source:
  type: regulation
  id: reg-z-1026.2
  authority: 12 CFR §1026.2 — Definitions and rules of construction (Regulation Z)
  description: 12 CFR §1026.2 — Definitions and rules of construction.
  coverage_tier: context
obligations:
- id: reg-z-1026.2-full
  canonical_id: reg-z-1026.2-full
  section: 12 CFR §1026.2 — Definitions and rules of construction
  type: reference
  tags:
  - regulator-direct
  - tila
  - corpus-expansion
  - tier-context
  primary_source:
    tier: 1
    authority: 12 CFR §1026.2 — Definitions and rules of construction
    source_class: cfpb-regulation
    source_url: https://www.law.cornell.edu/cfr/text/12/1026.2
    snapshot_id: 18082dc95fbbb3d6
    fetched_at: '2026-06-17T18:31:36Z'
    content_hash: sha256:f26ece8e297f59c30952bf20ac878058070d37134f3641bf5104a7e55de6b788
    paragraph_quote: '§ 1026.2 Definitions and rules of construction . (a) Definitions.
      For purposes of this part, the following definitions apply: (1) Act means the
      Truth in Lending Act ( 15 U.S.C. 1601 et seq. ). (2) Advertisement means a commercial
      message in any medium that promotes, directly or indirectly, a credit transaction.
      (3) (i) Application means the submission of a consumer ''s financial information
      for the purposes of obtaining an extension of credit. (ii) For transactions
      subject to § 1026.19(e) , (f), or (g) of this part, an application consists
      of the submission of the consumer ''s name, the consumer ''s income, the consumer
      ''s social security number to obtain a credit report, the property address,
      an estimate of the value of the property, and the mortgage loan amount sought.
      (4) Billing cycle or cycle means the interval between the days or dates of regular
      periodic statements. These intervals shall be equal and no longer than a quarter
      of a year. An interval will be considered equal if the number of days in the
      cycle does not vary more than four days from the regular day or date of the
      periodic statement. (5) Bureau means the Bureau of Consumer Financial Protection.
      (6) Business day means a day on which the creditor''s offices are open to the
      public for carrying on substantially all of its business functions. However,
      for purposes of rescission under §§ 1026.15 and 1026.23, and for purposes of
      §§ 1026.19(a)(1)(ii) , 1026.19(a)(2), 1026.19(e)(1)(iii)(B), 1026.19(e)(1)(iv),
      1026.19(e)(2)(i)(A), 1026.19(e)(4)(ii), 1026.19(f)(1)(ii), 1026.19(f)(1)(iii),
      1026.20(e)(5), 1026.31, and 1026.46(d)(4), the term means all calendar days
      except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a) ,
      such as New Year''s Day, the Birthday of Martin Luther King, Jr., Washington''s
      Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans
      Day, Thanksgiving Day, and Christmas Day. (7) Card issuer means a person that
      issues a credit card or that person ''s agent with respect to the card. (8)
      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 . For purposes of § 1026.12(a) and (b) , the term includes
      any person to whom a credit card is issued for any purpose, including business,
      commercial or agricultural use, or a person who has agreed with the card issuer
      to pay obligations arising from the issuance of such a credit card to another
      person . (9) Cash price means the price at which a creditor, in the ordinary
      course of business , offers to sell for cash property or service that is the
      subject of the transaction. At the creditor''s option, the term may include
      the price of accessories, services related to the sale, service contracts and
      taxes and fees for license, title, and registration. The term does not include
      any finance charge. (10) Closed-end credit means consumer credit other than
      “open-end credit” as defined in this section. (11) Consumer means a cardholder
      or natural person to whom consumer credit is offered or extended. However, for
      purposes of rescission under §§ 1026.15 and 1026.23, the term also includes
      a natural person in whose principal dwelling a security interest is or will
      be retained or acquired, if that person ''s ownership interest in the dwelling
      is or will be subject to the security interest . For purposes of § 1026.42(i)
      , the term means a natural person to whom credit is offered or extended, even
      if the credit is primarily for business, commercial, agricultural, or organizational
      purposes. For purposes of §§ 1026.20(c) through (e), 1026.36(c), 1026.39, and
      1026.41, the term includes a confirmed successor in interest . (12) Consumer
      credit means credit offered or extended to a consumer primarily for personal,
