Open-End Credit
General Disclosure Requirements
All disclosures must be:
 “Clear and conspicuous”

Written

In a form the member can keep, except for:
o Credit and charge card applications and solicitations
o Home-equity plan disclosures
o The alternative summary billing-rights statement
o Credit and charge card renewal disclosures
Unknown Information

All disclosures must reflect the terms of the legal obligation between the parties.

If any information necessary for accurate disclosure is unknown at the time the
disclosures are made, the credit union must:
o Make the required disclosure based on the best information available at the
time.
o State clearly that the disclosure is an estimate.
Multiple Applicants

The credit union may provide disclosures to any of the individuals who are
primarily liable on the account.

Separate disclosures and rescission notices must be given to each member who has
a right to rescind.
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Open-End Credit
Specific Formats
Specific formatting rules apply to many open-end credit disclosures:
 Credit and charge card applications and solicitations.

Disclosures for home-equity plans must precede other disclosures and must be
contain specific elements.

Account-opening disclosures for non-HELOC accounts must be provided in a tabular
format.

Disclosures provided on periodic statements must be grouped together in a specific
manner.

Disclosures provided on periodic statements for non-HELOC accounts must follow
certain formatting requirements.

Disclosures accompanying checks that access a credit card account must be
provided in a tabular format.

Disclosures provided in a change-in-terms notice for non-HELOC accounts must be
provided in a tabular format.

Disclosures provided when a rate is increased due to delinquency, default or as a
penalty on non-HELOC accounts must be provided in a tabular format.
Annual Percentage Rate
For most open-end disclosures, the APR is determined by multiplying:
 The periodic rate that can be used to compute the finance charge BY
 The number of periods in the year.
Periodic Statements
There are various methods of determining the APR that applies to periodic statements. The
credit union should refer to Section 1026.14(c) of Regulation Z for guidance.
Accuracy Requirement
An APR disclosed by a credit union is considered accurate if the disclosed rate is not more
than 1/8 of a percentage point above or below the actual APR.
Oral Disclosures
When orally responding to member inquiries concerning the cost of credit, the only rate
that may be stated is the “Annual Percentage Rate” or “APR.”
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Open-End Credit
Exceptions
 The credit union may answer inquiries about open-end credit by stating the periodic
rate, or rates, along with the annual percentage rate.

If the annual percentage rate cannot be determined in advance, the rate for a sample
transaction must be given with other cost information for the member’s specific
transaction.
Account Opening Disclosures

New as of July 1, 2010

The following rules apply to non-HELOC accounts only

Disclosures are required to be provided before the first transaction under the plan
Table
A tabular format with specific headings, content and formatting is required for certain
disclosures.
Bolding
The following terms in the table must be bolded:
 Annual Percentage Rates (the APR for purchases must also be in 16 pt. font)

The following fees:
o Issuance or availability
o Transaction charges
o Cash advance
o Late payment
o Over-the-limit
o Balance transfer
o Returned payment
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Open-End Credit
Do Not Bold
Do not bold the following:
 Fixed finance charges

Minimum interest charges

Any periodic charges that are not annualized
In-Table Disclosures
Disclose the following terms and information within the table
Annual Percentage Rates
 Disclose each periodic rate that may be used to compute the finance charge on an
outstanding balance for purchases, cash advances, or balance transfers, expressed
as an annual percentage rate.

When more than one rate applies for a category of transactions, disclose the range
of balances to which each rate is applicable.
Variable Rates
 For variable rates, disclose the fact that the rate may vary and how the rate is
determined by identifying the type of index or formula that is used in setting the
rate.

Do not disclose the value of the index and the amount of the margin in the table.

Do not disclose limitations on rate increases or decreases in the table.
Introductory Rates
 If the initial rate is an introductory rate, disclose the rate that would otherwise
apply to the account.

You may disclose in the table the introductory rate along with the rate that would
otherwise apply to the account if you also disclose the time period during which the
introductory rate will remain in effect.

You must use the term “introductory” or “intro” in immediate proximity to the
introductory rate

Disclosure of the introductory rate is required for credit cards.
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Open-End Credit
Premium Rates
 If the initial rate is temporary and is higher than the rate that will apply after the
temporary rate expires, you must disclose the premium initial rate.

