CONSUMER CREDIT COST DISCLOSURE

M.G.L. pt. Part I, tit. Title XX, ch. c. 140D

in effect

M.G.L. c. 140D, § 1 Definitions

c. 140D, § 1. Definitions Section 1. For the purpose of this chapter, the following words shall, unless the context indicates otherwise, have the following meanings: ''Accepted credit card'', any credit card which the cardholder has requested and received or has signed or has used, or authorized another to use, for the purpose of obtaining money, property, labor, or services on credit. ''Adequate notice'', a printed notice to a cardholder which sets forth the pertinent facts clearly and conspicuously so that a person against whom it is to operate could reasonably be expected to have noticed it and understood its meaning. Such notice may be given to a cardholder by printing the notice on any credit card, or on each periodic statement of account, issued to the cardholder, or by any other means reasonably assuring the receipt thereof by the cardholder. ''Advertisement'', a commercial message in any medium that promotes, directly or indirectly, a credit transaction. ''Agricultural products'', products relating to agricultural, horticultural, viticultural and dairy products, livestock, wildlife, poultry, bees, forest products, fish and shellfish, and any products thereof, including processed and manufactured products, and any and all products raised or produced on farms and any processed or manufactured products thereof. ''Agricultural purpose'', a purpose relating to the production, harvest, exhibition, marketing, transportation, processing, or manufacture of agricultural products by a natural person who cultivates, plants, propagates or nurtures those agricultural products, including but not limited to the acquisition of farmland, real property with a farm residence, and personal property and services used primarily in farming. ''Bureau'', the federal Bureau of Consumer Financial Protection. ''Cardholder'', any person to whom a credit card is issued or any person who has agreed with the card issuer to pay obligations arising from the issuance of a credit card to another person. ''Card issuer'', any person who issues a credit card, or the agent of such person with respect to such card. ''Commissioner'', the commissioner of banks. ''Consumer'', used as an adjective, with reference to a credit transaction, characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property, or services which are the subject of the transactions are primarily for personal, family, or household purposes. ''Credit'', the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment. ''Credit card'', any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit. ''Creditor'', a person who both (1) regularly extends, whether in connection with loans, sales or property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement. Notwithstanding the preceding sentence, in the case of an open-end credit plan involving a credit card, the card issuer and any person who honors the credit card and offers a discount which is a finance charge is a creditor. For the purposes of the requirements imposed under this chapter, the term ''creditor'' shall also include card issuers whether or not the amount due is payable by agreement in more than four installments or the payment of a finance charge is or may be required, and the commissioner shall, by regulation, apply these requirements to such card issuers, to the extent appropriate, even though the requirements are by their terms applicable only to creditors offering open-end credit plans. ''Credit sale'', any sale in which the seller is a creditor. The term includes any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the property and services involved and it is agreed that the bailee or lessee will become, or for no other or a nominal consideration has the option to become, the owner of the property upon full compliance with his obligations under the contract. ''Discount'', a reduction made from the regular price. The term ''discount'' shall not mean a surcharge. ''Dwelling'', a residential structure or mobile home which contains one to four family housing units, or individual units of condominiums or cooperatives. ''Material disclosure'', the disclosure, as required by this chapter, of the annual percentage rate, the method of determining the finance charge and the balance upon which a finance charge will be imposed, the amount of the finance charge, the amount to be financed, the total of payments, the number and amount of payments, and the due dates or periods of payments scheduled to repay the indebtedness. ''Open-end-credit plan'', a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open-end-credit plan within the meaning of the preceding sentence is an open-end-credit plan even if credit information is verified from time to time. ''Organization'', a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative, or association. ''Person'', a natural person or an organization. ''Regular price'', the tag or posted price charged for the property or service if a single price is tagged or posted, or the price charged for the property or service when payment is made by use of an open-end-credit plan or credit card if either (1) no price is tagged or posted, or (2) two prices are tagged or posted, one of which is charged when payment is made by use of an open-end-credit plan or credit card and the other when payment is made by use of cash, check, or similar means. For purposes of this definition, payment by check, draft or other negotiable instrument which may result in the debiting of an open-end-credit plan or a credit card holder's open end account shall not be considered payment by use of the plan or the account. ''Residential mortgage transaction'', a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling. ''Surcharge'', any means of increasing the regular price to a cardholder which is not imposed upon customers paying by cash, check or similar means. ''Unauthorized use'', a use of a credit card by a person other than the cardholder who does not have actual, implied, or apparent authority for such use and from which the cardholder receives no benefit. Any reference to any requirement imposed under this chapter or any provision thereof includes reference to the regulations of the commissioner of banks under this chapter or the provision thereof in question. The disclosure of an amount or percentage which is greater than the amount or percentage required to be disclosed under this chapter does not in itself constitute a violation of this chapter.

M.G.L. c. 140D, § 2 Exempt transactions

c. 140D, § 2. Exempt transactions Section 2. This chapter shall not apply to the following: (a) Credit transactions involving extensions of credit primarily for business, commercial, or agricultural purposes, or to government or governmental agencies or instrumentalities, or to organizations. (b) Transactions in securities or commodities accounts with a broker-dealer registered with the Securities and Exchange Commission. (c) Credit transactions, other than those in which a security interest is or will be acquired in real property, or in personal property used or expected to be used as the principal dwelling of the consumer, in which the total amount financed exceeds twenty-five thousand dollars. (d) Transactions under public utility tariffs, if the commissioner determines that the public utilities commission regulates the charges for such public utility services involved, the charges for delayed payment, and any discount allowed for early payment. (e) Loans made, insured, or guaranteed pursuant to a program authorized by 20 USC 1070, et seq. of Title IV of the Higher Education Act of 1965.

M.G.L. c. 140D, § 3 Rules and regulations

c. 140D, § 3. Rules and regulations Section 3. (a) The commissioner shall prescribe from time to time such rules and regulations as may be necessary or proper in carrying out the provisions of this chapter. Such rules and regulations may contain such classifications, differentiations or other provisions, and may provide for such adjustments and exceptions for any class of transactions, as in the judgement of the commissioner are necessary or proper to carry out the purposes of this chapter, to prevent circumvention or evasion thereof, or to facilitate compliance therewith; provided, however, that no such rule or regulation shall contain any classification, differentiation or other provision with respect to, or provide for any judgement or exception for, any class of transaction which would result in less stringent disclosure requirements than afforded that class of transaction under the Federal Consumer Protection Act and Regulation Z issued by the bureau. If a provision of the federal Truth in Lending Act, 15 U.S.C. section 1601 et seq., the bureau's Regulation Z, 12 C.F.R. section 1026 et seq., the official staff commentary or a disclosure or model form provided by a creditor thereunder is in conflict with a provision of this chapter or 209 CMR 32.00 et seq. and if the commissioner does not deem said federal provision to be substantially less consumer protective, the commissioner may waive, in writing, the provision of this chapter or 209 CMR 32.00 et seq. The waiver shall be filed with the state secretary and shall, unless otherwise provided by law, become effective on the sixtieth day following the date of the filing. A copy of the waiver shall be filed simultaneously with the house and senate chairs of the joint committee on financial services. Creditors in the commonwealth shall comply with the federal Truth in Lending Act, 15 U.S.C. section 1601 et seq., and regulations implemented by the bureau unless and until the commissioner promulgates regulations that are substantially similar to or afford more protection to consumers than those issued by the bureau. (b) The commissioner may issue from time to time advisory rulings under section eight of chapter thirty A<\/centy>;00004;;LQ;MAST30AS8;1000042;<\/centr> interpreting any provision or the regulations issued hereunder. Each official bureau interpretation or official staff interpretation that interprets a provision of the regulations issued under the Truth-in-Lending Act (15 USC 1601 et seq.) (Title VI of Public Law 96–221) that is similar in substance to a provision of this chapter or the regulation issued thereunder, shall, until rescinded by the bureau, be deemed by the commissioner to be an advisory ruling issued under said section eight of said chapter thirty A;<\/centy>;00007;;LQ;MAST30AS8;1000042;<\/centr> provided, however, that the commissioner may reject a bureau or staff interpretation.