      family , or household purposes. (13) Consummation means the time that a consumer
      becomes contractually obligated on a credit transaction. (14) Credit means the
      right to defer payment of debt or to incur debt and defer its payment. (15)
      (i) Credit card means any card, plate, or other single credit device that may
      be used from time to time to obtain credit. The term credit card includes both
      a hybrid prepaid-credit card as defined in § 1026.61 and a hybrid debit-credit
      card as defined in § 1026.62 . (ii) Credit card account under an open-end (not
      home-secured) consumer credit plan means any open-end credit account that is
      accessed by a credit card , except: (A) A home-equity plan subject to the requirements
      of § 1026.40 that is accessed by a credit card ; or (B) A covered overdraft
      credit account as defined in § 1026.62 offered by a creditor other than a very
      large financial institution as defined in § 1026.62 that is accessed by a debit
      card or account number. (iii) Charge card means a credit card on an account
      for which no periodic rate is used to compute a finance charge. The term does
      not include a hybrid debit-credit card as defined in § 1026.62 . (iv) Debit
      card means any card, plate, or other single device that may be used from time
      to time to access an asset account other than a prepaid account as defined in
      § 1026.61 . The term debit card does not include a prepaid card as defined in
      § 1026.61 . (16) Credit sale means a sale in which the seller is a creditor.
      The term includes a bailment or lease (unless terminable without penalty at
      any time by the consumer) under which the consumer: (i) Agrees to pay as compensation
      for use a sum substantially equivalent to, or in excess of, the total value
      of the property and service involved; and (ii) Will become (or has the option
      to become), for no additional consideration or for nominal consideration, the
      owner of the property upon compliance with the agreement. (17) Creditor means:
      (i) A person who regularly extends consumer credit that is subject to a finance
      charge or is payable by written agreement in more than four installments (not
      including a down payment), and to whom the obligation is initially payable,
      either on the face of the note or contract, or by agreement when there is no
      note or contract. (ii) For purposes of §§ 1026.4(c)(8) (Discounts), 1026.9(d)
      (Finance charge imposed at time of transaction), and 1026.12(e) (Prompt notification
      of returns and crediting of refunds), a person that honors a credit card . (iii)
      For purposes of subpart B, any card issuer that extends either open-end credit
      or credit that is not subject to a finance charge and is not payable by written
      agreement in more than four installments. (iv) For purposes of subpart B (except
      for the credit and charge card disclosures contained in §§ 1026.60 and 1026.9(e)
      and (f), the finance charge disclosures contained in § 1026.6(a)(1) and (b)
      (3)(i) and § 1026.7(a)(4) through (7) and (b)(4) through (6) and the right of
      rescission set forth in § 1026.15 ) and subpart C, any card issuer that extends
      closed-end credit that is subject to a finance charge or is payable by written
      agreement in more than four installments. (v) A person regularly extends consumer
      credit only if it extended credit (other than credit subject to the requirements
      of § 1026.32 ) more than 25 times (or more than 5 times for transactions secured
      by a dwelling) in the preceding calendar year. If a person did not meet these
      numerical standards in the preceding calendar year, the numerical standards
      shall be applied to the current calendar year. A person regularly extends consumer
      credit if, in any 12-month period, the person originates more than one credit
      extension that is subject to the requirements of § 1026.32 or one or more such
      credit extensions through a mortgage broker. (18) Downpayment means an amount
      , including the value of property used as a trade-in, paid to a seller to reduce
      the cash price of goods or services purchased in a credit sale transaction.
      A deferred portion of a downpayment may be treated as part of the downpayment
      if it is payable not later than the due date of the second otherwise regularly
      scheduled payment and is not subject to a finance charge. (19) Dwelling means
      a residential structure that contains one to four units, whether or not that
      structure is attached to real property. The term includes an individual condominium
      unit, cooperative unit, mobile home, and trailer, if it is used as a residence.