The premium initial rate for purchases must be in at least 16-point type.

You may disclose in the table the rate that will apply after the premium initial rate
expires if you also disclose the time period during which the premium initial rate
will remain in effect.

If you disclose 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.

Disclosure of the rate that will apply after the premium initial rate expires is
required for credit cards.
Penalty Rates
If a rate may increase as a penalty for one or more events specified in the account
agreement, you must disclose:
 The increased rate that may apply.

A brief description of the event or events that may result in the increased rate.

A brief description of how long the increased rate will remain in effect.
If more than one penalty rate may apply, you may disclose the highest rate that could apply
(instead of disclosing the specific rates or the range of rates that could apply.)
Fees for Issuance or Availability
 You must disclose any annual or other periodic fee that may be imposed for the
issuance or availability of an open-end plan

Include any fee based on account activity or inactivity; how frequently it will be
imposed; and the annualized amount of the fee.

For any non-periodic fees that relates to opening the plan, you must disclose that
the fee is a one-time fee.
Fixed Finance Charge or Minimum Interest Charge
 Disclose any fixed finance charge and a brief description of the charge.

Disclose any minimum interest charge if it exceeds $1.00, that could be imposed
during a billing cycle, and a brief description of the charge.
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Open-End Credit
Transaction Charges
Disclose any transaction charge imposed for purchases.
Grace Period
 Disclose the date by which or the period within which any credit extended may be
repaid without incurring a finance charge and any conditions on the availability of
the grace period.

If no grace period is provided, you must disclose that fact.

If the length of the grace period varies, you 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.

You must use the phrase “How to Avoid Paying Interest” as the heading for the row
describing the grace period if the grace period applies to all features of the account.

Use the phrase “Paying Interest” on the heading row if a grace period is not offered
on all features of the account.
Fees
Disclose the following fees:
 Cash advance fees

Late payment fees

Over-the-limit fees

Balance transfer fees

Returned-payment fees
Required Insurance, Debt Cancellation or Debt Suspension Coverage
 Disclose any fees for required insurance
 Include a cross reference to any additional information provided about the
insurance or coverage, as applicable.
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Open-End Credit
Available Credit
This disclosure is required if you require fees for the issuance or availability of credit
and/or require a security deposit, and the total amount of the 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. When this is the
case you must provide the following disclosures:
 The available credit remaining after these fees or security deposit are debited to the
account.
 The fact that the consumer has the right to reject the plan and not be obligated to
pay the 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.
 These disclosures are not required if fees or security deposits are not debited to the
account.
Web site Reference
For credit card accounts, you must include a reference to the Web site established by the
Federal Reserve Board and a statement that consumers may obtain on the Web site
information about shopping for and using credit cards.
Directly Below the Table
Disclose the following directly below the table.
Introductory Rates
If you disclose an introductory rate, you must disclose:
 The circumstances under which the introductory rate may be revoked.
 The rate that will apply after the introductory rate is revoked.
Employee Preferential Rates
If you disclose a preferential annual percentage rate for employees (or others with similar
affiliation) you must briefly disclose:
 The circumstances under which such preferential rate may be revoked.

The rate that will apply after such preferential rate is revoked.
Balance Computation Method
Disclose the name of the balance computation method that is used to determine the
balance on which the finance charge is computed for each feature along with a statement
that an explanation of the method(s) is provided with the account-opening disclosures.
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Open-End Credit
Billing Error Rights Reference
Disclose a statement that information about consumers' right to dispute transactions is
included in the account-opening disclosures.
Disclosures in the Body of the Account Agreement
Disclose the following in the body of the account agreement:
Charges Imposed as Part of the Plan
 Disclose any charges imposed as part of the plan that are not already disclosed in
the table.

Disclose the amount of the charge or an explanation of how the charge is
determined.

For finance charges, also include:
o A statement of when the charge begins to accrue
o 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.

