As used in this chapter --
(1) "revolving credit account" means an arrangement between a seller or financial institution and a buyer pursuant to which (A) the seller or financial institution may permit the buyer to purchase goods or services on credit from time to time, either directly from the seller or indirectly by use of a credit card or other device, whether issued by the seller or a financial institution, (B) the unpaid balances of amount financed arising from purchases and credit service and other appropriate charges are debited to an account, (C) a credit service charge if made is not precomputed but is computed on an outstanding unpaid balance of the buyer's account from time to time, and (D) the buyer has the privilege of paying the balances in full or in installments. The term "revolving credit account" shall not include loans obtained by a person from a financial institution where a check, credit card, or other device is used to access a line of credit.
(2) "credit service charge" means the sum of (A) all charges payable directly or indirectly by the buyer and imposed directly or indirectly by the seller or financial institution as an incident to the extension of credit, including any of the following types of charges which are applicable: time-price differential, service, carrying, or other charge, however denominated, premium or other charge for any guarantee or insurance protecting the seller or financial institution against the buyer's default or other credit loss, and (B) charges incurred for investigating the collateral or credit-worthiness of the buyer or for commissions or brokerage for obtaining the credit irrespective of the person to whom the charges are paid or payable, unless the seller or financial institution had no notice of the charges when the credit was granted.
(3) "seller" means a person engaged in the District of Columbia in the business of selling goods or services to retail buyers.
(4) "buyer" means a person who buys goods or obtains services from a seller pursuant to a retail credit sale and not principally for the purpose of resale; and includes a person who enters into a prior agreement with a financial institution whereby the latter agrees to pay the debts of the buyer as they accrue at various retail sellers, designated by the financial institution, in consideration of the buyer paying to the financial institution the cash sales price plus the credit service charge on the purchase.
(5) "person" includes any individual, partnership, corporation, association, trust, joint stock company, or any other group of persons however organized.
(6) "financial institution" means a person who enters into an agreement with a buyer whereby the former agrees to extend credit to the buyer and to apply it as directed by the buyer pursuant to a credit card issued to the buyer by the financial institution; and this term includes any "insured bank" as defined in section 3 of the Federal Deposit Insurance Act, approved September 21, 1950 (64 Stat. 873; 12 U.S.C. sec. 1813) or any "insured institution" as defined in section 401 of the National Housing Act, approved June 27, 1934 (12 U.S.C. sec. 1724; 48 Stat. 1255) and any subsidiary corporation which is wholly-owned by a financial institution doing business in the District.
(Dec. 17, 1971, 85 Stat. 667, Pub. L. 92-200, § 4; Mar. 10, 1982, D.C. Law 4-70, § 5, 28 DCR 5236; Apr. 9, 1997, D.C. Law 11-255, § 27(j), 44 DCR 1271.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 28-3701.
1973 Ed., § 28-3701.
Legislative History of Laws
Law 4-70, the "Consumer Credit Interest Rate Amendments Act of 1981," was introduced in Council and assigned Bill No. 4-138, which was referred to the Committee on Finance and Revenue. The Bill was adopted on first and second readings on October 27, 1981, and November 10, 1981, respectively. Signed by the Mayor on December 2, 1981, it was assigned Act No. 4-117 and transmitted to both Houses of Congress for its review.
Law 11-255, the "Second Technical Amendments Act of 1996," was introduced in Council and assigned Bill No. 11-905, which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on November 7, 1996, and December 3, 1996, respectively. Signed by the Mayor on December 24, 1996, it was assigned Act No. 11-519 and transmitted to both Houses of Congress for its review. D.C. Law 11-255 became effective on April 9, 1997.
References in Text
"12 U.S.C. 1724", referred to in (6), was repealed by Pub. L. 101-73, title IV, § 407, August 9, 1989, 103 Stat. 363.
(a) The seller or financial institution may contract for the payment by the buyer of a credit service charge not exceeding that permitted by this section.
(b) A credit service charge may be made in each billing cycle. For the purpose of computing the outstanding balance subject to the credit service charge (1) the outstanding balance on any day shall consist of an amount which shall not exceed the sum of the total charges to the account less the amounts paid or credited to the account prior to such day, or (2) the outstanding balance may be computed by the average daily balance method. The credit service charge may also be computed for all outstanding balances within a range of not in excess of $10 on the basis of the median amount within such range if as so computed such credit service charge is applied to all outstanding balance within such range.