      (20) Open-end credit means consumer credit extended by a creditor under a plan
      in which: (i) The creditor reasonably contemplates repeated transactions; (ii)
      The creditor may impose a finance charge from time to time on an outstanding
      unpaid balance; and (iii) The amount of credit that may be extended to the consumer
      during the term of the plan (up to any limit set by the creditor) is generally
      made available to the extent that any outstanding balance is repaid. (21) Periodic
      rate means a rate of finance charge that is or may be imposed by a creditor
      on a balance for a day, week, month, or other subdivision of a year. (22) Person
      means a natural person or an organization , including a corporation, partnership,
      proprietorship, association, cooperative, estate, trust, or government unit.
      (23) Prepaid finance charge means any finance charge paid separately in cash
      or by check before or at consummation of a transaction, or withheld from the
      proceeds of the credit at any time. (24) Residential mortgage transaction means
      a transaction in which a mortgage, deed of trust, purchase money security interest
      arising under an installment sales contract, or equivalent consensual security
      interest is created or retained in the consumer ''s principal dwelling to finance
      the acquisition or initial construction of that dwelling . (25) Security interest
      means an interest in property that secures performance of a consumer credit
      obligation and that is recognized by State or Federal law. It does not include
      incidental interests such as interests in proceeds, accessions, additions, fixtures,
      insurance proceeds (whether or not the creditor is a loss payee or beneficiary),
      premium rebates, or interests in after-acquired property. For purposes of disclosures
      under §§ 1026.6 , 1026.18, 1026.19(e) and (f), and 1026.38(l)(6), the term does
      not include an interest that arises solely by operation of law. However, for
      purposes of the right of rescission under §§ 1026.15 and 1026.23, the term does
      include interests that arise solely by operation of law. (26) State means any
      state , the District of Columbia, the Commonwealth of Puerto Rico , and any
      territory or possession of the United States. (27) (i) Successor in interest
      means a person to whom an ownership interest in a dwelling securing a closed-end
      consumer credit transaction is transferred from a consumer , provided that the
      transfer is: (A) A transfer by devise, descent, or operation of law on the death
      of a joint tenant or tenant by the entirety; (B) A transfer to a relative resulting
      from the death of the consumer ; (C) A transfer where the spouse or children
      of the consumer become an owner of the property; (D) A transfer resulting from
      a decree of a dissolution of marriage, legal separation agreement, or from an
      incidental property settlement agreement, by which the spouse of the consumer
      becomes an owner of the property; or (E) A transfer into an inter vivos trust
      in which the consumer is and remains a beneficiary and which does not relate
      to a transfer of rights of occupancy in the property. (ii) Confirmed successor
      in interest means a successor in interest once a servicer has confirmed the
      successor in interest ''s identity and ownership interest in the dwelling .
      (28) The Board-selected benchmark replacement for consumer loans means the SOFR-based
      index selected by the Board of Governors of the Federal Reserve System to replace,
      as applicable, the 1-month, 3-month, 6-month, or 12-month tenor of U.S. Dollar
      LIBOR, as set forth in the Board of Governors of the Federal Reserve System
      ''s regulation at 12 CFR part 253 , which implements the Adjustable Interest
      Rate (LIBOR) Act, Public Law 117-103 , division U. (b) Rules of construction.
      For purposes of this part, the following rules of construction apply: (1) Where
      appropriate, the singular form of a word includes the plural form and plural
      includes singular. (2) Where the words obligation and transaction are used in
      the regulation, they refer to a consumer credit obligation or transaction, depending
      upon the context. Where the word credit is used in the regulation, it means
      consumer credit unless the context clearly indicates otherwise. (3) Unless defined
      in this part, the words used have the meanings given to them by state law or
      contract. (4) Where the word amount is used in this part to describe disclosure
      requirements, it refers to a numerical amount . [ 76 FR 79772 , Dec. 22, 2011,
      as amended at 78 FR 80106 , Dec. 31, 2013; 81 FR 72388 , Oct. 19, 2016; 81 FR
      84369 , Nov. 22, 2016; 88 FR 30622 , May 11, 2023; 89 FR 64577 , Aug. 7, 2024;
      89 FR 10683 7, Dec. 30, 2024]'
  judgment: false