M.G.L. c. 140D, § 4 Finance charge; determination

c. 140D, § 4. Finance charge; determination Section 4. (a) Except as otherwise provided in this section, the amount of the finance charge in connection with any consumer credit transaction shall be determined as the sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit. The finance charge does not include charges of a type payable in a comparable cash transaction. Charges which are included in the finance charge include any of the following types of charge or similar charge which are applicable. (1) Interest, time price differential, and any amount payable under a point, discount, or other system of additional charges. (2) Service or carrying charge. (3) Loan fee, finder's fee, or similar charge. (4) Fee for an investigation or credit report. (5) Premium or other charge for any guarantee or insurance protecting the creditor against the obligor's default or other credit loss. (6) Borrower-paid mortgage broker fees, including fees paid to the broker or to the lender for delivery to the broker, whether such fees are paid in cash or financed. (b) Charges or premiums for credit life, accident, health, or involuntary unemployment insurance written in connection with any consumer credit transaction shall be included in the finance charge unless: (1) the coverage of the debtor by the insurance is not a factor in the approval by the creditor of the extension of credit, and this fact is clearly disclosed in writing to the person applying for or obtaining the extension of credit; and (2) in order to obtain the insurance in connection with the extension of credit, the person to whom the credit is extended must give specific affirmative written indication of his desire to do so after written disclosure to him of the cost thereof. (c) Charges or premiums for insurance, written in connection with any consumer credit transaction, against loss of or damage to property or against liability arising out of the ownership or use of property, shall be included in the finance charge unless a clear and specific statement in writing is furnished by the creditor to the person to whom the credit is extended, setting forth the cost of the insurance if obtained from or through the creditor, and stating that the person to whom the credit is extended may choose the person through which the insurance is to be obtained. (d) If any of the following items is itemized and disclosed in accordance with the regulations of the commissioner in connection with any transaction, then the creditor need not include that item in the computation of the finance charge with respect to that transaction: (1) Fees and charges prescribed by law which actually are or will be paid to public officials for determining the existence of or for perfecting or releasing or satisfying any security related to the credit transaction. (2) The premium payable for any insurance in lieu of perfecting any security interest otherwise required by the creditor in connection with the transaction, if the premium does not exceed the fees and charges described in clause (1) of this subsection which would otherwise be payable. (3) Any tax levied on security instruments or on documents evidencing indebtedness if the payment of such taxes is a precondition for recording the instrument securing the evidence of indebtedness. (e) The following items, when charged in connection with any extension of credit secured by an interest in real property, shall not be included in the computation of the finance charge with respect to that transaction: (1) Fees or premiums for title examination, title insurance, or similar purposes. (2) Fees for the preparation of loan-related documents. (3) Escrows for future payments of taxes and insurance. (4) Fees for notarizing deeds and other documents. (5) Appraisal fees, including fees related to any pest infestation or flood hazard inspections conducted prior to closing. (6) Credit reports. (7) Fees and amounts imposed by third party closing agents including settlement agents, attorneys and escrow and title companies, if the creditor does not require the imposition of such fees and amounts or the services provided and does not retain said fees and amounts. (f) In connection with credit transactions not under an open end credit plan that are secured by real property or a dwelling, the disclosure of the finance charge and other disclosures affected by any finance charge— (1) shall be treated as being accurate for the purposes of this chapter if the amount disclosed as the finance charge— (a) does not vary from the actual finance charge by more than one hundred dollars; or (b) is greater than the amount required to be disclosed under this chapter; and (2) shall be treated as being accurate for the purposes of section ten if:— (a) except as provided in subsection (b), the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to one-half of one percent of the total amount of credit extended; or (b) in the case of a transaction, other than a mortgage referred to in section 1602(aa) of 15 USC 1601 et seq., which: (i) is a refinancing of the principal balance due and any accrued and unpaid finance charges of a residential mortgage transaction as defined in section one of this chapter, or is any subsequent refinancing of such a transaction; and (ii) does not provide any new consolidation or new advance if the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to one percent of the total amount of credit extended.

M.G.L. c. 140D, § 5 Annual percentage rate; determination

c. 140D, § 5. Annual percentage rate; determination Section 5. (a) The annual percentage rate applicable to any extension of consumer credit shall be determined in accordance with the regulations of the commissioner. (1) In the case of any extension of credit other than an open-end-credit plan, as (A) that nominal annual percentage rate which will yield a sum equal to the amount of the finance charge when it is applied to the unpaid balances of the amount financed, calculated according to the actuarial method of allocating payments made on a debt between the amount financed and the amount of the finance charge, pursuant to which a payment is applied first to the accumulated finance charge and the balance is applied to the unpaid amount financed; or (B) the rate determined by any method prescribed by the commissioner as a method which materially simplifies computation while retaining reasonable accuracy as compared with the rate determined under subclause (A). (2) In the case of an extension of credit under an open-end-credit plan, as the quotient, expressed as a percentage, of the total finance charge for the period to which it relates divided by the amount upon which the finance charge for that period is based, multiplied by the number of such periods in a year. (b) Where a creditor imposes the same finance charge for balances within a specified range, the annual percentage rate shall be computed on the median balance within the range, except that if the commissioner determines that a rate so computed would not be meaningful, or would be materially misleading, the annual percentage rate shall be computed on such other basis as the commissioner may by regulation require. (c) The disclosure of an annual percentage rate is accurate for the purpose of this chapter if the rate disclosed is within a tolerance not greater than one-eighth of one per centum more or less than the actual rate or rounded to the nearest one-fourth of one per centum. The commissioner may allow a greater tolerance to simplify compliance where irregular payments are involved. (d) The commissioner may authorize the use of rate tables or charts which may provide for the disclosure of annual percentage rates which vary from the rate determined in accordance with subclause (A) of clause (1) of subsection (a) by not more than such tolerances as the commissioner may allow. The commissioner may not allow a tolerance greater then eight percentum of that rate except to simplify compliance where irregular payments are involved. (e) In the case of creditors determining the annual percentage rate in a manner other than as described in subsection (d), the commissioner may authorize other reasonable tolerances.

M.G.L. c. 140D, § 6 Inaccurate disclosure of finance charge or annual percentage rate; adjustment

