With the holidays fast approaching, debt collectors should keep in mind potential restrictions on making debt collection calls during this time. The federal Fair Debt Collection Practices Act (“FDCPA”) does not specifically prohibit collecting during the holidays. However, the FDCPA prohibits communicating with a consumer in connection with the collection of any debt “at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.” 15 U.S.C. § 1692c(a)(1). A number of states also have similar provisions. These provisions could operate to prohibit collection calls on “known” holidays, particularly if formalized as legal holidays or if a debtor has previously informed the debt collector not to contact the debtor on these days. The extent of “known” holidays may vary from locale to locale, as different states, regions and cultures may observe different holidays by law or custom.

If you require assistance in evaluating your debt collection practices for compliance with laws restricting holiday collections, please do not hesitate to contact us.

  • Mike Tomkies


The Federal Reserve Board yesterday finalized rules amending Regulation Z (Truth in Lending) and Regulation AA (Unfair Acts or Practices) aimed at improving the effectiveness of disclosures and prohibiting unfair or deceptive acts or practices relating to credit cards. The rules are effective July 1, 2010. Below is a discussion of the Regulation Z and AA rules.

The Board also (i) finalized rules amending Regulation DD (Truth in Savings) to address depository institutions’ disclosure practices related to overdrafts and (ii) proposed rules amending Regulation E (Electronic Fund Transfers) to provide consumers certain protections relating to the assessment of overdraft fees. The Regulation DD and E rules will be the subject of future Alerts.

Regulation Z

The Board finalized rules initially proposed in June 2007 and May 2008 that included changes to format, timing and content requirements for the five main types of open-end credit disclosures governed by Regulation Z: (1) credit and charge card application and solicitation disclosures; (2) account-opening disclosures; (3) periodic statement disclosures; (4) change-in-terms notices; and (5) advertising provisions. The Board also adopted rules regarding certain payment practices and other protections. Following is a summary of major changes to the rules:

Applications and Solicitations:

  • New format requirements for the summary table, including type size, boldface type and placement of information.
  • Revised content requirements, including disclosure of the duration of penalty rates, a shorter variable rate disclosure, descriptions when a grace period is offered on purchases or when no grace period is offered and a reference to consumer education materials on the Board’s Web site.

Account-Opening Disclosures:

  • New requirement to disclose certain key information in a summary table, which is substantially similar to the table required for credit card solicitations.
  • Different approach to disclosing fees that identifies fees to be disclosed in the summary table and others to be disclosed in writing or orally.

Periodic Statement Disclosures:

  • New requirement to itemize interest charges separately for different types of transactions, group interest charges and fees and provide separate totals of fees and interest for the month and year-to-date.
  • Elimination of the “effective APR” disclosure.
  • New disclosure (required by the Bankruptcy Act) of the effect of making only the minimum required payment on repayment of balances.

Changes in Terms:

  • Increased advance notice period (45 days) for changing terms, including a rate increase due to the consumer’s delinquency or default.
  • New requirement for tabular disclosure of key terms being changed to appear on the front of a periodic statement that accompanies a change-in-terms notice.

Advertising Provisions:

  • New requirement that advertisements stating a periodic payment amount also must state, in equal prominence, the time period required to pay the balance and the total of payments if only periodic payments are made.
  • Prohibition on referring to a rate as “fixed” unless (i) the advertisement specifies a time period for which the rate is fixed and the rate will not increase for any reason during that time or (ii) the rate will not increase for any reason while the plan is open.

Payment Practices:

  • In setting reasonable cut-off times for mailed payments, deeming 5 p.m. to be reasonable.
  • Requiring creditors that do not accept mailed payments on the due date (e.g., on weekend or holidays) to treat a mailed payment received the next business day as timely.

Other Protections:

  • Clarifying that advances that are separately underwritten generally are not open-end credit, but closed-end credit.

Regulation AA

The rules, which are substantially similar to rules adopted yesterday by the Office of Thrift Supervision, are summarized in our Alert dated December 18, 2008.

Please contact us with any questions or if you would like assistance with assessing your credit card practices and/or your credit card documents.

  • Judy Scheiderer and Margaret Stolar