New Jersey § 17:3b-41

§ 17:3b-41.

a. A bank may, if the agreement governing a revolving credit plan so provides, at

any time, or from time to time, amend the terms of the agreement, including without

limitation, the terms governing the periodic percentage rate or rates used to calculate

interest, the method of computing the outstanding unpaid indebtedness to which the

rate or rates are applied, the amounts of other charges and the applicable installment

repayment schedule, in accordance with the further provisions of this section. b. (1) The bank shall notify each affected borrower of an amendment to the terms of

the agreement in the manner set forth in the agreement governing the plan and in compliance

with the requirements of the federal “Truth in Lending Act,” 15 U.S.C. § 1601 et seq., and regulations promulgated thereunder, if applicable; except that if the amendment

has the effect of increasing the periodic interest or interest charges to be paid

by the borrower, the bank shall mail or deliver to the borrower, at least 30 days

before the effective date of the amendment, a conspicuous written notice which shall

clearly describe the amendment and shall also set forth the effective date of the

amendment and the pertinent information contemplated by the following provisions of

this section. (2) If the amendment has the effect of increasing the periodic interest or interest

charges to be paid by the borrower, the amendment shall, except as otherwise provided

for in this section, become effective as to a particular borrower as of the first

day of the billing cycle during which the effective date of the amendment occurs or

as of any later date, in either case, in accordance with this section and as stipulated

in the notice, so long as the borrower does not, within 30 days of the mailing or

the delivery of the notice of the amendment, whichever is earlier, furnish written

notice to the bank that the borrower does not agree to accept the amendment. The notice from the bank shall include: a statement that, absent the borrower's

written notice to the bank, within 30 days of the earlier of the mailing or delivery

of the notice of the amendment, that the borrower does not agree to accept the amendment,

the proposed amendment will become effective and apply to the borrower and the borrower's

account; and the address to which a borrower may send notice of the borrower's election

not to accept the amendment. Any borrower who gives timely notice electing not to accept an amendment shall be

permitted to pay the outstanding unpaid indebtedness in the borrower's account under

the plan in accordance with the terms of the agreement governing the plan without

giving effect to the amendment; except that if the borrower does not agree to accept

the proposed amendment, the bank may convert the borrower's account to a closed-end

credit account on credit terms substantially identical to or more favorable to the

borrower than those set forth in the then existing agreement governing the borrower's

account and the borrower will continue to be subject to the terms of the existing

agreement or the more favorable terms until the borrower's account balance is paid

in full. As a condition to the effectiveness of any notice that a borrower does not accept

the amendment, the bank may require the borrower to return all credit devices. If after 30 days from mailing or delivery by the bank of a proposed amendment, a

borrower uses a credit device to obtain credit under a plan, notwithstanding that

the borrower has, prior to the use, given the bank notice that the borrower does not

accept an amendment, the amendment shall be deemed to have been accepted and shall

become effective as to the borrower and the borrower's account as of the date that

the amendment would have become effective but for the giving of notice by the borrower. (3) Notwithstanding paragraph (2) of this subsection b., the bank may also amend the

agreement governing the plan to require that any amendment shall become effective

only if the borrower uses the plan after a date specified in the notice of the proposed

amendment which is at least 30 days after the giving of the notice, but which need

not be the date the amendment becomes effective, by making a purchase or obtaining

a loan or if the borrower indicates to the bank the borrower's express agreement to

the amendment. Any such amendment may become effective as to a particular borrower as of the first

day of the billing period during which the borrower used the borrower's account or

indicated agreement to the amendment. Any borrower who fails to use the borrower's account or to indicate agreement to

an amendment shall be permitted to pay the outstanding unpaid indebtedness in the

borrower's account under the plan in accordance with the terms of the agreement governing

the plan without giving effect to the amendment subject to the right of the bank to

convert the borrower's account to a closed-end credit account as provided in paragraph

(2) of this subsection b. c. If the terms of the agreement governing the plan, as originally drawn or as amended

pursuant to this section, so provide, any amendment may, on and after the date upon

which it becomes effective as to a particular borrower, apply to all then outstanding

unpaid indebtedness in the borrower's account under the plan, including any indebtedness

which shall have arisen out of purchases made or loans obtained prior to the effective

date of the amendment. d. For purposes of this section, the following shall not be deemed an amendment which

has the effect of increasing the interest to be paid by the borrower: (1) A decrease in the required amount of a periodic installment payment. (2) A change in the schedule or formula used under a variable rate plan under section

5 of this act 1 so long as the initial interest rate resulting from the change is not an increase. (3) A change from a daily periodic rate to a periodic rate other than daily or from

a periodic rate other than daily to a daily periodic rate under section 4 of this

act. 2 e. The procedure for amendment by a bank of the terms of a plan to which the borrower,

other than an individual borrower, is a party may, in lieu of the foregoing provisions

of this section, be as the agreement governing the plan may otherwise provide. 1

N.J.S.A. § 17:3B-33. 2

N.J.S.A. § 17:3B-32.