c. 140D, § 6. Inaccurate disclosure of finance charge or annual percentage rate; adjustment Section 6. (1) In carrying out the enforcement provisions of this chapter, or any rule or regulation issued thereunder, the commissioner, in cases where an annual percentage rate or finance charge was inaccurately disclosed, shall notify the creditor of such disclosure error and is authorized in accordance with the provisions of this section to require the creditor to make an adjustment to the account of the person to whom credit was extended, to assure that such person will not be required to pay a finance charge in excess of the finance charge actually disclosed or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower. For the purposes of this section, except where such disclosure error resulted from a willful violation which was intended to mislead the person to whom credit was extended, in determining whether a disclosure error has occurred and in calculating any adjustment, (A) the commissioner shall apply (i) with respect to the annual percentage rate, a tolerance of one-quarter of one per cent more or less than the actual rate, determined without regard to subsection (c) of section five, and (ii) with respect to the finance charge, a corresponding numerical tolerance as generated by the tolerance provided under this section for the annual percentage rate; except that (B) with respect to transactions consummated after April first, nineteen hundred and eighty-two, the commissioner shall apply (i) for transactions that have a scheduled amortization of ten years or less, with respect to the annual percentage rate, a tolerance not to exceed one-quarter of one per cent more or less than the actual rate, determined without regard to said subsection (c) of section five, but in no event a tolerance of less than the tolerances allowed under said subsection (c), (ii) for transactions that have a scheduled amortization of more than ten years, with respect to the annual percentage rate, only such tolerances as are allowed under said subsection (c), and (iii) for all transactions, with respect to the finance charge, a corresponding numerical tolerance as generated by the tolerances provided under this section for the annual percentage rate. (2) The commissioner shall require such an adjustment when it is determined that such disclosure error resulted from (A) a clear and consistent pattern or practice of violations, (B) gross negligence, or (C) a willful violation which was intended to mislead the person to whom the credit was extended. Except where such disclosure error resulted from a willful violation which was intended to mislead the person to whom credit was extended, the commissioner need not require such an adjustment if he determines that such disclosure error: (A) resulted from an error involving the disclosure of a fee or charge that would otherwise be excludable in computing the finance charge, including but not limited to violations involving the disclosures described in subsections (b), (c) and (d) of section four, in which event the commissioner may require such remedial action as he determines to be equitable, except that for transactions consummated after April first, nineteen hundred and eighty-two, such an adjustment shall be ordered for violations of subsection (b) of section four; (B) involved a disclosed amount which was ten per centum or less of the amount that should have been disclosed and (i) in cases where the error involved a disclosed finance charge, the annual percentage rate was disclosed correctly, and (ii) in cases where the error involved a disclosed annual percentage rate, the finance charge was disclosed correctly; in which event the commissioner may require such adjustment as he determines to be equitable; (C) involved a total failure to disclose either the annual percentage rate or the finance charge, in which event the commissioner may require such adjustment as he determines to be equitable; or (D) resulted from any other unique circumstance involving clearly technical and nonsubstantive disclosure violations that do not adversely affect information provided to the consumer and that have not misled or otherwise deceived the consumer. In the case of other such disclosure errors, the commissioner may require such an adjustment. (3) Notwithstanding the provisions of subsection (2): (A) the commissioner shall require the full adjustment, but permit the creditor to make the required adjustment in partial payments over an extended period of time which the commissioner considers to be reasonable, if it would have a significant adverse impact upon the safety or soundness of the creditor, (B) no adjustment shall be ordered if the amount of the adjustment would be less than one dollar, or (C) no adjustment shall be ordered except where such disclosure error resulted from a willful violation which was intended to mislead the person to whom credit was extended, as follows: (i) except in connection with violations arising from practices identified in the current examination and only in connection with transactions that are consummated after the date of the immediately preceding examination, except that where practices giving rise to violations identified in earlier examination have not been corrected, adjustments for those violations shall be required in connection with transactions consummated after the date of the examination in which such practices were first identified; and (ii) in no event four years after the cause of action accrues. (4) A creditor shall not be subject to an order to make an adjustment, if within sixty days after discovering a disclosure error, whether pursuant to a final written examination report or through the creditor's own procedures, the creditor notifies the person concerned of the error and adjusts the account so as to assure that such person will not be required to pay a finance charge in excess of the finance charge actually disclosed or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower.

M.G.L. c. 140D, § 7 Disclosure of information; multiple creditors or obligors; estimates

c. 140D, § 7. Disclosure of information; multiple creditors or obligors; estimates Section 7. (a) Subject to subsection (b), a creditor shall disclose to the person who is obligated on a consumer credit transaction the information required under this chapter. In a transaction involving more than one obligor, a creditor, except in a transaction under section ten, need not disclose to more than one of such obligors if the obligor given disclosure is a primary obligor. (b) If a transaction involves one creditor as defined in subsection (f) of section one, such creditor shall make the disclosures. If a transaction involves more than one creditor, only one creditor shall be required to make the disclosures. The commissioner shall by regulation specify which creditor shall make the disclosures. (c) The commissioner may provide by regulation that any portion of the information required to be disclosed by this chapter may be given in the form of estimates where the provider of such information is not in a position to know exact information. In the case of any consumer credit transaction, a portion of the interest on which is determined on a per diem basis and is to be collected upon the consummation of such transaction, any disclosure with respect to such portion of interest shall be deemed to be accurate for the purposes of this chapter if the disclosure is based on information actually known to the creditor at the time that the disclosure documents are being prepared for the consummation of the transaction. (d) The commissioner shall determine whether tolerances for numerical disclosures other than the annual percentage rate are necessary to facilitate compliance with this chapter, and if he determines that such tolerances are necessary to facilitate compliance, he shall by regulation permit disclosures within such tolerances.

M.G.L. c. 140D, § 8 Disclosure of information; clear and conspicuous statements

c. 140D, § 8. Disclosure of information; clear and conspicuous statements Section 8. (a) Information required by this chapter shall be disclosed clearly and conspicuously, in accordance with regulations of the commissioner. The terms annual percentage rate and finance charge shall be disclosed more conspicuously than other terms, data or information provided in connection with a transaction, except information relating to the identity of the creditor. Regulations of the commissioner need not require that disclosures pursuant to this chapter be made in the order set forth in this chapter and, except as otherwise provided, may permit the use of terminology different from that employed in this chapter if it conveys substantially the same meaning. (b) Any creditor may supply additional information or explanation with any disclosures required under this chapter, or regulations promulgated thereunder, except as provided under clause (1) of subsection (b) of section twelve.

M.G.L. c. 140D, § 9 Information rendered inaccurate

c. 140D, § 9. Information rendered inaccurate Section 9. If information disclosed in accordance with this chapter is subsequently rendered inaccurate as the result of any act, occurrence, or agreement subsequent to the delivery of the required disclosures, the inaccuracy resulting therefrom does not constitute a violation of this chapter.

M.G.L. c. 140D, § 10 Security interest in property used as dwelling; rescission; liability; application

c. 140D, § 10. Security interest in property used as dwelling; rescission; liability; application Section 10. (a) Except as otherwise provided in this section, in the case of any consumer credit transaction, including opening or increasing the credit limit for an open-end-credit plan, in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required by this chapter, whichever is later, by notifying the creditor, in accordance with regulations of the commissioner, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the commissioner, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the commissioner, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section. No finance or other charge shall begin to accrue on any such transaction until the termination of the rescission period provided for in this section. (b) When an obligor exercises his right to rescind under subsection (a), he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within twenty days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, down payment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor's obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impractical or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within twenty days after tender by the obligor, ownership of the property rests in the obligor without obligation on his part to pay for it. The procedures prescribed by this subsection shall apply except when otherwise ordered by a court. (c) Written acknowledgment of receipt of any disclosures required under this chapter, or any rule or regulation issued thereunder, by a person to whom information, forms, and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery thereof. (d) The commissioner may, if he finds that such action is necessary in order to permit homeowners to meet bona fide personal financial emergencies, prescribe regulations authorizing the modification or waiver of any rights created under this section to the extent and under the circumstances set forth in those regulations. (e)(1) This section shall not apply to: (A) a residential mortgage transaction as defined in section one; (B) a transaction which constitutes a refinancing or consolidation, with no new advances, of the principal balance then due and any accrued and unpaid finance charges of an existing extension of credit by the same creditor secured by an interest in the same property; (C) a transaction in which an agency of the commonwealth or any subdivision thereof, is the creditor; (D) advances under a preexisting open-end-credit plan if a security interest has already been retained or acquired and such advances are in accordance with a previously established credit limit for such plan. (f) An obligor's right of rescission shall expire four years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding that the information and forms required under this section or any other disclosures required under this chapter have not been delivered to the obligor, except that if (1) the commissioner institutes a proceeding to enforce the provisions of this section within four years after the date of consummation of the transaction, (2) the commissioner finds a violation of this section, and (3) the obligor's right to rescind is based in whole or in part on any matter involved in such proceeding, then the obligor's right of rescission shall expire four years after the date of consummation of the transaction or upon the earlier sale of the property, or upon the expiration of one year following the conclusion of the proceeding, or any judicial review or period for judicial review thereof, whichever is later. (g) In any action in which it is determined that a creditor has violated this section, in addition to rescission the court may award relief under section thirty-two not relating to the right to rescind. (h) An obligor shall have no rescission rights arising solely from the form of written notice used by the creditor to inform the obligor of the rights of the obligor under this section, if the creditor provided the obligor the appropriate form of written notice published and adopted by the commissioner, or a comparable written notice of the rights of the obligor, that was properly completed by the creditor, and otherwise complied with all other requirements of this section regarding notice. (i)(1) Notwithstanding the provisions of section thirty-five, and subject to the time period provided in subsection (f), in addition to any other right of rescission available under this section for a transaction, after the initiation of any judicial or nonjudicial foreclosure process on the primary dwelling of an obligor securing an extension of credit, the obligor shall have a right to rescind the transaction equivalent to other rescission rights provided by this section, if: (a) a mortgage broker fee is not included in the finance charge in accordance with the laws and regulations in effect at the time the consumer credit transaction was consummated; (b) the form of notice of rescission for the transaction is not the appropriate form of written notice published and adopted by the commissioner or a comparable written notice, and otherwise complied with all the requirements of this section regarding notice. (2) Notwithstanding the provisions of subsection (f) of section four, and subject to the time period provided in subsection (f) of this section, for the purposes of exercising any rescission rights after the initiation of any judicial or nonjudicial foreclosure process on the principal dwelling of the obligor securing an extension of credit, the disclosure of the finance charge and other disclosures affected by any finance charge shall be treated as being accurate for the purposes of this section if the amount disclosed as the finance charge does not vary from the actual finance charge by more than thirty-five dollars or is greater than the amount required to be disclosed under this chapter. (3) Nothing in this section shall be construed so as to affect a consumer's right of recoupment under the laws of the commonwealth. (4) The provisions of this subsection shall apply to all consumer credit transactions in existence or consummated on or after September thirtieth, nineteen hundred and ninety-five.

