iv) There is no grace period.

 (v) The final payment pays the account in full (i.e., there is no residual finance 

charge after the final month in a series of payments).

 (vi) The average daily balance method is used to calculate the balance.

 (vii) All months are the same length and leap year is ignored. A monthly or daily 

periodic rate may be assumed. If a daily periodic rate is assumed, the issuer may either 
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assume (1) a year is 365 days long, and all months are 30.41667 days long, or (2) a year 

is 360 days long, and all months are 30 days long. 

 (viii) Payments are credited on the last day of the month.

 (ix) Payments are allocated to lower annual percentage rate balances before 

higher annual percentage rate balances.

 (x) The account is not past due and the account balance does not exceed the 

credit limit.

(xi) When calculating the actual repayment estimate, the assumed payments, 

current balance and interest charges for each month may be rounded to the nearest cent,

as shown in appendix M3 to this part.

 (6) Tolerance. An actual repayment disclosure shall be considered accurate if it 

is not more than 2 months above or below the actual repayment disclosure determined in 

accordance with the guidance in this appendix (prior to rounding described in paragraph 

(b)(1)(i) of this appendix). For example, assume the actual repayment estimate calculated 

using the guidance in this appendix is 28 months (2 years, 4 months), and the actual 

repayment estimate calculated by the issuer is 30 months (2 years, 6 months). The actual 

repayment estimate should be disclosed as 2 years, due to the rounding rule set forth in 

paragraph (b)(1)(i) of this appendix. Nonetheless, based on the 30 month estimate, the 

issuer disclosed 3 years, based on that rounding rule. The issuer would be in compliance 

with this guidance by disclosing 3 years, instead of 2 years, because the issuer’s estimate 

is within the 2 months’ tolerance, prior to rounding. In addition, even if an issuer’s 

estimate is more than 2 months above or below the actual repayment estimate calculated 

using the guidance in this appendix, so long as the issuer discloses the correct number of 
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years to the consumer based on the rounding rule set forth in paragraph (b)(1)(i) of this 

appendix, the issuer would be in compliance with this guidance. For example, assume 

the actual repayment estimate calculated using the guidance in this appendix is 32 months

(2 years, 8 months), and the actual repayment estimate calculated by the issuer is 38 

months (3 years, 2 months). Under the rounding rule set forth in paragraph (b)(1)(i) of 

this appendix, both of these estimates would be rounded and disclosed to the consumer as

3 years. Thus, if the issuer disclosed 3 years to the consumer, the issuer would be in 

compliance with this guidance even though the actual repayment estimate calculated by 

the issuer is outside the 2 months’ tolerance amount. 

 (b) Disclosing the actual repayment disclosure to consumers through a toll-free 

telephone number.

 (1) Required disclosures. Except as provided in paragraph (b)(3) of this 

appendix, when responding to a request for actual repayment disclosures through a tollfree telephone number, credit card issuers must make the following disclosures:

 (i) The actual repayment disclosure. If the actual repayment disclosure is less 

than 2 years, credit card issuers must disclose the estimate in months. Otherwise, the 

estimate must be disclosed in years. The estimate must be rounded down to the nearest 

whole year if the estimate contains a fractional year less than 0.5, and rounded up to the 

nearest whole year if the estimate contains a fractional year equal or greater than 0.5. If 

more than one minimum payment formula applies to an account, when calculating the 

actual repayment period, the issuer must apply each minimum payment formula to the 

portion of the balance to which the formula applies. The issuer may either disclose the 

longest repayment period calculated, or the repayment period calculated for each 
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minimum payment formula. For example, assume that an issuer uses one minimum 

payment formula to calculate the minimum payment amount for a general revolving 

feature, and another minimum payment formula to calculate the minimum payment 

amount for special purchases, such as a “club plan purchase.” Also, assume that based on 

a consumer’s balances in these features and the annual percentage rates that apply to such 

features, that the repayment period calculated pursuant to this appendix for the general 

revolving feature is 5 years, while the repayment period calculated for the special 

purchase feature is 3 years. This issuer may either disclose 5 years as the repayment 

period for the entire balance to the consumer, or disclose 5 years as the repayment period 

for the balance in the general revolving feature and 3 years as the repayment period for 

the balance in the special purchase feature.

 (ii) The beginning balance on which the actual repayment disclosure is 

calculated.

 (iii) The assumption that only minimum payments are made and no other 

amounts are added to the balance.

