Appendix A

FOOTNOTES

  [f.1] A person regularly extends consumer credit only if it extended credit more than 25 times (or more than 5 times for transactions secured by a dwelling) in the preceding calendar year. If a 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 Section 2. 32 or one or more such credit extensions through mortgage broker.

  [f.2] See footnote 1.

  [f.3] This includes single interest insurance if the insurer waives all right of subrogation against the consumer.

  [f.4] A creditor may reserve the right to refuse to accept, for reasonable cause an insurer offered by the consumer.

  [f.5] The disclosure required by Section 2. 9.(d) when a finance charge is imposed at the time of a transaction need not be written.

  [f.6] The disclosures required under section 2.5.[A] for credit and charge card applications and solicitations, the home equity disclosures required under Section 2. 5.[B](d), the alternative summary billing rights statement provided for in section 2.9.(a)(ii), the credit and charge card renewal disclosures required under section 2.9.(e), and the disclosures made under section 2.10.(b) about payment requirements need not be in a form that the consumer can keep.

  [f.7] The terms need not be more conspicuous when used under Section 2. 5.[A] for credit and charge card applications and solicitations, under section 2.7.(d) on periodic statements, under section 2.9.(e) in credit and charge card renewal disclosures, and under section 2.16 in advertisements.

  [f.8] This timing requirement 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.

  [f.8(a)] The disclosures and the brochure may be delivered or placed in the mail not later than three business days following receipt of a consumer’s application in the case of applications contained in magazines or other publications, or when the application is received by telephone or through an intermediary agent or broker.

  [f.8(b)] A balloon payment results if paying the minimum periodic payments does not fully amortize the outstanding balance by a specified date or time, and the consumer must repay the entire outstanding balance at such time.

  [f.8(c)] For fixed-rate plans, a recent annual percentage rate is a rate that has been in effect under the plan within the twelve months preceding the date the disclosures are provided to the consumer. For variable-rate plans, a recent annual percentage rate is the most recent rate provided in the historical example described in subsection (d)(xii)(K) of this section or a rate that has been in effect under the plan since the date of the most recent rate in the table.

  [f.8(d)] If the disclosures and brochure are mailed to the consumer, the consumer is considered to have received them three business days after they are mailed.

  [f.9] A creditor is not required to adjust the range of balances disclosure to reflect the balance below which only a minimum charge applies.

  [f.10] If a creditor is offering a variable rate plan, the creditor shall also disclose: (1) the circumstances under which the rate(s) may increase; (2) any limitations on the increase; and (3) the effect(s) of an increase.

  [f.11] If no finance charge is imposed when the outstanding balance is less than a certain amount, no disclosure is required of that fact or of the balance below which no finance charge will be imposed.

  [f.12] See footnotes 9 and 11.

  [f.13] If a variable rate plan is involved, the creditor shall disclose the fact that the periodic rate(s) may vary.

  [f.14] Failure to disclose the information required by this section shall not be deemed failure to comply with the regulation if: (1) the creditor maintains procedures reasonably adapted to obtain and provide the information; and (2) the creditor treats an inquiry for clarification or documentation as a notice of a billing error, including correcting the account in accordance with Section 226.13.(e) of Federal Regulation Z. This applies to transactions that take place outside state, as defined in Section 2. 2.(a), whether or not the creditor maintains procedures reasonably adapted to obtain the required information.

  [f.15] As an alternative to the brief identification, 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, and if the creditor treats an inquiry for clarification or documentation as a notice of a billing error, including correcting the account in accordance with Section 226.13.(e) of Federal Regulation Z.

  [f.16] An identification of property or services may be replaced by the seller’s name and location of the transaction when: (1) the creditor and the seller are the same person; (2) the creditor’s open-end plan has fewer than 15,000 accounts; (3) the creditor provides the consumer with point-of-sale documentation for that transaction; and (4) the creditor treats an inquiry for clarification or documentation as a notice of a billing error, including correcting the account in accordance with Section 226.13.(e) of Federal Regulation Z.

  [f.17] The creditor may omit the address or provide any suitable designation that helps the consumer to identify the transaction when the transaction (1) took place at a location that is not fixed; (2) took place in the consumer’s home; or (3) was a mail or telephone order.

  [f.18] See footnote 15.

  [f.18(a)] These disclosures need not be provided in tabular format or in a prominent location.

  [f.19] For the purposes of this section, “accepted credit card” means any credit card that a cardholder has requested or applied for and received, or has signed, used, or authorized another person to use to obtain credit. Any credit card issued as a renewal or substitute in accordance with this subsection becomes an accepted credit card when received by the cardholder.

  [f.20]  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.

  [f.21]  Adequate notice” means a printed notice to a card holder that sets forth clearly the pertinent facts so that the cardholder may reasonably be expected to have noticed it and understood its meaning. The notice may be given by any means reasonably assuring receipt by the cardholder.

  [f.22] This subsection does not apply to the use of a check guarantee card or a debit card in connection with an overdraft credit plan, or to a check guarantee card used in connection with cash advance checks.