M.G.L. c. 140D, § 11 Disclosure; open end credit plans; statement; contents

c. 140D, § 11. Disclosure; open end credit plans; statement; contents Section 11. (a) Before opening any account under an open end consumer credit plan, the creditor shall disclose to the person to whom credit is to be extended each of the following items, to the extent applicable: (1) The conditions under which a finance charge may be imposed, including the time period, if any, within which any credit extended may be repaid without incurring a finance charge, except that the creditor may, at his election and without disclosure, impose no such finance charge if payment is received after the termination of such time period. If no such time period is provided, the creditor shall disclose such fact. (2) The method of determining the balance upon which a finance charge will be imposed. (3) The method of determining the amount of the finance charge, including any minimum or fixed amount imposed as a finance charge. (4) Where one or more periodic rates may be used to compute the finance charge, each such rate, the range of balances to which it is applicable, and the corresponding nominal annual percentage rate determined by multiplying the periodic rate by the number of periods in a year. (5) Identification of other charges which may be imposed as part of the plan, and their method of computation, in accordance with regulations of the commissioner. (6) In cases where the credit is or will be secured, a statement that a security interest has been or will be taken in (A) the property purchased as part of the credit transaction, or (B) property not purchased as part of the credit transaction identified by item or type. (7) A statement in a form prescribed by regulations of the commissioner of the protection provided by section twenty-nine, and rules and regulations issued thereunder, to an obligor and the creditor's responsibilities under said section twenty-nine, and rules and regulations issued thereunder. With respect to one billing cycle per calendar year, at intervals of not less than six months or more than eighteen months the creditor shall transmit a statement to each obligor to whom the creditor is required to transmit a statement pursuant to subsection (b) for such billing cycle. (b) The creditor of any account under an open end consumer credit plan shall transmit to the obligor, for each billing cycle at the end of which there is an outstanding balance in that account or with respect to which a finance charge is imposed, a statement setting forth each of the following items to the extent applicable: (1) The outstanding balance in the account at the beginning of the statement period. (2) The amount and date of each extension of credit during the period, and a brief identification, on or accompanying the statement of each extension of credit in a form prescribed by the commissioner sufficient to enable the obligor either to identify the transaction or to relate it to copies of sales vouchers or similar instruments previously furnished, except that a creditor's failure to disclose such information in accordance with this clause shall not be deemed a failure to comply with this chapter if (A) the creditor maintains procedures reasonably adapted to procure and provide such information, and (B) the creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under section twenty-nine and regulations promulgated thereunder. In the case of any transaction in which the creditor and seller are the same person and such person's open-end-credit plan has fewer than fifteen thousand accounts, the creditor may elect to provide only the amount and date of each extension of credit during the period and the seller's name and location where the transaction took place if (A) a brief identification of the transaction has been previously furnished, and (B) the creditor responds to and treats any inquiry for clarification or documentation as a billing error and an erroneously billed amount under section twenty-nine and regulations promulgated thereunder. (3) The total amount credited to the account during the period. (4) The amount of any finance charge added to the account during the period, itemized to show the amounts, if any, due to the application of percentage rates and the amount, if any imposed as a minimum or fixed charge. (5) Where one or more periodic rates may be used to compute the finance charge, each such rate, the range of balances to which it is applicable, and, unless the annual percentage rate, determined under clause (2) of subsection (a) of section five is required to be disclosed pursuant to clause (6) of subsection (b) the corresponding annual percentage rate determined by multiplying the periodic rate by the number of periods in a year. (6) Where the total finance charge exceeds fifty cents for a monthly or longer billing cycle, or the pro rata part of fifty cents for a billing cycle shorter than monthly, the total finance charge expressed as an annual percentage rate, determined under clause (2) of subsection (a) of section five, except that if the finance charge is the sum of two or more products of a rate times a portion of the balance, the creditor may, in lieu of disclosing a single rate for the total charge, disclose each such rate expressed as an annual percentage rate, and the part of the balance to which it is applicable. (7) The balance on which the finance charge was computed and a statement of how the balance was determined. If the balance is determined without first deducting all credits during the period, that fact and the amount of such payments shall also be disclosed. (8) The outstanding balance in the account at the end of the period. (9) The date by which or the period, if any, within which, payment must be made to avoid additional finance charges, except that the creditor may, at his election and without disclosure, impose no such additional finance charge if payment is received after such date or the termination of such period. (10) The address to be used by the creditor for the purpose of receiving billing inquiries from the obligor.

M.G.L. c. 140D, § 12 Disclosure; other than open-end-credit plans; statement; contents

