Bill Text: CA AB1300 | 2013-2014 | Regular Session | Amended

California Assembly Bill 1300 (Prior Session Legislation)

Bill Title: Credit cards: oral disclosures.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2014-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1300 Detail]

Download: California-2013-AB1300-Amended.html

BILL NUMBER: AB 1300	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 6, 2013

INTRODUCED BY   Assembly Member Roger Hern�ndez

                        FEBRUARY 22, 2013

   An act to add Section 1748.97 to the Civil Code, relating to
credit cards.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1300, as amended, Roger Hern�ndez. Credit cards: oral
disclosures.
   Existing state and federal laws regulate the provision of credit
and the use of credit cards. Existing federal law requires a card
issuer to disclose, in either electronic form or in a prominent
location on the application or solicitation, certain information,
including, but not limited to, the annual percentage rate, penalty
rates, cash advance fees, late payment fees, and over-the-limit fees,
to the extent applicable, on or with an application or solicitation
that is initiated by the card issuer and provided to the consumer in
person. Existing federal law imposes special rules applicable to
credit cards offered to college students. Existing state law requires
a card issuer of a secured credit card, as defined, in every
advertisement or solicitation to prospective cardholders, to
expressly identify the credit instrument offered as a secured credit
card and disclose that credit extended under the secured credit card
is secured. Existing state law also requires an application form or
preapproved written solicitation for an open-end credit card account
to be used for certain purposes that is mailed to a consumer in this
state to contain specified disclosures, including, among other
things, any periodic rate or rates that may be applied to the
account, any membership or participation fee that may be imposed for
availability of a credit card account, and any per transaction fee
that may be imposed on purchases, as specified.
   This bill would require  a credit card issuer on or the
near the campus of an institution of higher education or at an event
sponsored by or related to an institution of higher education to
orally disclose to a first-time cardholder between 18 and 26 years of
age   that prior to the issuance of a credit card on
the campus of an institution of higher education to a cardholder who
is 18 years of age or older the cardholder be provided with an oral
disclosure, by the credit card issuer soliciting on the campus of an
institution of higher education, containing  certain
information, including, but not limited to, the annual percentage
rate, penalty rates, cash advance fee, late payment fee, and
over-the-limit fee, in a specified manner. The bill would also
require  such a   the  card issuer to
 , among other things,  orally (1) provide a
cardholder with an example of how long it would take a cardholder to
pay off the average credit card debt if the cardholder only makes
minimum payments  and   ,  (2) explain how
the credit card interest rates are compounded  , and (3) explain
the adverse effect of a late credit card payment, as specified 
. The bill would require a cardholder to initial and sign a written
document to be provided by the card issuer indicating receipt of the
oral disclosures, example, and explanations, as specified.  The
bill would require the credit card issuer to provide the oral
disclosures, example, and explanation and the written document to a
non-English speaking cardholder in the cardholder's native language.
The bill would specify that these provisions are not applicable to
credit card applications submitted online. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1748.97 is added to the Civil Code, to read:

   1748.97.  (a) (1) A credit card issuer on the campus of an
institution of higher education, near the campus of an institution of
higher education, or at an event sponsored by or related to an
institution of higher education, shall, at or prior to the time of
the issuance of a credit card, orally disclose to a first-time
cardholder of a credit card between 18 and 26 years of age the
following: 
    1748.97.    (a) (1) Prior to the issuance of a
credit card on the campus of an institution of higher education to a
cardholder who is 18 years of age or older, the cardholder shall be
provided with an oral disclosure, by the credit card issuer
soliciting on the campus of an institution of higher education, that
includes all of the following: 
   (A) Annual percentage rate.
   (B) Penalty rates.
   (C) Cash advance fee.
   (D) Late payment fee.
   (E) Over-the-limit fee.
   (F) Any event specified in the credit card agreement, such as, but
not limited to, a late payment or an extension of credit that
exceeds the credit limit, that would trigger an increase in the
cardholder's annual percentage rate.
   (2) In addition to the disclosures specified in paragraph (1), the
card issuer shall also orally (A) provide a cardholder with an
example of how long it would take the cardholder to pay off the
average credit card debt if the cardholder only makes the minimum
payments, (B) explain how the credit card interest rates are
compounded, and (C) explain the adverse effect a late credit card
payment may have on a cardholder.
   (b) After the card issuer provides the oral disclosures, example,
and explanations required by subdivision (a) and  at or
 prior to the time of the issuance of a credit card, the
card issuer shall provide a cardholder with a written document
containing each oral disclosure, example, and explanation and the
cardholder shall initial each disclosure, example, and explanation
received by the card issuer.
   (c)  At or prior   Prior  to the time of
the issuance of a credit card, a cardholder shall sign the written
document described in subdivision (b) stating that he or she was
provided with the oral disclosures, example, and explanations
required by subdivision (a).
   (d) In providing the  oral  disclosures  , example,
and explanations  described in subdivision (a), the credit card
issuer shall explain the terms in easy-to-understand, nontechnical
terms subject to the description of those terms contained in Section
226.5a of Title 12 of the Code of Federal Regulations. 
   (e) The credit card issuer shall provide the oral disclosures,
example, and explanation described in subdivision (a) and the written
document described in subdivisions (b) and (c) to a non-English
speaking cardholder in the cardholder's native language.  
   (f) This section shall not apply to credit card applications
submitted online.  
   (e) 
    (g)  The provisions of this section are severable. If
any provision of this section or its application is held invalid,
that invalidity shall not affect other provisions or applications
that can be given effect without the invalid provision or
application.