Code of Massachusetts Regulations
209 CMR - DIVISION OF BANKS AND LOAN AGENCIES
Title 209 CMR 32.00 - Disclosure Of Consumer Credit Costs And Terms
OPEN END CREDIT
Section 32.06A - Computation of Finance Charge
Universal Citation: 209 CMR 32.00 MA Code of Regs 32.06A
Current through Register 1531, September 27, 2024
(1) Definition of "Credit Card Sale". For purposes of 209 CMR 32.06A, a "credit card sale" means a retail sale of goods or services made in reliance on a credit card, but it does not include:
(a) A sale paid for with a check, draft or
similar written instrument that is accepted in reliance on a check guarantee
card.
(b) A sale made in reliance
on an access device, as defined in M.G.L. c. 167B, if the sale results in an
extension of credit under an overdraft credit plan or under a plan to maintain
a specified minimum balance in a deposit account.
(2) Exclusion of New Credit Card Sales.
(a) The balance on which
the finance charge is computed under an open end credit plan established
pursuant to M.G.L. c. 255D shall not include any new balance resulting from a
credit card sale first posted to the account during the billing cycle for which
the finance charge is computed.
(b)
The balance on which the finance charge is computed under any other open end
credit plan shall not include any balance resulting from a credit card sale
first posted to the account during the cycle for which the finance charge is
computed if:
1. There was no balance
outstanding under the open end credit plan at the beginning of the
cycle;
2. Any balance outstanding
under the open end credit plan at the beginning of the cycle was solely
attributable to a finance charge assessed with respect to the preceding cycle;
or
3. The sum of all payments
received by the creditor during the cycle and all credits to the open end plan
applicable to any balance outstanding at the beginning of the cycle is equal to
or exceeds the balance outstanding under the plan at the beginning of the
cycle.
(3) Finance Charge Computation Methods. Subject to 209 CMR32.06A(2), the finance charge under an open end credit plan may be computed on any of the following:
(a) The previous
balance of the account, after deducting all payments on the account received by
the creditor during the cycle and all credits to the account that apply to a
sale reflected in the previous balance.
(b) The average daily balance determined by
adding the daily account balances for each day in the billing cycle and
dividing the total by the number of days in the billing cycle.
(c) The daily account balances.
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