c. 140D, § 12. Disclosure; other than open-end-credit plans; statement; contents Section 12. (a) For each consumer credit transaction other than under an open-end-credit plan, the creditor shall disclose each of the following items, to the extent applicable: (1) The identity of the creditor required to make disclosure. (2)(A) The ''amount financed'', using that term, which shall be the amount of credit of which the consumer has actual use. This amount shall be computed as follows, but the computations need not be disclosed and shall not be disclosed with the disclosures conspicuously segregated in accordance with clause (1) of subsection (b): (i) take the principal amount of the loan or the cash price less downpayment and trade-in; (ii) add any charges which are not part of the finance charge or of the principal amount of the loan and which are financed by the consumer, including the cost of any items excluded from the finance charge pursuant to section four; and (iii) subtract any charges which are part of the finance charge but which will be paid by the consumer before or at the time of the consummation of the transaction, or have been withheld from the proceeds of the credit. (B) In conjunction with the disclosure of the amount financed, a creditor shall provide a statement of the consumer's right to obtain, upon a written request, a written itemization of the amount financed. The statement shall include spaces for a ''yes'' and ''no'' indication to be initialed by the consumer to indicate whether the consumer wants a written itemization of the amount financed. Upon receiving an affirmative indication, the creditor shall provide, at the time other disclosures are required to be furnished, a written itemization of the amount financed. For the purposes of this subclause, ''itemization of the amount financed'' means a disclosure of the following items, to the extent applicable: (i) the amount that is or shall be paid directly to the consumer; (ii) the amount that is or shall be credited to the consumer's account to discharge obligation owed to the creditor; (iii) each amount that is or shall be paid to third persons by the creditor on the consumer's behalf, together with an identification of or reference to the third person; and (iv) the total amount of any charges described in subclause (iii) of clause (A) of paragraph (2). (3) The ''finance charge'', not itemized, using that term. (4) The finance charge expressed as an ''annual percentage rate'', using that term. (5) The sum of the amount financed and the finance charge, which shall be termed the ''total of payments''. (6) The number, amount, and due dates or period of payments scheduled to repay the total of payments. (7) In a sale of property or services in which the seller is the creditor required to disclose pursuant to subsection (b) of section seven, the ''total sale price'', using that term, which shall be the total of the cash price of the property or services, additional charges, and the finance charge. (8) Descriptive explanations of the terms ''amount financed'', ''finance charge'', ''annual percentage rate'', ''total of payments'', and ''total sale price'' as specified by the commissioner. The descriptive explanation of ''total sale price'' shall include reference to the amount of the downpayment. (9) Where the credit is secured, a statement that a security interest has been taken in (A) the property which is purchased as part of the credit transaction, or (B) property not purchased as part of the credit transaction identified by item or type. (10) Any dollar charge or percentage amount which may be imposed by a creditor solely on account of a late payment, other than a deferral or extension charge. (11) A statement indicating whether or not the consumer is entitled to a rebate of any finance charge upon refinancing or prepayment in full pursuant to acceleration or otherwise, if the obligation involves a precomputed finance charge. A statement indicating whether or not a penalty will be imposed in those same circumstances if the obligation involves a finance charge computed from time to time by application of a rate to the unpaid principal balance. (12) A statement that the consumer should refer to the appropriate contract document for any information such document provides about nonpayment, default, the right to accelerate the maturity of the debt, and prepayment rebates and penalties. (13) In any residential mortgage transaction, a statement indicating whether a subsequent purchaser or assignee of the consumer may assume the debt obligation on its original terms and conditions. (b)(1) Except as otherwise provided in this chapter, the disclosures required under subsection (a) shall be made before the credit is extended. Except for the disclosures required by clause (1) of subsection (a), all disclosures required under subsection (a) and any disclosure provided for in subsection (b), (c), or (d) of section four shall be conspicuously segregated from all other terms, data, or information provided in connection with a transaction, including any computations or itemization. (2) In the case of a residential mortgage transaction, as defined in section one, which is also subject to the Real Estate Settlement Procedures Act 12 USC 2601 et seq, good faith estimates of the disclosures required under subsection (a) shall be made in accordance with regulations of the commissioner under subsection (c) of section seven before the credit is extended, or shall be delivered or placed in the mail not later than three business days after the creditor receives the consumer's written application, whichever is earlier. If the disclosure statement furnished within three days of the written application contains an annual percentage rate which is subsequently rendered inaccurate within the meaning of subsection (c) of section five, the creditor shall furnish another statement at the time of settlement or consummation. (c)(1) If a creditor receives a purchase order by mail or telephone without personal solicitation, and the cash price and total sale price and the terms of financing, including the annual percentage rate, are set forth in the creditor's catalog or other printed material distributed to the public, then the disclosures required under subsection (a) may be made at any time not later than the date the first payment is due. (2) If a creditor receives a request for a loan by mail or telephone without personal solicitation and the terms of financing, including the annual percentage rate for representative amounts of credit, are set forth in the creditor's printed material distributed to the public, or in the contract of loan or other printed material delivered to the obligor, then the disclosures required under subsection (a) may be made at any time not later than the date the first payment is due. (d) If a consumer credit sale is one of a series of consumer credit sales transactions made pursuant to an agreement providing for the addition of the deferred payment price of that sale to an existing outstanding balance, and the person to whom the credit is extended has approved in writing both the annual percentage rate or rates and the method of computing the finance charge or charges, and the creditor retains no security interest in any property as to which he has received payments aggregating the amount of the sales price including any finance charges attributable thereto, then the disclosure required under subsection (a) for the particular sale may be made at any time not later than the date the first payment for that sale is due. For the purposes of this subsection, in the case of items purchased on different dates, the first purchased shall be deemed first paid for, and in the case of items purchased on the same date, the lowest priced shall be deemed first paid for.

M.G.L. c. 140D, § 14 Multiple-page advertisements; contents; open-end-credit plan

c. 140D, § 14. Multiple-page advertisements; contents; open-end-credit plan Section 14. (a) For the purposes of this chapter, or rules or regulations issued thereunder, a catalog or other multiple-page advertisement shall be considered a single advertisement if it clearly and conspicuously displays a credit terms table on which the information required to be stated under this chapter is clearly set forth. (b) No advertisement to aid, promote, or assist directly or indirectly any extension of consumer credit may state: (1) That a specific periodic consumer credit amount or installment amount can be arranged, unless the creditor usually and customarily arranges credit payments or installments for that period and in that amount; (2) That a specified down payment is required in connection with any extension of consumer credit, unless the creditor usually and customarily arranges down payments in that amount. (c) No advertisement to aid, promote, or assist directly or indirectly the extension of consumer credit under an open-end-credit plan may set forth any of the specific terms of that plan unless it also clearly and conspicuously sets forth all of the following items: (1) Any minimum or fixed amount which could be imposed. (2) In any case in which periodic rates may be used to compute the finance charge, the periodic rates expressed as annual percentage rates.

M.G.L. c. 140D, § 15 Advertisements; other than open-end-credit plans; contents

c. 140D, § 15. Advertisements; other than open-end-credit plans; contents Section 15. (a) Except as provided in subsection (b), this section applies to any advertisement to aid, promote, or assist directly or indirectly any consumer credit sale, loan, or other extension of credit subject to the provisions of this chapter, other than an open-end-credit plan. (b) The provisions of this section shall not apply to advertisements of residential real estate except to the extent that the commissioner may by regulation require. (c) If any advertisement to which this section applies states the rate of finance charge, the advertisement shall state the rate of that charge expressed as an annual percentage rate. (d) If any advertisement to which this section applies states the amount of the down payment, if any, the amount of any installment payment, the dollar amount of any finance charge, or the number of installments or the period of repayment, then the advertisement shall state all of the following items: (1) The down payment, if any; (2) The terms of repayment; and (3) The rate of the finance charge expressed as an annual percentage rate.

M.G.L. c. 140D, § 15A Application form or pre-approved written solicitation for open-end credit plan; contents

c. 140D, § 15A. Application form or pre-approved written solicitation for open-end credit plan; contents Section 15A. Any application form or pre-approved written solicitation for an open-end credit plan and any printed advertisement which contains such application form or pre-approved written solicitation which is mailed or distributed on or after July first, nineteen hundred and eighty-eight, to a consumer residing in the commonwealth by or on behalf of a card issuer, whether such issuer is located within or without the commonwealth, and which is intended to aid, promote or assist directly or indirectly in the issuance of a credit card by any issuer, shall prominently disclose in easily understood language: the current annual percentage rate for finance charges and, if the rate may vary, a statement to that effect and of the circumstances under which the rate may increase and whether there are any limitations on any such increase, as well as the effects of any such increase; the conditions under which a finance charge may be imposed, including the time period within which any credit extended may be repaid without incurring a finance charge; whether any annual fee is charged and the amount of any such fee; and whether any other charges or fees may be assessed, the purposes for which they are assessed, and the amounts of any such charges or fees. The card issuer may submit examples of application forms, pre-approved written solicitations, and printed advertisements containing such application forms and pre-approved written solicitations to the commissioner for a determination as to whether they satisfy the requirements of this section. Approval by the commissioner shall constitute prima facie evidence of compliance with this section.

M.G.L. c. 140D, § 16 Liability of owner or personnel of advertising medium

c. 140D, § 16. Liability of owner or personnel of advertising medium Section 16. There shall be no liability under this chapter on the part of any owner or personnel, as such, of any medium in which an advertisement appears or through which it is disseminated.