Charges imposed as part of the plan include:
o Finance charges
o 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.
o Taxes imposed on the credit transaction by a state or other governmental
body, such as documentary stamp taxes on cash advances.
o 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.
o Charges imposed for terminating a plan.
o Charges for voluntary credit insurance, debt cancellation or debt suspension.
Balance Computation Method
Disclose an explanation of the method used to determine the balance to which the rate is
applied. (Model language)
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Open-End Credit
Variable-rate Accounts
 Disclose the following for variable rate accounts tied to an index:
o The fact that the annual percentage rate may increase.
o How the rate is determined, including the margin.
o The circumstances under which the rate may increase.
o The frequency with which the rate may increase.
o Any limitation on the amount the rate may change.
o The effect(s) of an increase.

For variable rate accounts not tied to increases in an index or formula, disclose the
following:
o The initial rate (expressed as a periodic rate and a corresponding annual
percentage rate)
o How long the initial rate will remain in effect and the specific events that
cause the initial rate to change.
o 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.
o The balances to which the new rate will apply.
o The balances to which the current rate at the time of the change will apply.
Voluntary Credit Insurance, Debt Cancellation or Debt Suspension
Provide required disclosures for voluntary credit insurance, debt cancellation or debt
suspension.
Security Interests
Disclose 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.
Statement of Billing Rights
Disclose a statement that outlines the consumer's rights and the creditor's responsibilities
for billing errors. (Model Notice)
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Open-End Credit
Periodic Statements
General Rules

The following rules apply to non-HELOC accounts

You must provide a periodic statement to members with open-end credit for each
billing cycle during which a finance charge is imposed, or an account has a debit or
credit balance of more than $1.

A “billing cycle” is the interval between the days or dates of regular periodic
statements.
o These intervals must be equal, with a maximum interval of one calendar
quarter.
o Intervals are considered equal if the number of days in a cycle does not vary
by more than four days from the regular day or date of the periodic
statement.
Timing
Account Type
Credit Cards
Open-end
plans with a
grace period
(including
credit cards)
Timing
Restrictions
Mailed or delivered at
 Issuer must adopt “reasonable
least 21 days prior to the
procedures” to insure prompt delivery
payment due date
disclosed on the statement  Cannot treat any payment received
within 21 days after mailing or delivery
of the periodic statement as late
Mailed or delivered at
least 21 days prior to the
date on which a grace
period expires

Due dates must be the same numerical
date every month (or the last day of the
month)

The due date may be adjusted at the
consumer’s request

Creditor must adopt “reasonable
procedures” to insure prompt delivery

Cannot impose finance charges as a
result of the loss of the grace period if a
payment that satisfies the terms of the
grace period is received within 21 days
after mailing or delivery of the periodic
statement.
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Open-End Credit
Account Type
Open-end
plans without a
grace period
Timing
Mailed or delivered at
least 14 days prior to the
due date
Restrictions
 Cannot treat any payment received
within 14 days after mailing or delivery
of the periodic statement as late.
Content
Previous Balance
Disclose the account balance outstanding at the beginning of the billing cycle.
Identification of Transactions
The following information must be provided for each transaction involving the sale of
property or services:
 The transaction amount

The transaction date

The merchant's name

The city and state or foreign country where the transaction took place. (You 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.)
The following information must be provided for each non-sale transaction:
 A brief identification of the transaction

The amount of the transaction

One of the following dates:
o The date of the transaction
o The date the transaction was debited to the consumer’s account
Credits
Disclose any credit to the account during the billing cycle, including:
 The credit amount

The date of crediting. (The date need not be provided if a delay in crediting does
not result in any finance or other charge.)
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Open-End Credit
Periodic Rates
Disclose:
 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.”

The range of balances to which the periodic rate is applicable.

The types of transactions to which the periodic rate is applicable.

The fact that the annual percentage rate may vary if the rate is variable.

Promotional rates (only need to be disclosed in periods in which the offered rate is
actually applied.)
Balance on Which the Finance Charge is Computed
Disclose:
 The amount of the balance to which a periodic rate was applied AND

An explanation of how that balance was determined*

Use the term “Balance Subject to Interest Rate.”
If you determine a subject balance without first deducting all credits and payments made
during the billing cycle, you must:
 Disclose that fact, AND
 The amount of the credits and payments
*Note: As an alternative to providing an explanation of how the balance was determined,
you may:
 Identify the name of the balance computation method (if you use a balance
computations method outlined in Reg Z) AND
 Provide a toll-free telephone number where members can call for more information.
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Open-End Credit
Charges Imposed
Disclose the amounts of any charges imposed as part of a plan in the following manner:
 Grouped together.

