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Can you summarize VTCR 21-010-012?
BANKING DIVISION > REGULATION B-99-1; SECURED CREDIT CARDS
Short Summary
Regulation B-99-1, also known as Secured Credit Cards, is a regulation promulgated by the Department of Financial Regulation’s Banking Division in Vermont. The purpose of this regulation is to promote the informed use of consumer credit and provide consumer protection. It requires the inclusion of specific minimum contract terms in the cardholder agreement for secured credit cards. Secured credit cards are designed to make credit available to riskier borrowers who may not be eligible for unsecured credit cards. The regulation mandates that the cardholder agreement must be written in clear and understandable language, easily readable, and in a form that the consumer can keep. All deposits required under the cardholder agreement must be held in a federally insured account. The regulation defines key terms such as cardholder, card issuer, credit card, and security interest. The cardholder agreement must contain a clause informing the cardholder about the requirement to maintain a deposit account as security for the credit card account and grant a security interest in the deposit account. It should also specify the minimum amount required to be maintained in the deposit account. The agreement must outline the circumstances and manner in which the cardholder can terminate the card issuer’s security interest and withdraw funds from the deposit account. Additionally, it should detail the circumstances and manner in which the card issuer can exercise an offset against the security interest. All contract terms related to secured credit cards must be provided to the cardholder before activating the credit card account. The regulation became effective on December 1, 1999, and lenders were required to comply with it 60 days after the effective date. If any provision of the regulation is determined to be invalid, it will not affect other provisions that can be given effect without the invalid provision. Overall, this regulation sets out the requirements and guidelines for secured credit cards in Vermont.
Whom does it apply to?
Credit card issuers and cardholders
What does it govern?
Secured credit cards
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Vermont