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  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE XX PUBLIC SAFETY AND GOOD ORDER
  • CHAPTER 140D CONSUMER CREDIT COST DISCLOSURE
  • Section 1 Definitions

Section 1. For the purpose of this chapter, the following words shall, unless the context indicates otherwise, have the following meanings:

“Accepted credit card”, any credit card which the cardholder has requested and received or has signed or has used, or authorized another to use, for the purpose of obtaining money, property, labor, or services on credit.

“Adequate notice”, a printed notice to a cardholder which sets forth the pertinent facts clearly and conspicuously so that a person against whom it is to operate could reasonably be expected to have noticed it and understood its meaning. Such notice may be given to a cardholder by printing the notice on any credit card, or on each periodic statement of account, issued to the cardholder, or by any other means reasonably assuring the receipt thereof by the cardholder.

“Advertisement”, a commercial message in any medium that promotes, directly or indirectly, a credit transaction.

“Agricultural products”, products relating to agricultural, horticultural, viticultural and dairy products, livestock, wildlife, poultry, bees, forest products, fish and shellfish, and any products thereof, including processed and manufactured products, and any and all products raised or produced on farms and any processed or manufactured products thereof.

“Agricultural purpose”, a purpose relating to the production, harvest, exhibition, marketing, transportation, processing, or manufacture of agricultural products by a natural person who cultivates, plants, propagates or nurtures those agricultural products, including but not limited to the acquisition of farmland, real property with a farm residence, and personal property and services used primarily in farming.

“Board”, the board of governors of the federal reserve system.

“Cardholder”, any person to whom a credit card is issued or any person who has agreed with the card issuer to pay obligations arising from the issuance of a credit card to another person.

“Card issuer”, any person who issues a credit card, or the agent of such person with respect to such card.

“Commissioner”, the commissioner of banks.

“Consumer”, used as an adjective, with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transactions are primarily for personal, family, or household purposes.

“Credit”, the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.

“Credit card”, any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit.

“Creditor”, a person who both (1) regularly extends, whether in connection with loans, sales or property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement. Notwithstanding the preceding sentence, in the case of an open-end credit plan involving a credit card, the card issuer and any person who honors the credit card and offers a discount which is a finance charge is a creditor. For the purposes of the requirements imposed under this chapter, the term “creditor” shall also include card issuers whether or not the amount due is payable by agreement in more than four installments or the payment of a finance charge is or may be required, and the commissioner shall, by regulation, apply these requirements to such card issuers, to the extent appropriate, even though the requirements are by their terms applicable only to creditors offering open-end credit plans.

“Credit sale”, any sale in which the seller is a creditor. The term includes any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the property and services involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the property upon full compliance with his obligations under the contract.

“Discount”, a reduction made from the regular price. The term “discount” shall not mean a surcharge.

“Dwelling”, a residential structure or mobile home which contains one to four family housing units, or individual units of condominiums or cooperatives.

“Material disclosure”, the disclosure, as required by this chapter, of the annual percentage rate, the method of determining the finance charge and the balance upon which a finance charge will be imposed, the amount of the finance charge, the amount to be financed, the total of payments, the number and amount of payments, and the due dates or periods of payments scheduled to repay the indebtedness.

“Open-end-credit plan”, a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open-end-credit plan within the meaning of the preceding sentence is an open-end-credit plan even if credit information is verified from time to time.

“Organization”, a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association.

“Person”, a natural person or an organization.

“Regular price”, the tag or posted price charged for the property or service if a single price is tagged or posted, or the price charged for the property or service when payment is made by use of an open-end-credit plan or credit card if either (1) no price is tagged or posted, or (2) two prices are tagged or posted, one of which is charged when payment is made by use of an open-end-credit plan or credit card and the other when payment is made by use of cash, check, or similar means. For purposes of this definition, payment by check, draft or other negotiable instrument which may result in the debiting of an open-end-credit plan or a credit card holder’s open end account shall not be considered payment by use of the plan or the account.

“Residential mortgage transaction”, a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer’s dwelling to finance the acquisition or initial construction of such dwelling.

“Surcharge”, any means of increasing the regular price to a cardholder which is not imposed upon customers paying by cash, check or similar means.

“Unauthorized use”, a 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.

Any reference to any requirement imposed under this chapter or any provision thereof includes reference to the regulations of the commissioner of banks under this chapter or the provision thereof in question.

The disclosure of an amount or percentage which is greater than the amount or percentage required to be disclosed under this chapter does not in itself constitute a violation of this chapter.