In proximity to the list of transactions.

Substantially similar to Sample G–18(A) in Appendix G.
Disclose finance charges attributable to periodic interest rates, in the following manner:
 Using the term “Interest Charge”

Grouped together under the heading “Interest Charged”

Itemized and totaled by type of transaction

Provide a total of finance charges using the term “Total Interest”
Disclose any other charges imposed as part of the plan in the following manner:
 Grouped together under the heading “Fees”

Identified by the feature or type, and itemized

Provide a total of charges, using the term “Fees”
Change-in-terms and Increased Penalty Rate Summary
If you provide a change-in-terms notice or a rate increase notice on or with the periodic
statement, you must follow specific formatting rules. (See Change-in-Terms section).
Grace Period
Disclose 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.
Billing Errors Address
Disclose the address to be used for notice of billing errors. (Alternatively, the address may
be provided on the billing rights statement).
Closing Date of Billing Cycle and New Balance
Disclose:
 The closing date of the billing cycle

The account balance outstanding on that date

The account balance closely proximate to the minimum payment due
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Open-End Credit
Deferred Interest or Similar Transactions
For accounts with an outstanding balance subject to a deferred interest or similar program,
you must:
 Disclose the date by which that outstanding balance must be paid in full in order to
avoid the obligation to pay finance charges.

Make the disclosure on the front of any page of each periodic statement issued
during the deferred interest period.

Make the disclosure using a phrase substantial similar to the following, “You must
pay your promotional balance in full by [date] to avoid paying accrued interest
charges.”
Statement of Billing Rights
Annual Statement

You must mail or deliver a billing rights statement to members at least once per
calendar year.

You can mail the statement at intervals of not less than 6 months nor more than 18
months.

The statement has to be “substantially similar” to the examples found in Appendix G.
Alternative Summary Statement
In lieu of sending an annual statement, you may mail or deliver, on or with each periodic
statement, a statement substantially similar to Model Form G-4 or Model Form G-4(A) in
appendix G.
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Open-End Credit
Supplemental Credit Access Devices and Additional Features
You are required to provide additional disclosures when you provide members with
supplemental accesses devices (for example, checks) or additional credit features.
Account Device or
Type
Feature
Any
All
Time Frame
Offer Type
Within 30 days of
Same terms as
member receipt of those previously
account opening
disclosed
disclosures
All, except More than 30 days Same terms as
credit card after member
those previously
checks
receipt of account disclosed
opening
disclosures
All, except Any time
Different than
credit card
terms previously
checks
disclosed
Checks
Required if the checks are mailed
more than 30 days after member
receipt of account opening disclosures
or if the terms are different than those
previously disclosed
Any
Any
Credit
Card
Required Disclosures
None
Notification that the use of
the device or feature is for
use in obtaining credit
under the terms
previously disclosed
An explanation of all
finance charges that differ
from the original terms
 Similar to Sample G-19
in appendix G

Disclosed on the front
page of the checks
Change in Terms
The following rules apply only to non-HELOC accounts.
Timing
Significant Terms
 A credit union must provide members with a written notice of a change in
significant credit terms at least 45 days prior to the effective date of the change.

A “significant credit term” includes:
o Any change to the terms required to be disclosed in the account opening
table disclosure.
o An increase in the required minimum periodic payment.
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Open-End Credit
o The acquisition of a security interest.
Other Account Terms
If you increase or introduce any charge not required to be disclosed in the accountopening table, you may either provide:
 A 45-day prior notice of change in terms.

A notice of the amount of the charge before a member agrees to or becomes
obligated to pay the charge.
Member Agreement to Change
 A notice of change in terms is required, but it may be mailed or delivered as late as
the effective date of the change if the consumer agrees to the particular change.