 (iv) The fact that the repayment period is an estimate, and is based on several 

assumptions about the consumer’s account terms and future activity.

 (v) At the issuer’s option, a description of the minimum payment formula(s) or 

the minimum payment amounts used to calculate the actual repayment disclosure, 

including a disclosure of the dollar amount of the minimum payment calculated for the 

first month.
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(vi) At the issuer’s option, the total amount of interest that a consumer would pay 

if the consumer makes minimum payments for the length of time disclosed in the actual 

repayment disclosure.

 (2) Model language. Credit card issuers may use the following disclosure to 

meet the requirements set forth in paragraph (b)(1) of this appendix:

 Your outstanding balance as of the last billing statement was $------. If you make 

only the minimum payment on time each month and no other amounts are added to your 

balance, we estimate that it would take approximately ------ [months/years] to pay off this 

balance. This estimate is based on several assumptions about the terms of your account 

and future account activity.

 (3) Zero or negative amortization. If zero or negative amortization occurs when 

calculating the repayment estimate, credit card issuers must disclose to the consumer that 

based on the current terms applicable to the consumer’s account and on assumptions used 

to calculate the repayment estimate, the issuer estimates that the consumer will never pay 

off the balance by paying only the minimum payment. Card issuers may use the 

following disclosure to meet the requirements set forth in this paragraph, as applicable: 

“Your outstanding balance as of the last billing statement was $------. Based on the 

current terms applicable to your account and on assumptions that we used to calculate the 

time to repay your balance, we estimate that you will never pay off your credit card

balance if you only make the minimum payment because your payment is less than the 

interest charged each month.”

 (4) Permissible disclosures. Credit card issuers may provide the following 

information when responding to a request for the actual repayment disclosure through a 
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toll-free telephone number, so long as the following information is provided after the 

disclosures in paragraph (b)(1) of this appendix are given:

 (i) A description of the assumptions used to calculate the actual repayment 

disclosure as described in paragraph (a)(5) of this appendix.

 (ii) The length of time it would take to repay the beginning balance described in 

paragraph (b)(1)(ii) of this appendix if an additional amount was paid each month in 

addition to the minimum payment amount, allowing the consumer to select the additional 

amount. In calculating this estimate, credit card issuers must use the same terms 

described in paragraph (a) of this appendix used to calculate the actual repayment 

disclosure, except they must assume the additional amount was paid each month in 

addition to the minimum payment amount.

 (iii) The length of time it would take to repay the beginning balance described in 

paragraph (b)(1)(ii) of this appendix if the consumer made a fixed payment amount each

month, allowing the consumer to select the amount of the fixed payment. For example, 

an issuer could prompt the consumer to enter in a payment amount in whole dollars (e.g., 

$50) and disclose to the consumer how long it would take to repay the beginning balance 

if the consumer made that payment each month. In calculating this estimate, card issuers 

must use the same terms described in paragraph (a) of this appendix to calculate the 

actual repayment disclosure, except they must assume the consumer made a fixed 

payment amount each month.

 (iv) The monthly payment amount that would be required to pay off the 

beginning balance described in paragraph (b)(1)(ii) of this appendix within a specific 

number of months or years, allowing the consumer to select the payoff period. For 
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example, an issuer could prompt the consumer to enter in the number of years to repay 

the beginning balance, and disclose to the consumer the monthly payment amount that 

the consumer would need to pay each month in order to repay the balance in that number 

of years. In calculating the monthly payment amount, card issuers must use the same 

terms described in paragraph (a) of this appendix, as appropriate.

 (v) Reference to Web-based calculation tools that permit consumers to obtain 

additional estimates of repayment periods.

 (vi) The total amount of interest that a consumer may pay under repayment 

options described in paragraph (b)(4)(ii), (iii) or (iv) of this appendix.

 (c) Disclosing the actual repayment disclosures on periodic statements.

 (1) Required disclosures. Except as provided in paragraph (c)(3) of this 

appendix, when providing the actual repayment disclosure on the periodic statement, 

credit card issuers must make the following disclosures:

 (i) The actual repayment disclosure. If the actual repayment disclosure is less 

than 2 years, credit card issuers must disclose the estimate in months. Otherwise, the 

estimate must be disclosed in years. The estimate must be rounded down to the nearest

whole year if the estimate contains a fractional year less than 0.5, and rounded up to the 

nearest whole year if the estimate contains a fractional year equal to or greater than 0.5.

