Request for Comment on a Proposal to Revise the Official Staff Commentary to Regulation Z - District

Federal Reserve Bank Of Dallas

Informations

• Publié par: Sakeb
• Nombre de lectures: 49
• Langue: English

Extrait

Federal Reserve Bank
ll K
of Dallas
DALLAS, TEXAS
75265-5906
December 21, 2001
Notice 01-92
TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Request for Comment on a Proposal
to Revise the Official Staff Commentary to Regulation Z
DETAILS
The Board of Governors of the Federal Reserve System has requested public com-
ment on proposed revisions to the Official Staff Commentary to Regulation Z, which implements
the Truth in Lending Act. The commentary applies and interprets the requirements of Regulation
Z. The proposed update would clarify how creditors that place Truth in Lending Act disclosures
on the same document with the credit contract may satisfy the requirement for providing the
disclosures in a form the consumer may keep before consummation.
In addition, the proposed revisions provide guidance on disclosing costs for certain
credit insurance policies and on the definition of “business day” for purposes of the right to
rescind certain home-secured loans.
The Board must receive comments by February 1, 2002. Please address comments to
Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street
and Constitution Avenue, N.W., Washington, DC 20551. Also, you may mail comments elec-
tronically to [e-mail]. All comments should refer to Docket
No. R-1118.
ATTACHMENT
A copy of the Board’s notice as it appears on pages 64381–83, Vol. 66, No. 240 of the
Federal Register dated December 13, 2001, is attached.
For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office [phone]; El Paso Branch Intrastate [phone], Interstate [phone];
Houston Branch Intrastate [phone], Interstate [phone]; San Antonio Branch Intrastate [phone].
- 2 -
MORE INFORMATION
For more information, please contact Eugene Coy, [phone], in the Banking
Supervision Department. For additional copies of this Bank’s notice, contact the Public Affairs
Department at [phone] or access District Notices on our web site at
http://www.dallasfed.org/banking/notices/index.html.64381
Federal RegisterProposed Rules
Vol. 66, No. 240
Thursday, December 13, 2001
Regarding Availability of Information, II. Proposed Revisions
12 CFR 261.12 and 261.14. Subpart A—General
FOR FURTHER INFORMATION CONTACT: Section 226.2—Definitions and Rules of
David A. Stein, Senior Attorney, or Dan Construction
S. Sokolov, Attorney; Division of
2(a) DefinitionsConsumer and Community Affairs,
Board of Governors of the Federal 2(a)(6) Business Day
Reserve System, at (202) 452–3667 orFEDERAL RESERVE SYSTEM Generally, when consumers have a
452–2412; for users of right to rescind a home-secured loan,
Telecommunications Device for the Deaf12 CFR Part 226 they may exercise the right until
(‘‘TDD’’) only, contact (202) 263–4869. midnight of the third business day
[Regulation Z; Docket No. R–1118] following consummation or the deliverySUPPLEMENTARY INFORMATION:
of certain disclosures, whichever occurs
Truth in Lending I. Background last. Comment 2(a)(6)–2 provides that
for purposes of rescission, ‘‘business
AGENCY: Board of Governors of the The purpose of the Truth in Lending day’’ means all calendar days exceptFederal Reserve System. Act (TILA; 15 U.S.C. 1601 et seq.) is to Sundays and the federal legal holidays
ACTION: Proposed rule; official staff promote the informed use of consumer listed in 5 U.S.C. 6103(a). Four legal
commentary. credit by providing for disclosures about holidays are identified in that statute by
its terms and cost. The act requires a specific date. Independence Day, JulySUMMARY: The Board is publishing for
creditors to disclose the cost of credit as 4, is one example. The comment wouldcomment proposed revisions to the
a dollar amount (the finance charge) and be revised to clarify that only the dateofficial staff commentary to Regulation
as an annual percentage rate. Uniformity specified in the statute is considered aZ, which implements the Truth in
legal holiday for purposes of rescission.in creditors’ disclosures is intended toLending Act. The commentary applies
The proposed comment identifies theassist consumers in comparisonand interprets the requirements of
four legal holidays in 5 U.S.C. 6103(a)shopping for credit. TILA requiresRegulation Z. The proposed update
that are defined by a specific date, andadditional disclosures for loans securedwould clarify how creditors that place