The exception to the 45-day notification rule applies only when:
o
A consumer substitutes collateral
o The creditor can advance additional credit only if a change relatively unique
to that consumer is made (such as the consumer’s providing additional
security or paying an increased minimum payment amount.)

The following are not considered agreements between the consumer and the
creditor:
o The consumer’s general acceptance of the creditor’s contract reservation of
the right to change terms
o The consumer’s use of the account
o The consumer’s acceptance of a unilateral term change that is not particular
to that consumer, but rather is of general applicability to consumers with
that type of account
o The consumer’s request to reopen a closed account or to upgrade an existing
account to another account offered by the creditor with different credit or
other features.
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Open-End Credit
Change in Terms Content
If a credit union changes a term required to be disclosed in the account-opening table, it
must provide the following information on the notice:
 A statement that changes are being made to the account.

A summary of the changes made to the terms.

For non-credit card accounts: A statement indicating that the member has the right
to opt out of the changes, if applicable and a reference to additional information.

The date the changes will become effective.

If applicable, a statement that the member may find additional information about
the summarized changes and other changes to the account, in the notice.

If the credit union is changing a rate on the account, other than a penalty rate, a
statement that if a penalty rate currently applies to the member’s account, the new
rate will not apply to the member’s account until the account is no longer subject to
the penalty rate.

If the APR is being changed, the balances to which the new rate will be applied and if
applicable, a statement identifying the balances to which the current rate will
continue to apply.
Formatting Requirements
The “Summary of the changes” must be in a tabular format with headings and format
substantially similar to the account-opening table.
Provided with a Periodic Statement
When a change-in-terms notice is provided on the periodic statement, the “Summary of the
changes” must be located on the front of any page of the statement.
Provided Separate from the Periodic Statement
When a change-in-terms notice is provided separately from the periodic statement, the
“Summary of the changes” must be disclosed either:
 On the front of the first page of the notice

Segregated on a separate page of the notice from other information provided with
the notice.

The “Summary of the changes” 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.
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Open-End Credit
Change-in-terms Notice Not Required
A credit union is not required to provide a notice of change-in-terms when the change
involves:
 Charges for documentary evidence

A reduction of any component of a finance charge or other charge

Suspension of future credit privileges or termination of an account or plan

An agreement involving a court proceeding

An extension of the grace period

The change is applicable only to checks that access a credit card account and the
changed terms are disclosed on or with the checks as required

An increase in an annual percentage rate or fee upon the expiration of a specified
period of time, provided that:
o Prior to commencement of that period, the creditor disclosed in writing to
the consumer, in a clear and conspicuous manner, the length of the period
and the annual percentage rate or fee that would apply after expiration of the
period
o The disclosure of the length of the period and the annual percentage rate or
fee that would apply after expiration of the period are set forth in close
proximity and in equal prominence to the first listing of the disclosure of the
rate or fee that applies during the specified period of time; and
o The annual percentage rate or fee that applies after that period does not
exceed the “after rate” initially disclosed.

An increase in an APR due to the completion of a workout or temporary hardship
arrangement by the member, provided that:
o The APR that applies after the increases does not exceed the APR that applied
prior to the beginning of the workout plan or arrangement (for a variable
rate, the rate following the increase must be a variable rate using the same
index and margin that applied before the beginning of the workout or
hardhship arrangement; and
o The credit union has provided the member prior to the beginning of the
workout or arrangement a written disclosure of the terms of the
arrangement.
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Open-End Credit
Reduction of the Credit Limit
Advance notice of a decrease in a credit limit must be provided before an over-the-limit fee
or a penalty rate can be imposed solely as a result of the consumer exceeding the newly
decreased credit limit.
 The creditor must provide notice in writing or orally at least 45 days prior to
imposing the over- the-limit fee or penalty rate

The notice must state that the credit limit on the account has been or will be
decreased.
Increase in Rates due to Delinquency or Default or as a Penalty
A creditor must provide a written notice to each consumer who may be affected when:
 A rate is increased due to the consumer’s delinquency or default; or

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.
Timing of written Notice
 The credit union must 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 that trigger the
imposition of the rate increase.
Content of Disclosure
The penalty rate increase notice must include the following:
 A statement that the delinquency or default rate or penalty rate, as applicable, has
been triggered

