Relates to creating a forty-eight hour grace period from due date of credit card bill

Title of bill

An act to amend the general business law, in relation to creating a forty-eight hour grace period from the due date of a credit card bill

Purpose or general idea of bill

To allow for a grace period of forty-eight hours from the due date of a credit card bill payment so to give the payment ample time to arrive via mail or electronic transfer.

Summary of specific provisions

A new section to the business law is added. Section 515-a allows for a forty-eight hour grace period for which the issuer of a credit card cannot impose or modify any charges charges related to the annual percentage rate (APR), fees for issuance of availability, minimum finance charges, transaction charges, cash advance fees, renewal fees, over-the-limit fees, or any other fee or rate related to use of a credit card for forty-eight hours.

A violation of section 515-a is deemed a deceptive act and a civil penalty of up to one thousand dollars can be imposed. Each subsequent violation can impose a penalty of up to two-thousand dollars.

Justification

Credit card bills are usually paid by mail or electronic deposit. Because of the processing involved when a payment is received by the credit card issuer and the time it takes for mail to arrive, a bill arriving on time may not be processed before the due date. When this happens the credit card issuer charges a retributive late fee and raises special interest rates on the customer, when the issuer is at fault. The forty-eight hour grace period protects the consumer from late fees and rate changes when the consumer is not at fault.

Prior legislative history

New legislation.

Fiscal implications

None.

Effective date

The first of January next succeeding the date on which it shall have become a law.