15 U.S.C. § 1666h: Offset of cardholder’s…

Summary

A credit-card company cannot take money from a cardholder’s deposit account it holds to pay the card balance unless the cardholder already gave written permission under a credit plan that lets the company regularly deduct debts. The company also must not take any amount the cardholder is disputing if the cardholder asks it not to. For accounts already open on the law’s effective date, the written permission isn’t required until the account is renewed, but no later than one year after the effective date. Permission counts as given if the issuer previously warned the cardholder that using the card could let the issuer take funds it holds. State law still allows seizing or levying deposits if that remedy is generally available and constitutionally permitted.

Title 15, §1666h

Commerce and Trade, Source: USLM XML via OLRC

(a)Offset against consumer’s funds

A card issuer may not take any action to offset a cardholder’s indebtedness arising in connection with a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer unless—

(1)such action was previously authorized in writing by the cardholder in accordance with a credit plan whereby the cardholder agrees periodically to pay debts incurred in his open end credit account by permitting the card issuer periodically to deduct all or a portion of such debt from the cardholder’s deposit account, and

(2)such action with respect to any outstanding disputed amount not be taken by the card issuer upon request of the cardholder.

In the case of any credit card account in existence on the effective date of this section, the previous written authorization referred to in clause (1) shall not be required until the date (after such effective date) when such account is renewed, but in no case later than one year after such effective date. Such written authorization shall be deemed to exist if the card issuer has previously notified the cardholder that the use of his credit card account will subject any funds which the card issuer holds in deposit accounts of such cardholder to offset against any amounts due and payable on his credit card account which have not been paid in accordance with the terms of the agreement between the card issuer and the cardholder.

(b)Attachments and levies

This section does not alter or affect the right under State law of a card issuer to attach or otherwise levy upon funds of a cardholder held on deposit with the card issuer if that remedy is constitutionally available to creditors generally.

Editorial Notes

References in Text

For

Effective Date

of this section, referred to in subsec. (a), see

Effective Date

note set out under section 1666 of this title.

§1666h Offset of Cardholder’s Indebtedness by Issuer of Credit Card with Funds Deposited with Issuer by Cardholder; Remedies of Creditors Under State Law Not Affected

Summary

Title 15, §1666h

Notes & Related Subsidiaries

Editorial Notes

References in Text

Effective Date

Effective Date

Citations & Metadata