The date on which the delinquency or default rate or penalty rate will apply

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

A statement indicating to which balances the delinquency or default rate or penalty
rate will be applied

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 60 days from the due date for that payment
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Open-End Credit
Formatting – Notice with Periodic Statements
If the penalty rate increase notice is included on or with a periodic statement, the required
information must:
 Be in the form of a table
 Provided on the front of any page of the periodic statement, above any other
change-in-terms notices
Formatting – Notice not with Periodic Statements
 If the penalty rate increase notice is not included on or with a periodic statement,
the required information 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 the notice may be combined with other change
in terms notices.
Exception for Decrease in Credit Limit
A creditor is not required to provide a penalty notice prior to increasing the rate for
obtaining an extension of credit that exceeds the credit limit, provided that:
 The creditor provides at least 45 days in advance of imposing the penalty rate a
notice, in writing, that includes:
o A statement that the credit limit on the account has been or will be decreased
o A statement indicating the date on which the penalty rate will apply, if the
outstanding balance exceeds the credit limit as of that date
o A statement that the penalty rate will not be imposed on the date specified if
the outstanding balance does not exceed the credit limit as of that date
o 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
o A statement indicating to which balances the penalty rate may be applied
o 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 60 days from
the due date for that payment

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
specified.
20
Open-End Credit

The notice is provided in one of the following manners:
o If provided on or with a periodic statement, the notice must be in the form of
a table and provided on the front of any page of the periodic statement; or
o If not included on or with a periodic statement, the notice 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 the
notice may be combined with other change-in-terms notices.
Payments
General

Credit unions must credit an open-end credit account with the amount of a payment
on the day the payment is received.

You may credit a payment at a later date only if the delay does not result in a finance
charge.
Payment Specifications
The credit union can make reasonable requirements for “conforming payments.”
Reasonable requirements include:
 Requiring that payments be accompanied by the account number or payment stub

Setting reasonable cut-off times for payments to be received by mail, by electronic
means, by telephone, and in person (no earlier than 5 p.m. on the payment due date)

Specifying that only checks or money orders should be sent by mail

Specifying that payment is to be made in U.S. dollar

Specifying one particular address for receiving payments, such as a post office box.
Non-conforming Payments
If the periodic statement includes specifications on how the member is to make payments
and the member sends a payment in a way that does not conform to those specifications,
the credit union will be in compliance with the regulation if it accepts the payment and
then credits it within five days of receipt.
Adjustments
If your credit union fails to give same-day credit on a payment (or five-day credit on a
nonconforming payment) and the failure results in a finance charge or other charges, the
credit union must adjust the account so that the wrongly imposed charges are recredited
during the next billing cycle.
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Open-End Credit
Credit Balances
For any credit balance of more than $1 on an account (for example, by an overpayment
made by the member), you must take the following actions:
 Credit the amount of the credit balance to the member’s account

Refund the credit balance, or any part of the credit balance remaining, within seven
days of receipt of a written request for refund by the member

Make a good faith effort to refund any part of a credit balance remaining in the
account for more than six months
Account Termination

You cannot terminate an account prior to its expiration date solely because the
member does not incur a finance charge.

You are permitted to terminate an account that is inactive for three or more
consecutive months.
Billing Errors
Definition
A Billing Error includes the following:
 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.

An incorrectly identified transaction on a periodic statement.

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.

A creditor's failure to credit properly a payment or other credit issued to the
consumer's account.

A computational or similar error of an accounting nature that is made by the
creditor.

An extension of credit for which the consumer requests additional clarification,
including documentary evidence.

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.
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Open-End Credit
Notice
A billing error notice is a written notice from a consumer that:
 Is received by a creditor no later than 60 days after the creditor transmitted the first
periodic statement that reflects the alleged billing error

Enables the creditor to identify the consumer's name and account number; and

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
Time for Resolution
Initial Acknowledgment
You must mail or deliver written acknowledgment to the consumer within 30 days of
receiving a billing error notice, unless you have completed the investigation and have
complied with notification requirements within that time.
Investigation Completion
You must complete the appropriate resolution procedures (including member notification)
within 2 complete billing cycles (but in no event later than 90 days) after receiving a billing
error notice.
Rules Pending Resolution
Until a billing error is resolved, the following rules apply:
 The member need not pay (and the credit union 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).