 (ii) The fact that the repayment period is based on the current outstanding balance 

shown on the periodic statement.

 (iii) The assumption that only minimum payments are made and no other amounts 

are added to the balance.
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 (iv) At the issuer’s option, a description of the minimum payment formula(s) or 

the minimum payment amounts used to calculate the generic repayment estimate, 

including a disclosure of the dollar amount of the minimum payment calculated for the 

first month.

(v) At the issuer’s option, the total amount of interest that a consumer would pay 

if the consumer makes minimum payments for the length of time disclosed in the actual 

repayment disclosure.

 (2) Model form. Credit card issuers may use the disclosure in Sample G-18(C) in 

appendix G to this part to meet the requirements set forth in paragraph (c)(1) of this 

appendix.

 (3) Zero or negative amortization. If zero or negative amortization occurs when 

calculating the actual repayment disclosure, credit card issuers must disclose to the 

consumer that the issuer estimates that the consumer will never pay off the balance by 

making only the minimum payment. Card issuers may use the disclosure in Sample G18(C) in appendix G to this part to meet the requirements set forth in this paragraph.

 (4) Permissible disclosures. Card issuers may provide the following information 

on the periodic statement, so long as the following information is provided after the 

disclosures in paragraph (c)(1) of this appendix are given:

 (i) The fact that the repayment period is an estimate, and is based on several 

assumptions about the consumer’s account terms and future activity.

 (ii) A reference to another location on the statement where the consumer may 

find additional information about the actual repayment disclosure.
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 (iii) A description of the assumptions used to calculate the actual repayment 

disclosure as described in paragraph (a)(5) of this appendix.

 (iv) The length of time it would take to repay the outstanding balance shown on 

the statement if an additional amount was paid each month in addition to the minimum 

payment amount. Card issuers may choose the additional amount. In calculating this 

estimate, card issuers must use the same terms described in paragraph (a) of this appendix 

used to calculate the actual repayment disclosure, except they must assume the additional 

amount was paid each month in addition to the minimum payment amount.

 (v) The length of time it would take to repay the outstanding balance shown on 

the statement if the consumer made a fixed payment amount each month. Card issuers 

may choose the amount of the fixed payment. In calculating this estimate, card issuers 

must use the same terms described in paragraph (a) of this appendix used to calculate the 

actual repayment disclosure, except they must assume the consumer made a fixed 

payment amount each month.

 (vi) The monthly payment amount that would be required to pay off the 

outstanding balance shown on the statement within a specific number of months or years. 

Card issuers may choose the specific number of months or years used in the calculation. 

In calculating the monthly payment amount, card issuers must use the same terms 

described in paragraph (a) of this appendix, as appropriate.

 (vii) Reference to Web-based calculation tools that permit consumers to obtain 

additional estimates of repayment periods.

 (viii) The total amount of interest that a consumer may pay under repayment 

options described in paragraphs (c)(4)(iv), (v) or (vi) of this appendix.
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APPENDIX M3 TO PART 226—SAMPLE CALCULATIONS OF GENERIC REPAYMENT 

ESTIMATES AND ACTUAL REPAYMENT DISCLOSURES

(a) Generic repayment estimates. The following is an example of how to 

calculate the generic repayment estimates using the guidance in appendix M1 to this part

where the annual percentage rate is 17 percent, the outstanding balance is $1,000, and the 

minimum payment formula is 2 percent of the outstanding balance or $20, whichever is 

greater. The following calculation is written in SAS code.

data one; 

* inputs; 

 

* annual percentage rate; apr=0.17; 

 

perrate=(apr/12); * calculate monthly periodic rate;

*perrate = ((1+(apr/365))**30.41667)-1; *this formula would be used if a daily 

periodic rate is assumed, and a 365 day year is used with 30.41667 days per month; 

 

* outstanding balance; cbal=1000; 

* dollar minimum payment; dmin=20; 

* percent minimum payment; pmin=0.02; 

 

 

* initialize counter for months; 

month=0; 

 

 

eins: 

month=month+1; * increment month counter; 

pmt=round(pmin*cbal,0.01); * calculate payment as percentage of balance; 

 

if pmt lt dmin then pmt=dmin; * set dollar minimum payment; 

xxxbal=round(cbal*(1+perrate),0.01); 

if pmt gt xxxbal then 

 pmt=xxxbal; * set final payment amount; 

 

fc=round(cbal*perrate,0.01); * calculate interest charge; 

prpmt=pmt-fc; * calculate principal payment; 

