§14A-2-310.2. Disclosure requirements for revolving charge account
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plans secured by consumer's principal dwelling.
Disclosure requirements for revolving charge account plans secured by consumer's principal dwelling.
(1)In the case of any revolving charge account plan which provides for any extension of credit which is secured by the consumer's principal dwelling, the creditor shall make the following disclosures in accordance with subsection
(9)of Section 2-302 of this title:
(a)Each annual percentage rate imposed in connection with
extensions of credit under the plan and a statement
that such rate does not include costs other than
interest.
(b)In the case of a plan which provides for variable
rates of interest on credit extended under the plan:
(i)a description of the manner in which such rate
will be computed and a statement that such rate
does not include costs other than interest;
(ii)a description of the manner in which any changes
in the annual percentage rate will be made,
including:
(aa)any negative amortization and interest rate
carryover;
(bb)the time of any such changes;
(cc)any index or margin to which such changes in
the rate are related; and
(dd)a source of information about any such
index;
(iii)if an initial annual percentage rate is offered
which is not based on an index:
(aa)a statement of such rate and the period of
time such initial rate will be in effect;
and
(bb)a statement that such rate does not include
costs other than interest;
(iv)a statement that the consumer should ask about
the current index value and interest rate;
(v)a statement of the maximum amount by which the
annual percentage rate may change in any one-year
period or a statement that no such limit exists;
(vi)a statement of the maximum annual percentage rate
that may be imposed at any time under the plan;
(vii)subject to subsection (9)(g) of Section 2-302 of
this title, a table, based on a Ten Thousand
Dollar ($10,000.00) extension of credit, showing
how the annual percentage rate and the minimum
periodic payment amount under each repayment
option of the plan would have been affected
during the preceding fifteen-year period by
changes in any index used to compute such rate;
(viii)a statement of:
(aa)the maximum annual percentage rate which may
be imposed under each repayment option of
the plan;
(bb)the minimum amount of any periodic payment
which may be required, based on a Ten
Thousand Dollar ($10,000.00) outstanding
balance, under each such option when such
maximum annual percentage rate is in effect;
and
(cc)the earliest date by which such maximum
annual interest rate may be imposed; and
(ix)a statement that interest rate information will
be provided on or with each periodic statement.
(c)An itemization of any fees imposed by the creditor in
connection with the availability or use of credit
under such plan, including annual fees, application
fees, transaction fees, and closing costs (including
costs commonly described as "points"), and the time
when such fees are payable.
(i)An estimate, based on the creditor's experience
with such plans and stated as a single amount or
as a reasonable range, of the aggregate amount of
additional fees that may be imposed by third
parties including but not limited to governmental
authorities, appraisers, and attorneys in
connection with opening an account under the
plan.
(ii)A statement that the consumer may ask the
creditor for a good faith estimate by the
creditor of the fees that may be imposed by third
parties.
(e)A statement that:
(i)any extension of credit under the plan is secured
by the consumer's dwelling; and
(ii)in the event of any default, the consumer risks
the loss of the dwelling.
(i)A clear and conspicuous statement:
(aa)of the time by which an application must be
submitted to obtain the terms disclosed; or
(bb)if applicable, that the terms are subject to
change.
(ii)A statement that:
(aa)the consumer may elect not to enter into an
agreement to open an account under the plan
if any term changes, other than a change
contemplated by a variable feature of the
plan, before any such agreement is final;
and
(bb)if the consumer makes an election described
in division
(aa)of this subparagraph, the
consumer is entitled to a refund of all fees
paid in connection with the application.
(iii)A statement that the consumer should make or
otherwise retain a copy of information disclosed
under this subparagraph.
(g)A statement that:
(i)under certain conditions, the creditor may
terminate any account under the plan and require
immediate repayment of any outstanding balance,
prohibit any additional extension of credit to
the account, or reduce the credit limit
applicable to the account; and
(ii)the consumer may receive, upon request, more
specific information about the conditions under
which the creditor may take any action described
in subparagraph
(i)of this paragraph.
(h)The repayment options under the plan, including:
(i)if applicable, any differences in repayment
options with regard to:
(aa)any period during which additional
extensions of credit may be obtained; and
(bb)any period during which repayment is
required to be made and no additional
extensions of credit may be obtained;
(ii)the length of any repayment period, including any
differences in the length of any repayment period
with regard to the periods described in divisions
(aa)and
(bb)of subparagraph
(i)of this
paragraph; and
(iii)an explanation of how the amount of any minimum
monthly or periodic payment will be determined
under each such option, including any differences
in the determination of any such amount with
regard to the periods described in divisions
and
(bb)of subparagraph
(i)of this paragraph.
(i)An example, based on a Ten Thousand Dollar
($10,000.00) outstanding balance and the interest
rate, other than a rate not based on the index under
the plan, which is, or was recently, in effect under
such plan, showing the minimum monthly or periodic
payment, and the time it would take to repay the
entire Ten Thousand Dollars ($10,000.00) if the
consumer paid only the minimum periodic payments and
obtained no additional extensions of credit.
(j)If, under any repayment option of the plan, the
payment of not more than the minimum periodic payments
required under such option over the length of the
repayment period:
(i)would not repay any of the principal balance; or
(ii)would repay less than the outstanding balance by
the end of such period,
as the case may be, a statement of such fact, including an
explicit statement that at the end of such repayment period
a balloon payment as defined in subsection
(12)of Section
2-313 of this title would result which would be required to
be paid in full at that time.
(k)If applicable, a statement that:
(i)any limitation in the plan on the amount of any
increase in the minimum payments may result in
negative amortization;
(ii)negative amortization increases the outstanding
principal balance of the account; and
(iii)negative amortization reduces the consumer's
equity in the consumer's dwelling.
(i)Any limitation contained in the plan on the
number of extensions of credit and the amount of
credit which may be obtained during any month or
other defined time period.
(ii)Any requirement which establishes a minimum
amount for:
(aa)the initial extension of credit to an
account under the plan;
(bb)any subsequent extension of credit to an
account under the plan; or
(cc)any outstanding balance of an account under
the plan.
(m)A statement that the consumer should consult a tax
advisor regarding the deductibility of interest and
charges under the plan.
(n)Any other term which the Administrator requires, in
rules to be disclosed.
(2)For purposes of this section and Sections 2-310.3 and 2-313 of this title, the term "principal dwelling" includes any second or vacation home of the consumer.
(3)In addition to the disclosures required under subsection
(1)of this section with respect to an application to open an account under any revolving charge account plan described in such subsection, the creditor or other person providing such disclosures to the consumer shall provide:
(a)a pamphlet published by the Board of Governors of the
Federal Reserve System pursuant to Section 4 of the
Home Equity Consumer Protection Act of 1988; or
(b)any pamphlet which provides substantially similar
information to the information described in such
section, as determined by the Administrator. Added by Laws 1990, c. 260, § 18, operative July 1, 1990.