The credit union cannot 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 member failed to pay the disputed amount or related
finance or other charges.

The credit union may not accelerate any part of the consumer's indebtedness or
restrict or close a consumer's account solely because the consumer has exercised in
good faith rights provided by this section.

A credit union is not prohibited from:
o Taking action to collect any undisputed portion of the item or bill
o Deducting any disputed amount and related finance or other charges from
the consumer's credit limit on the account
o Reflecting a disputed amount and related finance or other charges on a
periodic statement, provided that the credit union indicates on or with the
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Open-End Credit
periodic statement that payment of any disputed amount and related finance
or other charges is not required pending the credit union’s compliance billing
error resolution requirements
Procedures if an Error Occurred
If the creditor determines that a billing error occurred as asserted, the following actions
must be taken within the allowed time frame:
 Correct the billing error and credit the member’s account with any disputed amount
and related finance or other charges, as applicable.

Mail or deliver a correction notice to the member.
Procedures if an Error Did Not Occur
If the credit union determines that no billing error occurred or that a different billing error
occurred from that asserted, the following actions must be taken within the allowed time
frame:
 Mail or deliver to the member an explanation with the reasons for the credit union’s
belief that the billing error alleged by the member is incorrect.

Furnish copies of documentary evidence of the member’s indebtedness, if the
member requests it.

If a different billing error occurred, correct the billing error and credit the member’s
account with any disputed amount and related finance or other charges, as
applicable.
Credit Union Duties After Resolution
If, after complying with all of the requirements of this section, a credit union determines
that a member owes all or part of the disputed amount and related finance or other
charges, the credit union must take the following actions:
 Promptly notify the member in writing of the time when payment is due and the
portion of the disputed amount and related finance or other charges that the
member still owes.

Allow the member a grace period (if the account contains a grace period) during
which the consumer can pay the amount due without incurring additional finance or
other charges.

Not report an account or amount as delinquent unless the amount due after
resolution is not paid by the due date.
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Open-End Credit
Re-assertion of Claim
When a member reasserts the same claim, a credit union is not required to repeat the
procedures described above. But if you have reported the account to a credit reporting
agency as delinquent, you must:
 Inform the agency that the amount is in dispute.

Mail a notice to the member stating the name and address of any reporting agencies
to which you made a report.

Promptly report any subsequent resolution of the dispute to all such agencies.
Multi-Feature Open Ended Lending
Existence of a Plan

A Multi-Feature Open-ended Lending (MFOEL) plan is an open-end plan containing
a number of different credit features.

The consumer has a single account with the institution that can be accessed
repeatedly via a number of sub-accounts established for the different program
features and rate structures.

Some features of the program might be used repeatedly (for example, an overdraft
line) while others might be used infrequently (such as the part of the credit line
available for secured credit).
Repeated Transactions
 The credit plan must be usable from time to time and the creditor must legitimately
expect that there will be repeat business rather than a one-time credit extension.
 The creditor must expect repeated dealings with consumers under the credit plan as
a whole and need not believe a consumer will reuse a particular feature of the plan.
Reusable Line
 The total amount of credit that may be extended during the existence of an openend plan is unlimited because available credit is generally replenished as earlier
advances are repaid.
 A line of credit is self-replenishing even though the plan itself has a fixed expiration
date, as long as during the plan’s existence the consumer may use the line, repay,
and reuse the credit.
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Open-End Credit
Credit Verification
 The creditor may occasionally or routinely verify credit information such as:
o The consumer’s continued income
o Employment status
o Information for security purposes
 To meet the definition of open-end credit, such verification of credit information
may not be done as a condition of granting a consumer’s request for a particular
advance under the plan.
 A credit line is self-replenishing if the consumer can take further advances as
outstanding balances are repaid without being required to separately apply for
those additional advances.
Verifications of Collateral Value
A creditor may verify collateral values to comply with federal, state, or other applicable law
or in connection with a particular advance under the plan.
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