M.G.L. c. 140D, § 17 Oral response to cost of credit inquiry

c. 140D, § 17. Oral response to cost of credit inquiry Section 17. In responding orally to any inquiry about the cost of credit, a creditor, regardless of the method used to compute finance charges, shall state rates only in terms of the annual percentage rate, except that in the case of an open-end-credit plan, the periodic rate also may be stated and, in the case of an other than open-end-credit plan where a major component of the finance charge consists of interest computed at a simple annual rate, the simple annual rate also may be stated. The commissioner may, by regulation, provide an exception from this section for a transaction or class of transactions for which the creditor cannot determine in advance the applicable annual percentage rate.

M.G.L. c. 140D, § 18 Model disclosure forms and clauses

c. 140D, § 18. Model disclosure forms and clauses Section 18. The use of model disclosure forms and clauses for common transactions to facilitate compliance with the disclosure requirements and to aid and assist the borrower in understanding the transaction by utilizing readily understandable language to simplify the technical nature of the disclosures, issued by the bureau, shall be deemed to be in compliance with the provisions of this chapter. Nothing in this section may be construed to require a creditor to use any such model form or clause. A creditor shall be deemed to be in compliance with the disclosure provisions of this chapter with respect to other than numerical disclosures if the creditor (1) uses any appropriate model form or clause as published by the bureau, or (2) uses any such model form or clause and changes it by (A) deleting any information that is not required by this chapter, or (B) rearranging the format, if in making such deletion or rearranging the format, the creditor does not affect the substance, clarity or meaningful sequence of the disclosure.

M.G.L. c. 140D, § 19 Time for sending statement; noncompliance; finance charge

c. 140D, § 19. Time for sending statement; noncompliance; finance charge Section 19. (a) The creditor shall mail or deliver to the customer the statement or statements required by subsection (b) of section eleven for each billing cycle at least 14 days before the end of the next succeeding billing cycle or the payment due date, whichever is earlier. If the creditor fails to mail or deliver such statement or statements within the specified period, he shall not be entitled to any finance charge with respect to the next succeeding billing cycle based upon the balance of the preceding billing cycle. If any such finance charge is assessed or collected, the customer shall receive a credit or refund for any such finance charge assessed or collected other than in accordance with the provisions of this section within the two billing cycles following such assessment or collection, the failure to provide such credit or refund within the period specified shall subject the creditor to the penalties provided in section thirty-two. (b) Subsection (a) shall not apply in any case where a creditor has been prevented, delayed or hindered in making timely mailing or delivery of such periodic statement within the time period specified in said subsection because of an act of God, war, natural disaster, strike or other excusable or justifiable cause, as determined by the commissioner.

M.G.L. c. 140D, § 20 Sale of goods or services at retail; finance charge under open-end-credit plan; computation

c. 140D, § 20. Sale of goods or services at retail; finance charge under open-end-credit plan; computation Section 20. If a finance charge is imposed under an open-end credit plan on balances resulting from the sale of goods or services at retail made in reliance on a credit card, the finance charge applicable to said balances for any cycle shall be computed on (i) the previous balance after deducting all payments on account received by the creditor during the cycle and all credits to the account during the cycle applicable to any sale reflected in the previous balance; or (ii) the average daily balance determined by adding the daily balances on the account for each day in the billing cycle and dividing the total by the number of days in the billing cycle; or (iii) daily balances; provided, however, that no finance charge may be computed on any new sale reflected for the first time in the account during the billing cycle if there was no balance outstanding in the account at the beginning of the cycle, or if such balance is solely attributable to a finance charge assessed with respect to the preceding billing cycle, or if the sum of all payments received by the creditor during the cycle and all credits to the account applicable to any balance outstanding at the beginning of the cycle is equal to or exceeds the amount of such balance outstanding.

M.G.L. c. 140D, § 21 Application of credit cardholder's funds held by issuer; authorization; agreement statement

c. 140D, § 21. Application of credit cardholder's funds held by issuer; authorization; agreement statement Section 21. A person issuing a credit card shall not apply any funds of the cardholder held for any purpose by the issuer of the card in order to satisfy a debt arising from the use of such credit card unless such action was previously authorized by the cardholder in a separately signed agreement whereby the cardholder agrees to pay debts incurred in his open-end-credit account by permitting the card issuer to deduct periodically all or a portion of such debt from the cardholder's deposit account; provided, however, that such action shall not be taken with respect to a disputed item if the cardholder so requests. This agreement shall contain the following statement appearing conspicuously on the face thereof: YOU DO NOT HAVE TO SIGN THIS AGREEMENT IN ORDER TO OBTAIN A CREDIT CARD.

M.G.L. c. 140D, § 22 Credit balance exceeding one dollar; periodic statement disclosure; contents

c. 140D, § 22. Credit balance exceeding one dollar; periodic statement disclosure; contents Section 22. Whenever a credit balance equal to or in excess of one dollar is created in connection with a consumer credit transaction through (1) transmittal of funds to a creditor in excess of the total balance due on an account, (2) rebates of unearned finance charges or insurance premiums or (3) amounts otherwise owed to or held for the benefit of an obligor, the creditor shall: (a) credit the amount of the credit balance to the consumer's account; (b) refund any part of the amount of the remaining credit balance, upon request of the consumer; and (c) make a good faith effort to refund to the consumer by cash, check or money order any part of the amount of the credit balance remaining in the account for more than six months, within thirty days after the expiration of the six-month period, except that no further action is required in any case in which the consumer's current location is not known by the creditor and cannot be traced through the consumer's last known address or telephone number. Any creditor who does not make such a good faith effort to refund the credit balance, as required hereby, shall pay to the customer interest thereon at the annual percentage rate of eighteen per cent. In addition, the creditor of any open-end-credit plan shall disclose to the customer, in the periodic statement for the billing cycle at the end of which a credit balance first occurs and is due and owing to the customer, the amount of such credit balance. Unless the credit balance is previously reduced to less than one dollar by refunds or other charges to the account, the creditor shall further disclose, in at least two additional periodic statements for billing cycles within the six-month period following the closing of the billing cycle in which the credit balance first occurs and is due and owing to the customer, any credit balance equal to or in excess of one dollar at the end of such billing cycles. The creditor of such account shall clearly and conspicuously disclose to the customer in the periodic statement or in a statement accompanying the periodic statement for either the billing cycle in which the credit balance first occurs and is due and owing the customer or the next succeeding billing cycle the following information to the extent applicable: (a) The amount of the credit balance at the end of the applicable billing cycle; (b) That such credit balance represents money owed to the customer; (c) That the customer has the right to make charges against such credit balance or to obtain a cash refund of such balance upon request; (d) That the creditor will refund, within thirty days after the expiration of the foresaid six-month period, the amount then remaining in such credit balance, if no charge has been made against such credit balance, and a refund has not been requested and the amount of such credit balance is then in excess of one dollar. If the creditor discloses the credit balance more than once, the additional disclosures shall also be made in at least one other periodic statement or in a statement accompanying another periodic statement for a billing cycle within the aforesaid six-month period.

M.G.L. c. 140D, § 23 Transfer of funds following default of debt; written notice; applicability

c. 140D, § 23. Transfer of funds following default of debt; written notice; applicability Section 23. No bank or credit union shall transfer any funds held in any account of the customer in said bank or credit union as a consequence of a default of a debt owed to such institution unless the customer has been provided a written notice, prior to the time the loan is made, which states the institution may transfer such funds to reduce or extinguish such a debt. The provisions of this section shall not apply to open-end-credit plans which are subject to section twenty-one.

M.G.L. c. 140D, § 24 Guaranty of obligations of other persons; notice of additional obligations

c. 140D, § 24. Guaranty of obligations of other persons; notice of additional obligations Section 24. No person who executes a guaranty of the obligations of another in connection with an application by such other person for an open-end-credit plan or for an extension of credit other than an open-end-credit plan shall be liable as a result of such guaranty for an obligation not arising under such plan or extension of credit unless such person has been notified of such additional obligation in advance.

M.G.L. c. 140D, § 25 Issuance of credit cards

c. 140D, § 25. Issuance of credit cards Section 25. No credit card shall be issued except in response to a request or application therefor, or the issuance of a credit card in renewal of, or in substitution for, an accepted credit card.

