Exploring Regulation Z’s opt-in requirement for over-the-limit fees

first_imgNAFCU has covered many of the different credit card rules in past Compliance Blog posts. However, one topic we haven’t covered lately is the requirements around charging members for exceeding a credit limit. Section 1026.56 covers the rules for over-the-limit transactions on a credit card. An over-the-limit transaction is “any extension of credit by a card issuer to complete a transaction that causes a consumer’s credit card account balance to exceed the credit limit.” Today’s post addresses the opt in process for over-the-limit transactions and related fees.Section 1026.56(b) provides a blanket prohibition on charging a fee when a member exceeds a credit limit unless the credit union has properly obtained the member’s consent. The rule provides a five-step process for obtaining consent:Providing a notice, segregated from all other information, describing the member’s right to opt-in to the credit union’s payment of over-the-limit transactions;Providing the member with a reasonable opportunity to opt-in; continue reading » ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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