 

* print month, balance, payment amount, interest charge, and principal payment; 
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put month= cbal= pmt= fc= prpmt= ; 

 

 

cbal=round(cbal-prpmt,0.01); * deduct principal payment from balance; 

 

if cbal gt 0 then go to eins; * go to next month if balance is greater than zero; 

* print number of months to repay debt, final balance (zero), 

 periodic rate; 

put title=' '; 

put title='number of months to repay debt, final balance, periodic rate'; 

put month= cbal= perrate=; 

put title=' '; 

run; 

(b) Actual Repayment Disclosures. The following is an example of how to 

calculate the actual repayment disclosures using the guidance in appendix M2 to this part

where three annual percentage rates apply, the total outstanding balance is $1000, and the 

minimum payment formula is 2 percent of the outstanding balance or $20, whichever is 

greater. The following calculation is written in SAS code.

data one; 

*initialize numbers of APRs, periodic rates, balance and periodic interest charges;

array apr(3);

array perrate(3);

array cbal(3);

array fc(3);

* inputs; 

 

*initialize APRs, and balances, placing rates from lowest to highest; 

 

*annual percentage rates from lowest to highest; 

apr1=0.019; 

apr2=0.17;

apr3=0.21; 

cbal1=500; * outstanding balance associated with apr1; 

cbal2=250; * outstanding balance associated with apr2; 
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cbal3=250; * outstanding balance associated with apr3; 

 

dmin=20; * dollar minimum payment; 

pmin=0.02; * percent minimum payment; 

* initialize counter for months and total balance; 

month=0; 

tbal = 0; 

*calculate periodic rates and initial total balance; 

do I=1 to 3;

perrate(I)=(apr(I)/12); * calculate monthly periodic rate;

*the following formula would be used if a daily periodic rate is assumed, and a 365 day 

year is used with 30.41667 days per month; 

*perrate = ((1+(apr(I)/365))**30.41667)-1; 

tbal= tbal+cbal(I);

end; 

*calculate months to pay off for lowest rate balance;

do while (cbal(1) gt 0);

 month = month+1; 

 pmt= round(pmin*tbal,.01); *calculate payment as percentage of balance;

 if pmt lt dmin then pmt=dmin; * set dollar minimum payment;

 do I=1 to 3; 

 fc(I)= round (cbal(I)*perrate(I), 0.01); *calculate interest charges;

 end;

 do I=1 to 3; 

 cbal(I)=cbal(I)+fc(I); tbal=tbal+fc(I); *add interest charges to balances; 

 end;

 

 cbal(1)=cbal(1)-pmt; *applying payment to lowest APR balance; 

 tbal = tbal-pmt;

end;

*calculate months to pay off for next lowest rate balance, if any, carrying over number 

from lower rate balance; 

cbal(2)=cbal(2)+cbal(1);
DRAFT

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do while (cbal(2) gt 0);

 month=month+1;

 pmt=round (pmin*tbal, 0.01); *calculate payment as percentage of balance;

 if pmt lt dmin then pmt=dmin; * set dollar minimum payment;

 do I=2 TO 3; 

 fc(I)=round (cbal(I)*perrate(I), 0.01); *calculate interest charges;

 end;

 do I=2 TO 3; 

 cbal(I)=cbal(I)+fc(I); tbal=tbal+fc(I); *add interest charges to the balances; 

 end;

 cbal(2)=cbal(2)-pmt; *applying payment to second lowest APR;

 tbal=tbal-pmt;

end;

*calculate months to pay off for next lowest rate balance, if any, carrying over number 

from lower rate balances; 

cbal(3)=cbal(3)+cbal(2);

do while (cbal(3) gt 0);

 month= month+1; 

 pmt=round (pmin*tbal, 0.01); *calculate payment as percentage of balance;

 if pmt lt dmin then pmt=dmin; * set dollar minimum payment;

 fc(3)=round (cbal(3)*perrate(3), 0.01); *calculate interest charge;

 cbal(3)=cbal(3)+fc(3); *add interest charges to balance;

 tbal= tbal+fc(3);

 cbal(3)=cbal(3)-pmt; *applying payment to remaining balance; 

 tbal = tbal-pmt; 

end;

* print number of months to repay debt, final balance (zero), 

periodic rate; 

put title=' '; 

put title='number of months to repay debt, final balance'; 

put month= tbal=; 

put title=' '; run;