(a) Definition. For purposes of this section, the term “over-the-limit
transaction” means any extension of credit by a card issuer to complete
a transaction that causes a consumer’s credit card account balance
to exceed the credit limit.
(b) Opt-in requirement.
(1) General. A card issuer shall not assess a fee or charge on a consumer’s credit
card account under an open-end (not home-secured) consumer credit
plan for an over-the-limit transaction unless the card issuer:
(i) Provides the consumer with an oral, written or electronic notice,
segregated from all other information, describing the consumer’s right
to affirmatively consent, or opt in, to the card issuer’s payment
of an over-the-limit transaction;
(ii) Provides a reasonable opportunity
for the consumer to affirmatively consent, or opt in, to the card issuer’s
payment of over-the-limit transactions;
(iii) Obtains the consumer’s affirmative
consent, or opt-in, to the card issuer’s payment of such transactions;
(iv) Provides the
consumer with confirmation of the consumer’s consent in writing, or
if the consumer agrees, electronically; and
(v) Provides the consumer notice in
writing of the right to revoke that consent following the assessment
of an over-the-limit fee or charge.
(2) Completion
of over-the-limit transactions without consumer consent. Notwithstanding
the absence of a consumer’s affirmative consent under paragraph (b)(1)(iii)
of this section, a card issuer may pay any over-the-limit transaction
on a consumer’s account provided that the card issuer does not impose
any fee or charge on the account for paying that over-the-limit transaction.
(c) Method of
election. A card issuer may permit a consumer to consent to the
card issuer’s payment of any over-the-limit transaction in writing,
orally, or electronically, at the card issuer’s option. The card issuer
must also permit the consumer to revoke his or her consent using the
same methods available to the consumer for providing consent.
(d) Timing and placement of
notices.
(1) Initial notice.
(i) General. The notice required by paragraph (b)(1)(i) of this section shall
be provided prior to the assessment of any over-the-limit fee or charge
on a consumer’s account.
(ii) Oral
or electronic consent. If a consumer consents to the card issuer’s
payment of any over-the-limit transaction by oral or electronic means,
the card issuer must provide the notice required by paragraph (b)(1)(i)
of this section immediately prior to obtaining that consent.
(2) Confirmation of opt-in. The notice required
by paragraph (b)(1)(iv) of this section may be provided no later than
the first periodic statement sent after the consumer has consented
to the card issuer’s payment of over-the-limit transactions.
(3) Notice of right of revocation. The notice required by paragraph
(b)(1)(v) of this section shall be provided on the front of any page
of each periodic statement that reflects the assessment of an over-the-limit
fee or charge on a consumer’s account.
(e) Content.
(1) Initial notice. The notice required by paragraph (b)(1)(i) of this section shall
include all applicable items in this paragraph (e)(1) and may not
contain any information not specified in or otherwise permitted by
this paragraph.
(i) Fees. The dollar amount of any fees or charges assessed by the card issuer
on a consumer’s account for an over-the-limit transaction;
(ii) APRs. Any increased periodic rate(s) (expressed as an annual
percentage rate(s)) that may be imposed on the account as a result
of an over-the-limit transaction; and
(iii) Disclosure
of opt-in right. An explanation of the consumer’s right to affirmatively
consent to the card issuer’s payment of over-the-limit transactions,
including the method(s) by which the consumer may consent.
(2) Subsequent notice. The notice required by paragraph (b)(1)(v)
of this section shall describe the consumer’s right to revoke any
consent provided under paragraph (b)(1)(iii) of this section, including
the method(s) by which the consumer may revoke.
(3) Safe harbor. Use of Model Forms G-25(A) or G-25(B) of Appendix G to this part,
or substantially similar notices, constitutes compliance with the
notice content requirements of paragraph (e) of this section.
(f) Joint relationships. If two or more consumers are jointly liable on a credit card account
under an open-end (not home-secured) consumer credit plan, the card
issuer shall treat the affirmative consent of any of the joint consumers
as affirmative consent for that account. Similarly, the card issuer
shall treat a revocation of consent by any of the joint consumers
as revocation of consent for that account.
(g) Continuing right to opt in or revoke opt-in. A consumer may affirmatively consent to the card issuer’s payment
of over-the-limit transactions at any time in the manner described
in the notice required by paragraph (b)(1)(i) of this section. Similarly,
the consumer may revoke the consent at any time in the manner described
in the notice required by paragraph (b)(1)(v) of this section.
(h) Duration of opt-in. A consumer’s affirmative consent to the card issuer’s payment of
over-the-limit transactions is effective until revoked by the consumer,
or until the card issuer decides for any reason to cease paying over-the-limit
transactions for the consumer.
(i) Time to comply with revocation request. A card issuer must comply with a consumer’s revocation request as
soon as reasonably practicable after the card issuer receives it.
(j) Prohibited practices. Notwithstanding a consumer’s affirmative consent to a card issuer’s
payment of over-the-limit transactions, a card issuer is prohibited
from engaging in the following practices:
(1) Fees or charges
imposed per cycle.
(i) General
rule. A card issuer may not impose more than one over-the-limit
fee or charge on a consumer’s credit card account per billing cycle,
and, in any event, only if the credit limit was exceeded during the
billing cycle. In addition, except as provided in paragraph (j)(1)(ii)
of this section, a card issuer may not impose an over-the-limit fee
or charge on the consumer’s credit card account for more than three
billing cycles for the same over-the-limit transaction where the consumer
has not reduced the account balance below the credit limit by the
payment due date for either of the last two billing cycles.
(ii) Exception. The prohibition in paragraph
(j)(1)(i) of this section on imposing an over-the-limit fee or charge
in more than three billing cycles for the same over-the-limit transaction(s)
does not apply if another over-the-limit transaction occurs during
either of the last two billing cycles.
(2) Failure to
promptly replenish. A card issuer may not impose an over-the-limit
fee or charge solely because of the card issuer’s failure to promptly
replenish the consumer’s available credit following the crediting
of the consumer’s payment under section 1026.10.
(3) Conditioning. A card issuer may not condition the amount of a consumer’s credit
limit on the consumer affirmatively consenting to the card issuer’s
payment of over-the-limit transactions if the card issuer assesses
a fee or charge for such service.
(4) Over-the-limit
fees attributed to fees or interest. A card issuer may not impose
an over-the-limit fee or charge for a billing cycle if a consumer
exceeds a credit limit solely because of fees or interest charged
by the card issuer to the consumer’s account during that billing cycle.
For purposes of this paragraph (j)(4), the relevant fees or interest
charges are charges imposed as part of the plan under section 1026.6(b)(3).
