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 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 the card issuer to 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, (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.