Compliance Q&A: Online Credit Card Apps

August 2, 2010

Q Can a credit union take online and telephone credit card applications from applicants under age 21?

A Yes. Section 226.51(b) of Regulation Z requires an underage consumer that's applying for a credit card account to submit a written application to the card issuer.

The Federal Reserve Board's Official Staff Commentary to the regulation, however, clarifies that an application also may be provided to the underage consumer in electronic form without regard to the federal e-signature statute's requirements.

No provision is made for a card issuer to accept an application from an underage consumer in person, by telephone, or otherwise.

A credit union that takes all the necessary information for an application verbally from the member, prints the completed application, and has the member sign the completed application likely will have satisfied the written application requirement.

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