M.G.L. c. 140D, § 26 Cardholder liability for unauthorized use

c. 140D, § 26. Cardholder liability for unauthorized use Section 26. (a)(1) A cardholder shall be liable for the unauthorized use of a credit card only if: (A) The card is an accepted credit card; (B) The liability is not in excess of fifty dollars; (C) The card issuer gives adequate notice to the cardholder of the potential liability; (D) The card issuer has provided the cardholder with a description of a means by which the card issuer may be notified of loss or theft of the card, which description may be provided on the face or reverse side of the statement required by subsection (b) of section eleven or on a separate notice accompanying such statement; (E) The unauthorized use occurs before the card issuer has been notified that an unauthorized use of the credit card has occurred or may occur as a result of loss, theft, or otherwise; and (F) The card issuer has provided a method whereby the user of such card can be identified as the person authorized to use it. (2) For purposes of this section, a card issuer has been notified when such steps as may be reasonably required in the ordinary course of business to provide the card issuer with the pertinent information have been taken, whether or not any particular officer, employee, or agent of the card issuer does in fact receive such information. (b) In any action by a card issuer to enforce liability for the use of a credit card, the burden of proof is upon the card issuer to show that the use was authorized or, if the use was unauthorized, then the burden of proof is upon the card issuer to show that the conditions of liability for the unauthorized use of a credit card, as set forth in subsection (a), have been met. (c) Nothing in this section imposes liability upon a cardholder for the unauthorized use of a credit card in excess of his liability for such use under other applicable law or under any agreement with the card issuer. (d) Except as provided in this section, a cardholder shall incur no liability from the unauthorized use of a credit card.

M.G.L. c. 140D, § 27 Unauthorized use of credit cards

c. 140D, § 27. Unauthorized use of credit cards Section 27. (a) Whoever knowingly in a transaction uses or attempts or conspires to use any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card to obtain money, goods, services, or anything else of value which within any one-year period has a value aggregating one thousand dollars or more; or (b) Whoever, with unlawful or fraudulent intent, transports or attempts or conspires to transport a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or (c) Whoever, with unlawful or fraudulent intent, uses any instrumentality of interstate or foreign commerce to sell or transport a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or (d) Whoever knowingly receives, conceals, uses, or transports money, goods, services, or anything else of value which (1) within any one-year period has a value aggregating one thousand dollars or more, and (2) has been obtained with a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card; or (e) Whoever knowingly receives, conceals, uses, sells, or transports one or more tickets for interstate or foreign transportation, which (1) within any one-year period have a value aggregating five hundred dollars or more, and (2) have been purchased or obtained with one or more counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit cards; or (f) Whoever in a transaction furnishes money, property, services, or anything else of value, which within any one-year period has a value aggregating one thousand dollars or more, through the use of any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained credit card knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained shall be fined not more than ten thousand dollars or imprisoned not more than ten years, or both.

M.G.L. c. 140D, § 28 Liability of business for unauthorized use of credit cards

c. 140D, § 28. Liability of business for unauthorized use of credit cards Section 28. The exemption provided by subsection (a) of section two shall not apply to the provisions of sections twenty-five, twenty-six and twenty-seven, except that a card issuer and a business or other organization which provides credit cards issued by the same card issuer to ten or more of its employees may by contract agree as to liability of the business or other organization with respect to unauthorized use of such credit cards without regard to the provisions of section twenty-six, but in no case may such business or other organization or card issuer impose liability upon any employee with respect to unauthorized use of such a credit card except in accordance with and subject to the limitations of said section twenty-six.

M.G.L. c. 140D, § 28A Cardholder discounts; surcharges; finance charge

c. 140D, § 28A. Cardholder discounts; surcharges; finance charge Section 28A. (a)(1) With respect to a credit card which may be used for extensions of credit in sales transactions in which the seller is a person other than the card issuer, the card issuer may not, by contract or otherwise, prohibit any such seller from offering a discount to a cardholder to induce the cardholder to pay cash, check or similar means rather than use a credit card. (2) No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means. (b) With respect to any sales transaction, any discount from the regular price offered by the seller for the purpose of inducing payment by cash, check or other means not involving the use of an open-end-credit plan or a credit card shall not constitute a finance charge under section four if such discount is offered to all prospective buyers and its availability is disclosed clearly and conspicuously.

M.G.L. c. 140D, § 28B Participation in credit card plans; conditions

c. 140D, § 28B. Participation in credit card plans; conditions Section 28B. Notwithstanding any agreement to the contrary, a card issuer may not require a seller, as a condition to participating in a credit card plan, to open an account with or procure any other service from the card issuer or its subsidiary or agent.

M.G.L. c. 140D, § 29 Rules and regulations; consistency with Federal Fair Credit Billing Act

c. 140D, § 29. Rules and regulations; consistency with Federal Fair Credit Billing Act Section 29. The commissioner may prescribe from time to time rules and regulations consistent with the provisions of the Federal Fair Credit Billing Act 15 USC 1666 to 1666j, inclusive, and the regulations promulgated thereunder, and a creditor upon whom such rules and regulations impose duties or obligations, shall make or give to a customer the disclosures, information and notices required of him by such rules and regulations, and such disclosures, information and notices shall constitute compliance with the provisions of this chapter.

M.G.L. c. 140D, § 30 Inspection of records

c. 140D, § 30. Inspection of records Section 30. Each creditor shall, when directed by the commissioner, permit the commissioner or his duly authorized representative to inspect its relevant records and evidence of compliance with this chapter, or any rule or regulation issued thereunder.

M.G.L. c. 140D, § 31 Prohibited acts; penalty

c. 140D, § 31. Prohibited acts; penalty Section 31. Whoever willfully and knowingly: (1) Gives false or inaccurate information or fails to provide information which he is required to disclose under the provisions of this chapter or any regulation issued thereunder, (2) Uses any chart or table authorized by the commissioner or the bureau under section five in such a manner as to consistently understate the annual percentage rate determined under subclause (A) of clause (1) of subsection (a) of section five, or (3) Otherwise fails to comply with any requirement imposed under this chapter, or any rule or regulation issued thereunder, shall be fined not more than five thousand dollars or imprisoned not more than one year, or both.

