H-1124.1  _______________________________________________

                          HOUSE BILL 1566

          _______________________________________________

State of Washington      56th Legislature     1999 Regular Session

By Representatives Miloscia, Hatfield, Veloria, Cairnes, Tokuda, Clements, Dunshee, Ogden, Thomas, Benson and McIntire

Read first time 01/28/1999.  Referred to Committee on Financial Institutions & Insurance.

Requiring a warning to consumers to be placed on credit cards.

    AN ACT Relating to consumer credit card information; and adding new sections to chapter 63.14 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  (1) The legislature finds that:

    (a) In one year an estimated 3.2 billion offers for consumer credit will be mailed by financial institutions to potential consumers;

    (b) Many of these offers have introductory rates that are as low as three percent;

    (c) Many consumers are not aware that these introductory rates rise to as high as twenty-one percent within six months of issuance of the credit card;

    (d) Between 1996 and 1997, the amount of credit card debt was estimated at three hundred ninety-four billion dollars;

    (e) Many consumers are not aware that interest on credit card purchases can start at the date of purchase, even before the credit card company has paid the seller on behalf of the buyer;

    (f) Many credit card companies charge annual fees exceeding fifty dollars; and

    (g) Many consumers are enticed by credit card offers that state they merely need to pay two to three percent of their monthly balance, unaware that charges to the unpaid balance accumulate and are added to the unpaid balance.

    (2) It is the intent of this act to attempt to educate consumers regarding the dangers of excessive credit card debt and to increase consumer awareness regarding credit card financing.

NEW SECTION. Sec. 2.  (1) All issuers of credit cards to residents within the state of Washington shall provide a sticker that informs the consumer of the dangers of excessive credit card debt.  The issuer shall ensure that the notice appears on a removable sticker that is affixed to the rear of the card, over the signature strip, and that the sticker states the following:

WARNING:  Failure to research interest rates and credit cards may result in personal financial loss or possible bankruptcy.

    (2) In addition to the required notice under subsection (1) of this section, the issuer shall provide information to the consumer regarding the personal financial impacts of excessive credit card use.

    (3) For purposes of this section:

    (a) "Credit card" means a card or device under a credit card agreement pursuant to which the issuer gives to a cardholder residing in this state the privilege of obtaining credit from the issuer or other persons in purchasing or leasing property or services, obtaining loans, or otherwise; and

    (b) "Credit card agreement" means an agreement entered into or performed in this state prescribing the terms of retail installment transactions pursuant to which the issuer may, with the buyer's consent, purchase or acquire one or more retail sellers' indebtedness of the buyer under a sales slip or memorandum evidencing the purchase, lease, loan, or otherwise to be paid in accordance with the agreement.

NEW SECTION. Sec. 3.  Sections 1 and 2 of this act are each added to chapter 63.14 RCW.

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