provides an example to aid inby consumers’ homes and permitsTruth in Lending Act disclosures on the
compliance. The comment also wouldconsumers to rescind certainsame document with the credit contract
be amended to include a cross-referencetransactions that involve their principalmay satisfy the requirement for
to comment 31(c)(1)–1, which states thatproviding the disclosures in a form the dwelling. In addition, the act regulates
creditors may rely on the definition of
consumer may keep before certain practices of creditors.
‘‘business day’’ used for the rescission
consummation. In addition, the TILA is implemented by the Board’s rule for purposes of complying with the
proposed revisions provide guidance on Regulation Z (12 CFR part 226). The timing requirements in furnishing
disclosing costs for certain credit Board’s official staff commentary (12 disclosures for high-cost loans covered
insurance policies and on the definition CFR part 226 (Supp. I)) interprets the by § 226.32.
of ‘‘business day’’ for purposes of the
regulation, and provides guidance to
right to rescind certain home-secured Section 226.4—Finance Charge
creditors in applying the regulation to
loans.
4(d) Insurance and Debt Cancellationspecific transactions. Good faith
DATES: Comments must be received on Coveragecompliance with the commentary
or before February 1, 2002. affords protection from liability under Under § 226.4(d), amounts paid for
ADDRESSES: Comments should refer to section 130(f) of TILA. The commentary credit insurance or debt cancellation
Docket No. R–1118 and should be is a substitute for individual staff coverage may be excluded from the
mailed to Ms. Jennifer J. Johnson, finance charge if the creditor disclosesinterpretations; it is updated
Secretary, Board of Governors of the the fee or premium for the initial termperiodically to address significant
Federal Reserve System, 20th Street and of coverage, among other conditions.questions that arise. The Board expects
Constitution Avenue, NW., Washington, Comment 4(d)–11 provides that theto adopt final revisions to the
DC 20551, or mailed electronically to initial term is based on the period forcommentary in March 2002; to the
[e-mail]. which the insurer or creditor is initiallyextent the revisions impose new
Comments addressed to Ms. Johnson obligated to provide coverage. Commentrequirements on creditors, compliance
may also be delivered, between 8:45 4(d)–12 provides that creditors have thewould be optional until October 1, 2002,
a.m. and 5:15 p.m., to the Board’s mail option of providing disclosures on thethe effective date for mandatory
facility in the West Courtyard, located basis of one year of coverage, where thecompliance.
on 21st Street between Constitution fee or premium for the coverage is
Avenue and C Street, NW. Members of assessed periodically and the consumer
the public may inspect comments in is under no obligation to continue the
Room MP–500 of the Martin Building coverage after making the initial
between 9 a.m. and 5 p.m. on weekdays payment. Comment 4(d)–12 would be
pursuant to § 261.12, except as provided revised to clarify that this option applies
in § 261.14, of the Board’s Rules even if the consumer can cancel the
VerDate 11<MAY>2000 15:11 Dec 12, 2001 Jkt 197001 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E:\FR\FM\13DEP1.SGM pfrm04 PsN: 13DEP164382 Federal Register/Vol. 66, No. 240/Thursday, December 13, 2001/Proposed Rules
coverage prior to making the initial and how the Board might make the entities may observe the holiday on the
payment. commentary easier to understand. preceding Friday, July 3. The observed
holiday, July 3, is a business day for
List of Subjects in 12 CFR Part 226Subpart C—Closed-End Credit purposes of rescission or the delivery of
Consumer protection, Disclosures, disclosures for certain high-costSection 226.17—General Disclosure
Federal Reserve System, Truth in mortgages covered by § 226.32fi øisRequirements
lending. involved¿.
17(b) Time of Disclosures
* * * * *Text of Proposed Revisions
Creditors must give the required
Certain conventions have been used § 226.4—Finance Chargedisclosures to the consumer in writing,
to highlight the proposed revisions toin a form that the consumer may keep,
the text of the staff commentary. Newbefore consummation of the transaction.
4(d) Insurance and debt cancellationlanguage is shown inside bold-facedSee § 226.17(a)(1) and (b). Comment
coverage.arrow