Cost of Borrowing (Trust and Loan Companies) Regulations

12 (1) A company that enters into a credit agreement for a credit card must provide the borrower with an initial disclosure statement that includes the following information in addition to that required by paragraphs 10(1)(a) and (c) to (k):

• (a) the manner in which interest is calculated and the information required by paragraph 11(1)(a);

• (b) if the borrower is required by the credit agreement to pay the outstanding balance in full on receiving a statement of account,

  • (i) mention of that requirement,

  • (ii) the grace period by the end of which the borrower must have paid that balance, and

  • (iii) the annual interest rate charged on any outstanding balance not paid when due;

• (c) if a lost or stolen credit card is used in an unauthorized manner, the maximum liability of the borrower is the lesser of $50 and the maximum set by the credit agreement;

• (d) if a transaction is entered into at an automated teller machine by using the borrower’s personal identification number, the liability incurred by the transaction is, despite paragraph (c), the maximum liability; and

• (e) if the company has received a report from the borrower, whether written or verbal, of a lost or stolen credit card, the borrower has no liability to pay for any transaction entered into through the use of the card after the receipt of the report.

(2) If the initial credit limit is not known when the initial disclosure statement is made, the company must disclose it in

• (a) the first statement of account provided to the borrower; or

• (b) a separate statement that the borrower receives on or before the date on which the borrower receives that first statement of account.

(3) Despite section 13, if a credit agreement for a credit card is amended, the company must, in writing and 30 days or more before the amendment takes effect, disclose to the borrower the changes to the information required to be disclosed in the initial statement other than any of those changes that involve

• (a) a change in the credit limit;

• (b) an extension to the grace period;

• (c) a decrease in non-interest charges or default charges referred to in paragraphs 10(1)(c) and (g);

• (d) a change concerning information about any optional service in relation to the credit agreement that is referred to in paragraph 10(1)(i);

• (e) a change in a variable interest rate referred to in subparagraph 11(1)(a)(ii) as a result of a change in the public index referred to in that subparagraph; and

• (f) a decrease in the fixed rate of interest or a decrease in the fixed percentage rate of interest referred to in subparagraph 11(1)(a)(ii).

(4) An amendment referred to in any of paragraphs (3)(a) to (d) or (f) must be disclosed not later than in the first subsequent periodic disclosure statement that is provided after the date of the amendment.

(5) Subject to subsections (8) and (9), a company that issues credit cards must provide borrowers with supplementary disclosure statements on a regular periodic basis, at least once a month, that disclose the information referred to in paragraphs 10(3)(a) and (d) to (h) and that, in addition, contain the following information:

• (a) an itemized statement of account that describes each transaction and discloses each amount credited or charged, including interest, and the dates when those amounts were posted to the account;

• (b) the amount that the borrower must pay, on or before a specified due date, in order to have the benefit of a grace period;

• (c) the sum for payments and the sum for purchases, credit advances and interest and non-interest charges;

• (d) subject to subsection (7), an estimate of the length of time in months and years that would be required to pay in full the outstanding balance set out in the supplementary disclosure statement, based on the assumption that

  • (i) the minimum payment set out in that statement and in each subsequent supplementary disclosure statement will be made on its corresponding due date,

  • (ii) the annual interest rate that applies on the date of the supplementary disclosure statement in respect of purchases of goods or services, or that, based on the information available on that date, is expected to apply in respect of such purchases after a period during which a promotional or special introductory interest rate applies, will be applied to the outstanding balance until it is paid,

  • (iii) the outstanding balance is rounded up to the nearest hundred dollars for the purpose of arriving at that estimate, and,

  • (iv) a year is considered to consist of not less than 360 days and not more than 366 days; and

• (e) if the annual interest rate that applies on the date of the supplementary disclosure statement, other than a variable interest rate referred to in subparagraph 11(1)(a)(ii) or an interest rate that has been disclosed to a borrower under subsection (3), could increase in the next period, the circumstances that would give rise to that increase and any new rate of interest that would apply in the next period as a result of the increase.

(6) For the purpose of paragraph (5)(a), an itemized statement of account is adequate if it permits the borrower to verify each transaction described by linking it with a transaction record provided to the borrower.

(7) The estimate referred to in paragraph (5)(d) is not required to be provided if the borrower is required to pay the outstanding balance in full on receiving a statement of account.

(8) The supplementary disclosure statement is not required to be provided for a period during which there have been no advances or payments and

• (a) there is no outstanding balance at the end of the period; or

• (b) the borrower has notice that their credit agreement has been suspended or cancelled due to default and the company has demanded payment of the outstanding balance.

(9) The supplementary disclosure statement may be provided once in a three-month period, either in respect of that period or in respect of the last month of that period, if, during that period,

• (a) there have been no advances or payments;

• (b) there is an outstanding balance of less than $10; and

• (c) no interest or fee is being charged or accrued.