2005 Session Laws Chapter 259

ENTITLED, An Act to revise certain provisions relating to the modification of credit card agreements.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:

Section 1. That § 54-11-10 be amended to read as follows:

54-11-10. Upon written notice, a credit card issuer may change the terms of any credit card agreement, if such right of amendment has been reserved , including finance charges, fees and other costs, effective as to existing balances, so long as the card holder does not, within twenty-five days of the effective date of the change, furnish written notice to the issuer that he does not agree to abide by such changes. Upon receipt of such written notice by the issuer, the card holder shall have the remainder of the time under the existing terms in which to pay all sums owed to the issuer or creditor. Use of the card after the effective date of the change of terms, including a change in interest rates, is deemed to be an acceptance of the new terms, even though the twenty-five days have not expired . However, the following changes to the credit card agreement, effective as to existing balances, do not become binding on the parties if the card holder, within twenty-five days of the effective date of the change, furnishes written notice to the issuer, at the address designated by the issuer, that the card holder does not agree to abide by such changes:

Any other change to the credit card agreement modifying the manner in which the issuer and card holder resolve disputes arising out of their relationship do not become binding on the parties if the card holder, within twenty-five days of the effective date of the change, furnishes written notice to the issuer, at the address designated by the issuer, that the card holder does not agree to abide by such changes.

Use of the card after the effective date of the change of terms is deemed to be an acceptance of the new terms, even if the twenty-five-day period has not expired. Unless otherwise required by 12 C.F.R. § 226, in effect on January 1, 2005, a written change of terms notice is not required if the proposed change in terms has been communicated by the issuer to the card holder and the card holder agrees.

Section 2. That chapter 54-11 be amended by adding thereto a NEW SECTION to read as follows:

In lieu of the card holder's right to reject certain changes in terms within twenty-five days pursuant to section 1 of this Act, the issuer may require the card holder to provide written notice of such rejection not less than five days prior to the effective date of the change if the issuer has sent notice of the proposed change in terms under this Act to the card holder not less than thirty days prior to the effective date of the change. The issuer may provide the card holder an alternative means by which to communicate the card holder's rejection of the change in terms, so long as the alternative means is not more burdensome to the card holder.