(a) In addition to any other disclosures required by law, a card issuer of a secured credit card shall, in every advertisement or solicitation to prospective cardholders, expressly identify the credit instrument offered as a “secured credit card” and prominently disclose that credit extended under the secured credit card is secured, and shall describe the security by item or type.

(b) Any deed of trust executed in connection with a secured credit card shall contain a statement that it is security for a secured credit card obligation. However, failure to include the statement shall not invalidate the deed of trust.

Terms Used In California Civil Code 1747.94

  • Card issuer: means any person who issues a credit card or the agent of that person for that purpose with respect to the credit card. See California Civil Code 1747.02
  • Cardholder: means a natural person to whom a credit card is issued for consumer credit purposes, or a natural person who has agreed with the card issuer to pay consumer credit obligations arising from the issuance of a credit card to another natural person. See California Civil Code 1747.02
  • Credit card: means any card, plate, coupon book, or other single credit device existing for the purpose of being used from time to time upon presentation to obtain money, property, labor, or services on credit. See California Civil Code 1747.02
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • property: includes property real and personal. See California Civil Code 14
  • Secured credit card: means any credit card issued under an agreement or other instrument that pledges, hypothecates, or places a lien on real property or money or other personal property to secure the cardholder's obligations to the card issuer. See California Civil Code 1747.02

(c) This section does not apply to either of the following:

(1) Any credit card which is issued under an agreement or other instrument creating a purchase money security interest in property purchased with the credit card, but which does not pledge, hypothecate, or place a lien on other property of the cardholder or any co-obligor.

(2) Loans or extensions of credit subject to the Federal Home Equity Loan Consumer Protection Act of 1988 (P. L. 100-709).

(d) Any violation of this section shall constitute unfair competition within the meaning of § 17200 of the Business and Professions Code.

(Added by Stats. 1991, Ch. 608, Sec. 2.)

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