  [f.23] he amount of the claim or defense that the card holder may assert shall not exceed the amount of credit out standing for the disputed transaction at the time the card holder first notifies the card issuer or the person honoring the credit card of the existence of the claim or defense. To determine the amount of credit outstanding for purposes of this section, payments and other credits shall be applied to: (1) late charges in the order of entry to the account; then to (2) finance charges in the order of entry to the account; and then to (3) any other debits in the order of entry to the account. If more than one item is included in a single extension of credit, credits are to be distributed pro rata according to prices and applicable taxes.

  [f.24] The limitations stated in subsection (c)(iii)(B) of this section shall not apply when the person honoring the credit card: (1) is the same person as the card issuer; (2) is controlled by the card issuer directly or indirectly; (3) is under the direct or indirect control of a third person that also directly or indirectly controls the card issuer; (4) controls the card issuer directly or indirectly; (5) is a franchised dealer in the card issuer’s products or services; or (6) has obtained the order for the disputed transaction through a mail solicitation made or participated in by the card issuer.

  [f.25(a)] Information provided in accordance with variable-rate regulations of other federal agencies may be substituted for the disclosures required by subsection (b) of this section.

  [f.25(b)] Disclosures may be delivered or placed in the mail not later than three business days following receipt of a consumer’s application when the application reaches the creditor by telephone, or through an intermediary agent or broker.

  [f.25(c)] Information provided in accordance with variable-rate subsequent disclosure regulations of other federal agencies may be substituted for the disclosure required by subsection (c) of this section.

  [f.25(d)] 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 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 Administrator in writing of the error in the calculation tool. This footnote shall cease to be effective on April 1, 1982.

  [f.26] If there is no balance to which the finance charge is applicable, an annual percentage rate cannot be determined under this section.

  [f.27] Where the finance charge imposed during the billing cycle is or includes a loan fee, points, or similar charge that relates to the opening of the account, the amount of such charge shall not be included in the calculation of the annual percentage rate.

  [f.28] See Appendix F to Board’s Regulation Z regarding determination of the denominator of the fraction under this subsection.

  [f.29] See Footnote 27.

  [f.30] The term “material disclosures” means the information that must be provided to satisfy the requirements of Section 2. 6. with regard to the method of determining the finance charge and the balance upon which a finance charge will be imposed, the annual percentage rate, and the amount or method of determining the amount of any membership or participation fee that may be imposed as part of the plan, and the payment information described in Section 2.5.[B](d)(v)(A) and (B) that is required under Section 2. 6.(e)(ii).

  [f.30(a)] A list of the affected areas will be maintained by the Board.

  [f.30(b)] The disclosures given in accordance with section 2.5.[A] do not constitute advertising terms for purposes of the requirements of this section.

  [f.31] The disclosures may include an acknowledgment of receipt, the date of the transaction, and the consumer’s name, address, and account number.

  [f.32] The following disclosures may be made together or separately from other required disclosures: the creditor’s identity under Section 2. 18.(a), the variable rate example under Section 2.18.(f)(iv), insurance under Section 2.18.(n) and certain security interest charges under Section 2.18.(o).

  [f.33] Good faith estimates of settlement costs provided for transactions subject to the Real Estate Settlement Procedures Act (12 U.S.C. 2601 et seq.) may be substituted for the disclosures required by subsection (c) of this section.

  [f.34] The following payees may be described using generic or other general terms and need not be further identified: public officials or government agencies, credit reporting agencies, appraisers, and insurance companies.

  [f.35] The finance charge shall be considered accurate if it is not more than $5 above or below the exact finance charge in a transaction involving an amount financed of $1,000 or less, or not more than $10 above or below the exact finance charge in a transaction involving an amount financed of more than $1,000.

  [f.36] For any transaction involving a finance charge of $30 or less, the creditor need not disclose the annual percentage rate.

  [f.37] Information provided in accordance with section 2.18.(f)(ii) and 2.19.(b) may be substituted for the disclosures required by subsection (f)(i) of this section.

  [f.38] In any transaction involving a single payment, the creditor need not disclose the total of payments.

  [f.39] A required deposit need not include, for example: (1) an escrow account for items such as taxes, insurance or repairs; (2) a deposit that earns not less than 5 percent per year, or (3) payments under a Morris Plan.

  [f.40] For purposes of subsection (a)(iii) of this section, an irregular transaction is one that includes one or more of the following features: multiple advances, irregular payment periods or irregular payment amounts (other than an irregular first period or an irregular first or final payment).

  [f.41] For purposes of this section, the addition to an existing obligation of a security interest in a consumer’s principal dwelling is a transaction. The right of rescission applies only to the addition of the security interest and not the existing obligation. The creditor shall deliver the notice required by subsection (b) of this section but need not deliver new material disclosures. Delivery of the required notice shall begin the rescission period.

  [f.42] The term “material disclosures” means the required disclosures of the annual percentage rate, the finance charge, the amount financed, the total of payments, the payment schedule, and the disclosures and limitations referred to in Section 2.32(c) and (d).

  [f.42(a)] See footnote 30(a).

  [f.43] An example of one or more typical extensions of credit with a statement of all the terms applicable to each may be used.