2023 Rhode Island General Laws › Title 6 - Commercial Law – General Regulatory Provisions › Chapter 6-26.1 - Credit Card Lending › Section 6-26.1-11. - Amendment of agreement.

§ 6-26.1-11. Amendment of agreement.
(a)
Unless the agreement governing a credit card plan otherwise provides, a credit card lender may at any time and from time to time amend the agreement in any respect, whether or not the amendment or the subject of the amendment was originally contemplated or addressed by the parties or is integral to the relationship between the parties. Without limiting the foregoing, the amendment may change terms by the addition of new terms or by the deletion or modification of existing terms, whether relating to plan benefits or features; the rate or rates of interest; the manner of calculating interest or outstanding unpaid indebtedness; variable schedules or formulas; interest fees and charges; fees; collateral requirements; methods for obtaining or repaying extensions of credit; attorneys’ fees; plan termination; the manner for amending the terms of the agreement; arbitration or other alternative dispute resolution mechanisms; or other matters of any kind whatsoever. Unless the agreement governing a credit card plan otherwise expressly provides, any amendment may, on and after the date upon which it becomes effective as to a particular borrower, apply to all then outstanding, unpaid indebtedness in the borrower’s account under the plan, including any indebtedness that arose prior to the effective date of the amendment. An agreement governing a credit card plan may be amended pursuant to this section regardless of whether the plan is active or inactive or whether additional borrowings are available under it. Any amendment that does not increase the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 may become effective as determined by the credit card lender, subject to compliance by the credit card lender with any applicable notice requirements under the Truth in Lending Act (15 U.S.C. § 1601 et seq.), and the regulations promulgated under it, as in effect from time to time. Any notice of an amendment sent by the credit card lender may be included in the same envelope with a periodic statement or as part of the periodic statement or in other materials sent to the borrower.
(b)(1)
If an amendment increases the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4, the credit card lender shall mail or deliver to the borrower, at least fifteen (15) days before the effective date of the amendment, a clear and conspicuous written notice that shall describe the amendment and shall also set forth the effective date of it and any applicable information required to be disclosed pursuant to the following provisions of this section.
(2)
Any amendment that increases the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 may become effective as to a particular borrower if the borrower does not, within fifteen (15) days of the earlier mailing or delivery of the written notice of the amendment (or any longer period that may be established by the credit card lender), furnish written notice to the credit card lender that the borrower does not agree to accept the amendment. The notice from the credit card lender shall set forth the address to which a borrower may send notice of the borrower’s election not to accept the amendment and shall include a statement that, absent the furnishing of notice to the credit card lender of nonacceptance within the referenced fifteen day (15) time period, the amendment will become effective and apply to the borrower. As a condition to the effectiveness of any notice that a borrower does not accept the amendment, the credit card lender may require the borrower to return to it all credit devices. If, after fifteen (15) days from the mailing or delivery by the credit card lender of a notice of an amendment (or any longer period that may have been established by the credit card lender as referenced above), a borrower uses a plan by making a purchase or obtaining a loan, notwithstanding that the borrower has prior to the use furnished the credit card lender notice that the borrower does not accept an amendment, the amendment may be deemed by the credit card lender to have been accepted and may become effective as to the borrower as of the date that the amendment would have become effective but for the furnishing of notice by the borrower (or as of any later date selected by the credit card lender).
(3)
Any amendment that increases the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 may, in lieu of the procedure referenced in subdivision (2) of this subsection, become effective as to a particular borrower if the borrower uses the plan after a date specified in the written notice of the amendment that is at least fifteen (15) days after the mailing or delivery of the notice (but that need not be the date the amendment becomes effective) by making a purchase or obtaining a loan; provided that the notice from the credit card lender includes a statement that the described usage after the references date will constitute the borrower’s acceptance of the amendment.
(4)
Any borrower who furnishes timely notice electing not to accept an amendment in accordance with the procedures referenced in subdivision (2) of this subsection and who does not subsequently use the plan, or who fails to use the borrower’s plan as referenced in subdivision (3) of this subsection, shall be permitted to pay the outstanding unpaid indebtedness in the borrower’s account under the plan in accordance with the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4 without giving effect to the amendment; provided, however, that the credit card lender may convert the borrower’s account to a closed-end credit account on credit terms substantially similar to those set forth in the then-existing agreement governing the borrower’s plan.
(5)
Notwithstanding the other provisions of this section, no notice required by this section of an amendment of an agreement governing a credit card plan shall be required, and any amendment may become effective as of any date agreed upon between a credit card lender and a borrower, with respect to any amendment that is agreed upon between the credit card lender and the borrower, either orally or in writing.
(c)
For purposes of this section, the following are examples of amendments that shall not be deemed to increase the rate or rates of interest charged by a credit card lender to a borrower under §§ 6-26.1-3 or 6-26.1-4:
(1)
A decrease or increase in the required number or amount of periodic installment payments;
(2)
Any change to a plan that increases the rate or rates in effect immediately prior to the change by less than one-quarter of one percentage point (0.25%) per annum; provided that a credit card lender may not make more than one such change in reliance on this subdivision with respect to a plan within any twelve-month (12) period;
(3)(i)
A change in the schedule or formula used under a variable-rate plan under § 6-26.1-3 that varies the determination date of the applicable rate; the time period for which the applicable rate will apply; or the effective date of any variation of the rate or any other similar change; or
(ii)
Any other change in the schedule or formula used under a variable-rate plan under § 6-26.1-3; provided that the initial interest rate that would result from any change under this subdivision (3), as determined on the effective date of the change or, if the notice of the change is mailed or delivered to the borrower prior to the effective date, as of any date within sixty (60) days before mailing or delivery of the notice, will not be an increase from the rate in effect on the date under the existing schedule or formula.
(4)
A change from a variable-rate plan to a fixed rate, or from a fixed-rate to a variable-rate plan so long as the initial rate that would result from such a change, as determined on the effective date of the change, or if the notice of the change is mailed or delivered to the borrower prior to the effective date, as of any date within sixty (60) days before mailing or delivery of the notice, will not be an increase from the rate in effect on the date under the existing plan;
(5)
A change from a daily periodic rate to a periodic rate other than daily or from a periodic rate other than daily to a daily periodic rate; and
(6)
A change in the method of determining the outstanding unpaid indebtedness upon which interest is calculated (including, without limitation, a change with respect to the date by which, or the time period within which, a new balance or any portion of it must be paid to avoid additional interest).
(d)
The procedures for amendment by a credit card lender of the terms of a plan to which a borrower, other than an individual borrower, is a party may, in lieu of the foregoing provisions of this section, be as the agreement governing the plan may otherwise provide.
History of Section.
P.L. 2003, ch. 237, § 1; P.L. 2014, ch. 528, § 16.