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Credit CARD Act of 2009

Title I ~ SEC. 104. APPLICATION OF CARD PAYMENTS

Section 164 of the Truth in Lending Act (15 U.S.C. 1666c) is amended--

(1) by striking the section heading and all that follows through ‘Payments’ and inserting the following:

Sec. 164. Prompt and fair crediting of payments

(a) In General- Payments’;

(2) by inserting 'by 5:00 p.m. on the date on which such payment is due,' after ‘in readily identifiable form’;

(3) by striking ‘manner, location, and time’ and inserting ‘manner, and location’; and

(4) by adding at the end the following:

(b) Application of Payments-

(1) IN GENERAL- Upon receipt of a payment from a cardholder, the card issuer shall apply amounts in excess of the minimum payment amount first to the card balance bearing the highest rate of interest, and then to each successive balance bearing the next highest rate of interest, until the payment is exhausted.

(2) CLARIFICATION RELATING TO CERTAIN DEFERRED INTEREST ARRANGEMENTS- A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred.

(c) Changes by Card Issuer- If a card issuer makes a material change in the mailing address, office, or procedures for handling cardholder payments, and such change causes a material delay in the crediting of a cardholder payment made during the 60-day period following the date on which such change took effect, the card issuer may not impose any late fee or finance charge for a late payment on the credit card account to which such payment was credited.