§ 6-26.1-11 - Amendment of agreement.
SECTION 6-26.1-11
§ 6-26.1-11 Amendment of agreement. –(a) Unless the agreement governing a credit card plan otherwise provides, acredit card lender may at any time and from time to time amend the agreement inany respect, whether or not the amendment or the subject of the amendment wasoriginally contemplated or addressed by the parties or is integral to therelationship between the parties. Without limiting the foregoing, the amendmentmay change terms by the addition of new terms or by the deletion ormodification of existing terms, whether relating to plan benefits or features,the rate or rates of interest, the manner of calculating interest oroutstanding unpaid indebtedness, variable schedules or formulas, interest feesand charges, fees, collateral requirements, methods for obtaining or repayingextensions of credit, attorneys' fees, plan termination, the manner foramending the terms of the agreement, arbitration or other alternative disputeresolution mechanisms, or other matters of any kind whatsoever. Unless theagreement governing a credit card plan otherwise expressly provides, anyamendment may, on and after the date upon which it becomes effective as to aparticular borrower, apply to all then outstanding unpaid indebtedness in theborrower's account under the plan, including any indebtedness that arose priorto the effective date of the amendment. An agreement governing a credit cardplan may be amended pursuant to this section regardless of whether the plan isactive or inactive or whether additional borrowings are available under it. Anyamendment that does not increase the rate or rates of interest charged by acredit card lender to a borrower under § 6-26.1-3 or § 6-26.1-4 maybecome effective as determined by the credit card lender, subject to complianceby the credit card lender with any applicable notice requirements under theTruth in Lending Act (15 U.S.C. § 1601 et seq.), and the regulationspromulgated under it, as in effect from time to time. Any notice of anamendment sent by the credit card lender may be included in the same envelopewith a periodic statement or as part of the periodic statement or in othermaterials sent to the borrower.
(b) If an amendment increases the rate or rates of interestcharged by a credit card lender to a borrower under § 6-26.1-3 or §6-26.1-4, the credit card lender shall mail or deliver to the borrower, atleast fifteen (15) days before the effective date of the amendment, a clear andconspicuous written notice that shall describe the amendment and shall also setforth the effective date of it and any applicable information required to bedisclosed pursuant to the following provisions of this section.
(2) Any amendment that increases the rate or rates ofinterest charged by a credit card lender to a borrower under § 6-26.1-3 or§ 6-26.1-4 may become effective as to a particular borrower if theborrower does not, within fifteen (15) days of the earlier mailing or deliveryof the written notice of the amendment (or any longer period that may beestablished by the credit card lender), furnish written notice to the creditcard lender that the borrower does not agree to accept the amendment. Thenotice from the credit card lender shall set forth the address to which aborrower may send notice of the borrower's election not to accept the amendmentand shall include a statement that, absent the furnishing of notice to thecredit card lender of nonacceptance within the referenced fifteen (15) day (orlonger) time period, the amendment will become effective and apply to theborrower. As a condition to the effectiveness of any notice that a borrowerdoes not accept the amendment, the credit card lender may require the borrowerto return to it all credit devices. If, after fifteen (15) days from themailing or delivery by the credit card lender of a notice of an amendment (orany longer period that may have been established by the credit card lender asreferenced above), a borrower uses a plan by making a purchase or obtaining aloan, notwithstanding that the borrower has prior to the use furnished thecredit card lender notice that the borrower does not accept an amendment, theamendment may be deemed by the credit card lender to have been accepted and maybecome effective as to the borrower as of the date that the amendment wouldhave become effective but for the furnishing of notice by the borrower (or asof any later date selected by the credit card lender).
(3) Any amendment that increases the rate or rates ofinterest charged by a credit card lender to a borrower under § 6-26.1-3 or§ 6-26.1-4 may, in lieu of the procedure referenced in subdivision (2) ofthis subsection, become effective as to a particular borrower if the borroweruses the plan after a date specified in the written notice of the amendmentthat is at least fifteen (15) days after the mailing or delivery of the notice(but that need not be the date the amendment becomes effective) by making apurchase or obtaining a loan; provided, that the notice from the credit cardlender includes a statement that the described usage after the references datewill constitute the borrower's acceptance of the amendment.
(4) Any borrower who furnishes timely notice electing not toaccept an amendment in accordance with the procedures referenced in subdivision(2) of this subsection and who does not subsequently use the plan, or who failsto use the borrower's plan as referenced in subdivision (3) of this subsection,shall be permitted to pay the outstanding unpaid indebtedness in the borrower'saccount under the plan in accordance with the rate or rates of interest chargedby a credit card lender to a borrower under § 6-26.1-3 or § 6-26.1-4without giving effect to the amendment; provided, however, that the credit cardlender may convert the borrower's account to a closed end credit account oncredit terms substantially similar to those set forth in the then-existingagreement governing the borrower's plan.
(5) Notwithstanding the other provisions of this section, nonotice required by this section of an amendment of an agreement governing acredit card plan shall be required, and any amendment may become effective asof any date agreed upon between a credit card lender and a borrower, withrespect to any amendment that is agreed upon between the credit card lender andthe borrower, either orally or in writing.
(c) For purposes of this section, the following are examplesof amendments that shall not be deemed to increase the rate or rates ofinterest charged by a credit card lender to a borrower under § 6-26.1-3 or§ 6-26.1-4:
(1) A decrease or increase in the required number or amountof periodic installment payments;
(2) Any change to a plan that increases the rate or rates ineffect immediately prior to the change by less than one-quarter of onepercentage point (0.25%) per annum; provided that a credit card lender may notmake more than one such change in reliance on this subdivision with respect toa plan within any twelve (12) month period;
(3) A change in the schedule or formula used under a variablerate plan under § 6-26.1-3 that varies the determination date of theapplicable rate, the time period for which the applicable rate will apply orthe effective date of any variation of the rate, or any other similar change; or
(ii) Any other change in the schedule or formula used under avariable rate plan under § 6-26.1-3; provided, that the initial interestrate that would result from any change under this subdivision (3), asdetermined on the effective date of the change or, if the notice of the changeis mailed or delivered to the borrower prior to the effective date, as of anydate within sixty (60) days before mailing or delivery of the notice, will notbe an increase from the rate in effect on the date under the existing scheduleor formula.
(4) A change from a variable rate plan to a fixed rate, orfrom a fix rate to a variable rate plan so long as the initial rate that wouldresult from such a change, as determined on the effective date of the change,or if the notice of the change is mailed or delivered to the borrower prior tothe effective date, as of any date within sixty (60) days before mailing ordelivery of the notice, will not be an increase from the rate in effect on thedate under the existing plan;
(5) A change from a daily periodic rate to a periodic rateother than daily or from a periodic rate other than daily to a daily periodicrate; and
(6) A change in the method of determining the outstandingunpaid indebtedness upon which interest is calculated (including, withoutlimitation, a change with respect to the date by which or the time periodwithin which a new balance or any portion of it must be paid to avoidadditional interest).
(d) The procedures for amendment by a credit card lender ofthe terms of a plan to which a borrower other than an individual borrower is aparty may, in lieu of the foregoing provisions of this section, be as theagreement governing the plan may otherwise provide.