21-012 Code Vt. R. 21-010-012-X
This regulation is promulgated pursuant to Title 9 V.S.A. § 43, for the purposes of promoting the informed use of consumer credit by requiring the inclusion of specific minimum contract terms in the cardholder agreement, in the furtherance of consumer protection. The ability of creditors to offer secured credits cards will make credit available to riskier borrowers who may not be eligible for unsecured credit cards or other unsecured credit. The following minimum contract terms shall apply to every credit cardholder agreement that is secured by a deposit account of a cardholder.
The terms of the cardholder agreement shall be written in clear, understandable language and easily read type and in a form the consumer may keep. All deposits required under the cardholder agreement shall be held in a federally insured account.
Cardholder means a natural person to whom a credit card is issued for consumer credit purposes, or a natural person who has agreed with the card issuer to pay consumer credit obligations arising from the issuance of a credit card to another natural person.
Card Issuer means a person that issues a credit card or that person's agent with respect to that card, and is the creditor that has agreed to extend credit to the cardholder in accordance with a credit card cardholder agreement.
Credit Card means any card, plate, or other single credit device that may be used from time to time to obtain credit.
Security Interest means an interest in the deposit account that secures performance of a consumer credit card obligation.
The cardholder agreement shall:
"You must maintain a deposit account as security for this credit card account, and shall grant us a security interest in this deposit account."
All contract terms relating to a secured credit card shall be provided to the cardholder prior to the activation of the credit card account.
This Regulation is effective on December 1, 1999. Lenders shall be obligated to comply with this regulation commencing 60 days after the effective date hereof.
If any provision of this Regulation, or the application of it to any person or circumstance, is determined to be invalid by a court of competent jurisdiction, such invalidity shall not affect other provisions of this regulation which can be given effect without the invalid provision or application, and to that end the provisions of this Regulation are severable.
21-012 Code Vt. R. 21-010-012-X