How many days prior must Community Credit Card Company notify its borrowers about an increase in the annual membership fee?

Study for the CFPB Mortgage Compliance Test. Learn with detailed quizzes and flashcards. Understand the key concepts, regulations, and guidelines with comprehensive explanations. Get ready to ace your exam!

The correct answer is that Community Credit Card Company must notify its borrowers 45 days prior to an increase in the annual membership fee. This requirement ensures that borrowers are given adequate time to assess the impact of the fee increase on their finances and make informed decisions.

The rule is designed to promote transparency and consumer protection in lending practices. By providing 45 days' notice, the company allows its customers to consider whether they want to continue using the credit card with the higher fee or possibly seek alternative options. This timeframe is outlined in the regulations governing credit card issuers, which mandate that changes to membership fees must be communicated clearly and in advance to maintain fairness in the lending process.

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