(c)(1) If the billing cycle is monthly, a credit service charge may be imposed in the maximum amount of 2%. If the billing cycle is not monthly, the maximum charge is that percentage which bears the relation to the applicable monthly percentage as the number of days in the billing cycle bears to 30. For the purposes of this section, a variation of not more than 4 days from month to month is "the same day of the billing cycle".
(2) Notwithstanding the terms of any revolving credit account or any other provision of law, a seller or financial institution, with respect to its revolving credit accounts may (A) impose or increase any credit service charge, (B) change the method of computing the balance upon which charges are imposed, or (C) increase the required minimum periodic payment; provided, that the seller or financial institution mails a written notice of the change to each affected buyer at least thirty (30) days before the effected date of the change; Provided, further, that the seller or financial institution shall permit each affected buyer to repay, under the existing terms, any debt incurred prior to the effective date of the change, unless the buyer incurs additional debt on or after that date or otherwise assents in writing to the changes. This paragraph does not authorize a seller or financial institution to impose a credit service charge in excess of that permitted under paragraph (1) of this subsection.
(3) The notice required by paragraph (2) of this subsection shall clearly set forth the new term or terms, the corresponding existing term or terms, and the effective date of the change; shall appear on a single document that contains no other information except the changed revolving credit account agreement or other material directly related to the change; and shall be in plain language. The notice shall clearly explain the two options available to the buyer. The options shall be presented more conspicuously than the rest of the notice by, for example, bold-faced type, larger type size, or contrasting color.
(d)(1) In addition to the credit service charge permitted in subsection (b) of this section, a seller or financial institution may impose a late fee, delinquency charge, or any similar assessment on each minimum payment not paid in full within 10 days after the date the minimum payment is due. The late fee, delinquency charge, or any similar assessment shall not exceed $15 for any one minimum payment not made within 10 days of the date the minimum payment was due.
(2) Notwithstanding the terms of any revolving credit account or any other provision of law, a seller or financial institution may impose a late fee, delinquency charge, or other similar assessment pursuant to paragraph (1) of this subsection provided that the seller or financial institution mails a written notice of the change to each affected buyer at least 30 days before the date of the effected change, and that the seller or financial institution shall permit each affected buyer to repay, under the existing terms, any debt incurred prior to the effective date of the change, unless the buyer incurs additional debt on or after that date or otherwise asserts in writing to the changes.
(3) The notice required by paragraph (2) of this subsection shall clearly set forth the new terms, the corresponding existing terms, and the effective date of the change; shall appear on a single document that contains no other information except the charged revolving account agreement or other material directly related to the change; and shall be in plain language.
(Dec. 17, 1971, 85 Stat. 668, Pub. L. 92-200, § 4; Mar. 10, 1982, D.C. Law 4-70, § 6, 28 DCR 5236; Mar. 14, 1984, D.C. Law 5-62, § 5, 31 DCR 114; July 14, 1995, D.C. Law 11-26, § 2, 42 DCR 2565; Apr. 18, 1996, D.C. Law 11-110, § 28, 43 DCR 530; Apr. 9, 1997, D.C. Law 11-255, § 27(k), 44 DCR 1271.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 28-3702.
1973 Ed., § 28-3702.
Legislative History of Laws
For legislative history of D.C. Law 4-70, see Historical and Statutory Notes following § 28-3701.
Law 5-62, the "Interest Rate Ceiling Amendment Act of 1983," was introduced in Council and assigned Bill No. 5-193, which was referred to the Committee on Finance and Revenue. The Bill was adopted on first and second readings on November 15, 1983, and December 6, 1983, respectively. Signed by the Mayor on December 23, 1983, it was assigned Act No. 5-93 and transmitted to both Houses of Congress for its review.
Law 11-26, the "Revolving Credit account Late Fee Act of 1995," was introduced in Council and assigned Bill No. 11-43, which was referred to the Committee on Consumer and Regulatory Affairs. The Bill was adopted on first and second readings on April 4, 1995 and May 2, 1995, respectively. Signed by the Mayor on May 15, 1995, it was assigned Act No. 11-54 and transmitted to both Houses of Congress for its review. D.C. Law 11-26 became effective on July 14, 1995.
Law 11-110, the "Technical Amendments Acts of 1996," was introduced in Council and assigned Bill No. 11-485, which was referred to the Committee of the Whole. The Bill was adopted on first and second readings on December 5, 1995, and January 4, 1996, respectively. Signed by the Mayor on January 26, 1996, it was assigned Act No. 11-199 and transmitted to both Houses of Congress for its review. D.C. Law 11-110 became effective on April 18, 1996.
For legislative history of D.C. Law 11-255, see Historical and Statutory Notes following § 28-3701.