M.G.L. c. 140D, § 32 Creditor's failure to comply with law; damages

c. 140D, § 32. Creditor's failure to comply with law; damages Section 32. (a) Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this chapter or any rule or regulation issued thereunder including any requirement under section ten with respect to any person is liable to such person in an amount equal to the sum of: (1) Any actual damage sustained by such person as a result of the failure; (2) (a) In the case of an individual action, twice the amount of any finance charge in connection with the transaction, except that the liability under this clause shall not be less than one hundred dollars nor greater than one thousand dollars; or (b) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable and the total recovery under this subclause in any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of five hundred thousand dollars or one per centum of the net worth of the creditor or (c) in the case of an individual action relating to a credit transaction not under an open-end credit plan that is secured by real property or a dwelling, not less than two hundred dollars or greater than two thousand dollars; and (3) In the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section ten, the costs of the action, together with a reasonable attorney's fee as determined by the court. In determining the amount of award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of failures of compliance by the creditor, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor's failure of compliance was intentional. In connection with the disclosures referred to in section eleven, a creditor shall be liable under clause (a) only for failing to comply with the requirements of section ten, subsection (a) of section eleven or of clauses (4), (5), (6), (7), (8), (9) or (10) of subsection (b) of section eleven. In connection with the disclosures referred to in section twelve, a creditor shall be liable under clause (2) only for failing to comply with the requirements of section ten or of clauses (2), insofar as it requires a disclosure of the ''amount financed'', (3), (4), (5), (6) or (9) of subsection (a) of section twelve. With respect to any failure to make disclosures required under this chapter or any rule or regulation issued thereunder by the commissioner, liability shall be imposed only upon the creditor required to make disclosure except as provided in section thirty-three. (b) A creditor or assignee has no liability under this section or section six or section thirty-one for any failure to comply with any requirement imposed under this chapter or any rule or regulation issued thereunder, if within sixty days after discovering an error, whether pursuant to a final written examination report or notice issued under section six or through the creditor's or assignee's own procedures, and prior to the institution of an action under this section or the receipt of written notice of the error from the obligor, the creditor or assignee notifies the person concerned of the error and makes whatever adjustments in the appropriate account are necessary to assure that the person will not be required to pay an amount in excess of the charge actually disclosed, or the dollar equivalent of the annual percentage rate actually disclosed, whichever is lower. (c) A creditor or assignee may not be held liable in any action brought under this section or section ten for a violation of this chapter, or any rule or regulation issued thereunder, if the creditor or assignee shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid any such error. A bona fide error includes, but shall not be limited to, clerical, calculation, computer malfunction and programming, and printing errors, except that an error of legal judgment with respect to a person's obligations under this chapter, or rule or regulation issued thereunder, is not a bona fide error. (d) When there are multiple obligors in a consumer credit transaction, there shall be no more than one recovery of damages under clause (2) of subsection (a). (e) No provision of this section, section six or section thirty-one imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the commissioner notwithstanding that after such act or omission has occurred such rule, regulation or interpretation is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (f) The multiple failure to disclose to any person any information required under this chapter or any rule or regulation issued thereunder, to be disclosed in connection with a single account under an open end consumer credit plan, other single consumer credit sale, consumer loan, or other extension of consumer credit, shall entitle the person to a single recovery under this section but continued failure to disclose after a recovery has been granted shall give rise to rights to additional recoveries. This subsection shall not bar any remedy permitted by section ten. (g) A person may not take any action to offset any amount for which a creditor or assignee is potentially liable to such person under clause (2) of subsection (a) against any amount owed by such person, unless the amount of the creditor's or assignee's liability under this chapter, or any rule or regulation issued thereunder, has been determined by judgment of a court of competent jurisdiction in an action of which such person was a party. This subsection shall not bar a consumer then in default on the obligation from asserting a violation of this chapter, or any rule or regulation issued thereunder, as an original action, or as a defense or counterclaim to an action to collect amounts owed by the consumer brought by a person liable under this chapter, or any rule or regulation issued thereunder.

M.G.L. c. 140D, § 33 Civil actions against subsequent assignees of creditor; written acknowledgement; rescission

c. 140D, § 33. Civil actions against subsequent assignees of creditor; written acknowledgement; rescission Section 33. (a) Except as otherwise specifically provided in this chapter, or any rule or regulation issued thereunder, any civil action for a violation of this chapter, or any rule or regulation issued thereunder, or proceeding under section six which may be brought against a creditor may be maintained against any assignee of such creditor only if the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement, except where the assignment was involuntary. For the purpose of this section, a violation apparent on the face of the disclosure statement includes, but is not limited to (i) a disclosure which can be determined to be incomplete or inaccurate from the face of the disclosure statement or other documents assigned, or (ii) a disclosure which does not use the terms required to be used by this chapter, or any rule or regulation issued thereunder. (b) Except as provided in subsection (c) of section ten, in any action or proceeding by or against any subsequent assignee of the original creditor without knowledge to the contrary by the assignee when he acquires the obligation, written acknowledgement of the receipt by a person to whom a statement is required to be given pursuant to this chapter, or any rule or regulation issued thereunder, shall be conclusive proof of the delivery thereof and, except as provided in section (a), of compliance with this chapter, or any rule or regulation issued thereunder. This section does not affect the rights of an obligor in any action against the original creditor. (c) Any consumer who has the right to rescind a transaction under section ten may rescind the transaction as against any assignee of the obligation. (d)(1) Except as otherwise specifically provided in this chapter, or any rule or regulation issued thereunder, any civil action against a creditor with respect to a consumer credit transaction secured by real property for a violation of this chapter and any proceeding under section six may be maintained against any assignee of such creditor only if— (i) the violation for which such action or proceeding is brought is apparent on the face of the disclosure statement provided in connection with such transaction pursuant to this chapter; and (ii) the assignment to the assignee was voluntary. For the purposes of this section, a violation is apparent on the face of the disclosure statement if: (i) the disclosure can be determined to be incomplete or inaccurate by a comparison among the disclosure statement, any itemization of the amount financed, the note, or any other disclosure of disbursement; or (ii) the disclosure statement does not use the terms or format required to be used by this chapter. [There is no paragraph (d)(2).] (e)(1) A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as an assignee of such obligation for the purposes of this section unless the servicer is or was the owner of the obligation. (2) A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as the owner of such obligation for the purposes of this section on the basis of an assignment of said obligation from the creditor or another assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address and telephone number of the owner of the obligation or the master servicer thereof. (3) For the purposes of this section, the word ''servicer'' shall have the same meaning as in section 6(I)(2) of the Federal Real Estate Settlement Procedures Act of 1974. (4) This paragraph shall apply to all consumer credit transactions in existence or consummated on or after September thirtieth, nineteen hundred and ninety-five.

M.G.L. c. 140D, § 34 Unfair trade practices; violations

c. 140D, § 34. Unfair trade practices; violations Section 34. A violation of this chapter, or any rule or regulation issued hereunder, shall constitute a violation of chapter ninety-three A.

M.G.L. c. 140D, § 35 Limitations on creditors' liability and consumer rescission rights

c. 140D, § 35. Limitations on creditors' liability and consumer rescission rights Section 35. (a) For any consumer credit transaction subject to this chapter that is consummated before September thirtieth, nineteen hundred and ninety-five, a creditor or any assignee of a creditor shall have no civil, administrative or criminal liability under this chapter for, and a consumer shall have no extended rescission rights under section ten with respect to: (1) the creditor's treatment, for disclosure purposes, of: (i) taxes described in clause (3) of subsection (d) of section four; (ii) fees described in clauses (2) and (5) of subsection (e) of said section four; (iii) fees and amounts referred to in clause (7) of subsection (e) of said section four; (iv) borrower-paid mortgage broker fees referred to in clause (6) of subsection (a) of said section four. (2) the form of written notice used by the creditor to inform the obligor of the rights of the obligor under the provisions of section ten if the creditor provided the obligor with a properly dated form of written notice published and adopted by the commissioner or a comparable written notice, and otherwise complied with all the requirements of this chapter regarding notice; or (3) any disclosure relating to the finance charge imposed with respect to the transaction if the amount or percentage actually disclosed - (i) may be treated as accurate for the purposes of this chapter if the amount disclosed as the finance charge does not vary from the actual finance charge by more than two hundred dollars; (ii) may, under clause (2) of said subsection (a) of said section four, be treated as accurate for the purposes of section ten; or (iii) is greater than the amount or percentage required to be disclosed under this chapter. (b) Subsection (a) shall not apply to: (1) any individual action or counterclaim brought under this chapter which was filed before June first, nineteen hundred and ninety-five; (2) any class action brought under this chapter for which a final order certifying a class was entered before January first, nineteen hundred and ninety-five; (3) the named individual plaintiffs in any class action brought under this chapter which was filed before June first, nineteen hundred and ninety-five; or (4) any consumer credit transaction with respect to which a timely notice of rescission was sent to the creditor before June first, nineteen hundred and ninety-five.

M.G.L. c. 140D, § 36 Exemption from requirements of federal law; action for determination by bureau that commonwealth requirements substantially similar to federal requirements

c. 140D, § 36. Exemption from requirements of federal law; action for determination by bureau that commonwealth requirements substantially similar to federal requirements Section 36. The commissioner may take any action necessary, including but not limited to promulgating regulations under chapter 30A, to apply for or to preserve a determination by the bureau, or its successor agency, that under the laws of the commonwealth any class of credit transactions within the commonwealth shall be subject to requirements substantially similar to the federal requirements and that there are adequate provisions for enforcement of such requirements.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXX/Chapter140DFetched: 10/20/2026