Fair Credit and Charge Card Disclosure Act of 1988

(Conference report filed in House, H. Rept. 100-1069)

Fair Credit and Charge Card Disclosure Act of 1988 - Amends the Truth in Lending Act (the Act) to require new disclosures of information in connection with credit card and charge card account applications and solicitations. (Defines the latter as solicitations to open such an account without requiring an application.)

Sets forth separate disclosure requirements for the following categories: (1) direct mail applications and solicitations for credit cards; (2) telephone solicitations for credit cards; (3) applications and solicitations for credit cards by other means (i.e. made available to the public in forms like "take-one" pads or forms contained in catalogs, magazines, or other publications); and (4) charge card applications and solicitations. (Defines "charge card" as any single credit device that may be used from time to time to obtain credit which is not subject to finance charges. Defines "credit card" as one involving an open end consumer credit plan.)

Requires direct mail applications and solicitations for credit card to contain the information pertaining to the following subjects in a tabular format: (1) specified annual percentage rates (including those applicable to extensions, variable rates, and multiple rates ranges); (2) specified annual and other fees (including fees for card issuance or availability, minimum finance charges, and transaction charges); (3) grace period; and (4) balance calculation method. Requires such applications and solicitations to disclose clearly and conspicuously the following information (subject to other specified disclosure rules): (1) cash advance fee; (2) late fee; and (3) over-the-limit fee.

Requires telephone solicitors for credit cards to disclose orally information on: (1) specified annual percentage rates (including those applicable to extensions, variable rates, and multiple rates ranges); (2) specified annual and other fees (including fees for card issuance or availability, minimum finance charges, and transaction charges); (3) grace period; and (4) balance calculation method. Makes such requirement inapplicable to any telephone solicitation if the credit card issuer: (1) does not impose any fee for card issuance or availability or any fee in connection with the telephone solicitation (unless, in the latter case, the consumer uses the card); (2) discloses such required information clearly and conspicuously in writing within 30 days after the consumer requests the card, but no later than the date of delivery of the card; and (3) discloses clearly and conspicuously that the consumer is not obligated to accept the card or account and will not be obligated to pay any disclosed fees or charges unless the consumer elects to accept by using the card.

Prescribes disclosure requirements for applications and solicitations by other means (in catalogs, magazines, and so forth).

Requires charge card applications or solicitations to disclose clearly and conspicuously in a tabular format: (1) any fees for issuance or availability of the card, including an account maintenance fee or other charge based on account activity or inactivity; (2) any transaction charge; and (3) a statement that charges for use of the card are due and payable upon receipt of a periodic statement. Requires each such written application or solicitation also to disclose clearly and conspicuously: (1) cash advance fee; (2) late fee; and (3) over-the-limit fee. Establishes disclosure requirements for charge card applications and solicitations by other means. Sets forth special disclosure rules for issuers of charge cards which provide access to open end consumer credit plans, and for the creditors which maintain such plans.

Authorizes the Board of Governors of the Federal Reserve System (the Board) to require, by regulation, the disclosure of additional information, and modify specified required disclosures, in credit card or charge card applications or solicitations, upon determination that such action is necessary to carry out the purposes of, or prevent evasion of, certain disclosure requirements.

Requires credit card or charge card issuers which impose specified annual or other fees to disclose certain cost information to consumers at least 30 days before an account's scheduled renewal date. Allows such notice to be provided in specified optional formats, as long as the consumer has at least 30 days to avoid fee payment or to have the fee recredited if the consumer does not opt to renew. Authorizes the Board, by regulation, to provide for fewer required disclosures where an account is renewable for a period of less than six months.

Sets forth other rules for disclosures, relating to determination of fees on a percentage basis and to requiring only disclosure of fees actually imposed.

Allows disclosure of the range of certain fees which vary by State.

Requires certain disclosures required under this Act to be made in a tabular format. Grants the Board discretion in prescribing the order and wording of such tables. Requires the term "grace period" to be used in the appropriate heading or statement.

Restricts the civil liability of card issuers under this Act only to credit or charge cardholders who either pay a specified fee or use such card.

Provides for coordination with other laws. Provides that the requirements of this Act supersede any State laws relating to similar matters, but allows States to employ or establish State laws to enforce such requirements.

Directs the Board to collect, semiannually, credit card price and availability information from a broad sample of financial institutions which offer credit card services. Sets forth requirements for such a sample. Requires institutions in such a sample to report information to the Board in accordance with its regulations and orders. Directs the Board to: (1) make such information available to the public upon request; and (2) report it semiannually to the Congress.

Adds new disclosure requirements relating to insurance provided in connection with certain open end credit card plans. Requires card issuers that offer any guarantees on insurance for repayment of the outstanding balance of such a plan, whenever they propose to change the provider of such guarantee or insurance, to send written notice of the proposed change to each insured consumer at least 30 days before such change. Requires such notice to include any increase in the rate or substantial decrease in coverage or service which will result from such change. Allows such notice to be included on or with the monthly statement provided prior to the month in which the proposed change would take effect. Requires that the insured consumer also be given the name and address of the new guarantor or insurer and a copy of the policy or group certificate containing the basic terms and conditions, including the premium rate. Requires both such notices to include a statement of the consumer's right to opt to discontinue the insurance or guarantee. Provides that such disclosure requirements shall not be construed to supersede any provision of State law applicable to the regulation of insurance. Directs the Board to define, in regulations, what constitutes a substantial decrease in coverage or service.

Sets forth effective date provisions for regulation prescribed by the Board under credit and charge card disclosure requirements of this Act.

Directs the Board, within one year after such regulations become effective and annually thereafter, to report to the Congress its assessment of the profitability of credit card operations of depository institutions, including an analysis of any impact on such profitability of the amendments made by this Act.