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F e d e r a l R e s e r v e Ba n k
DALLAS, TEXAS

of

Dallas

75222
C i r c u l a r No. 76-78
J u n e 2, 1976

American Revolution Bicentennial

PROPOSALS TO AMEND REGULATION Z AND ATTENDANT AMENDMENT
T ru th -in -L en d in g

TO ALL BANKS, OTHER CREDITORS,
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:

T h e B o a r d of G o v e r n o r s of t h e F e d e r a l R e s e r v e S y s t e m p r o p o s e d s e v e r a l
m o d ific a tio n s to t h e p r o v i s i o n s of R e g u l a ti o n Z t h a t r e q u i r e t h e id e n tific a tio n of t r a n s ­
a c t i o n s c h a r g e d to c o n s u m e r s u s i n g o p e n - e n d c h a r g e a c c o u n t s ( s u c h a s c h a r g e s on a
c r e d it c a r d b illing s ta te m e n t) .
A s o r i g i n a l l y a d o p t e d , e f f e c tiv e J u l y 1, 1976, a c r e d i t o r m u s t p l a c e a n u m ­
b e r , o r sym bol ( s u c h a s a v o u c h e r n u m b e r ) on a b i l l i n g s t a t e m e n t if o t h e r in fo rm atio n
is not a v a i l a b l e to id e n tif y a t r a n s a c t i o n . In t h e l i g h t o f o b j e c t i o n s , t h e B o a rd p r o p o s e s
a n a l t e r n a t i v e p r o c e d u r e . U n d e r t h e p r o p o s a l , c r e d i t o r s u n a b l e to s a t i s f y t h e b a s i c
id e n tif ic a tio n o f t r a n s a c t i o n r e q u i r e m e n t s w ou ld b e p e r m i t t e d to d i s c l o s e s u c h in f o r m a ­
tio n a s t h e y h a v e a v a i l a b l e . But t h e y w o u ld b e r e q u i r e d to t r e a t a n y r e s u l t i n g i n q u i r y
from t h e c o n s u m e r a s t r i g g e r i n g t h e b il l i n g e r r o r p r o c e d u r e s of R e g u l a ti o n Z . T h i s
w o u ld in v o l v e r e m i s s i o n of a n y f i n a n c e c h a r g e s w h e n t h e r e q u i r e d in fo rm a tio n is not
d i s c l o s e d . C r e d i t o r s w o u ld a l s o b e r e q u i r e d , if t h e y u s e d t h e a l t e r n a t i v e m e th o d , to
f u r n i s h d o c u m e n t a r y e v i d e n c e o f t h e t r a n s a c t i o n s w ith o u t c h a r g e .
T h e p r o p o s a l s w o u ld a lso :
— P r o v i d e t h a t , w h e n a t r a n s a c t i o n d i d n o t t a k e p l a c e a t a s e l l e r ' s f ix e d
b u s i n e s s lo c a tio n , a n a p p r o p r i a t e i d e n t i f y i n g d e s i g n a t i o n may b e u s e d
fo r t r a n s a c t i o n s t h a t t a k e p la c e b y m a il, b y p h o n e , a t a c o n s u m e r ' s
home o r on a p u b l i c c o n v e y a n c e , s u c h a s a p l a n e o r t r a i n .
— In t h e c a s e o f p u r c h a s e s in a f o r e i g n c o u n t r y , allo w t h e c r e d i t o r to
i d e n t i f y th e t r a n s a c t i o n b y d a t e o f d e b i t , i n s t e a d o f d a t e o f p u r c h a s e ,
a n d r e q u i r e t h e c r e d i t o r to t r e a t a n y r e s u l t i n g i n q u i r y b y t h e c u s ­
to m e r a s t r i g g e r i n g t h e b i l l i n g e r r o r p r o c e d u r e s o f R e g u l a ti o n Z.
— R e q u i r e a m o r e m e a n in g f u l d e s i g n a t i o n of a s e l l e r ' s n a m e if it is
a b b r e v i a t e d o n a s a l e s v o u c h e r in a w a y t h a t m a k e s id e n tif ic a tio n
d if f i c u lt , o r is e n c o d e d (as b y a s t o r e n u m b e r ) .

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

-

2 -

S in c e fin al a c t io n m ay n o t b e t a k e n on t h e s e p r o p o s a l s b e f o r e J u l y 1, t h e
B o a rd a m e n d e d R e g u la tio n Z a n d t h e r e b y s u s p e n d e d t h e r e q u i r e m e n t s t h a t w o u ld h a v e
g o n e into effect on t h a t d a t e u n til f u r t h e r n o t i c e , b u t n o t l a t e r t h a n S e p t e m b e r 1.
A c o p y o f t h e a m e n d m e n t to R e g u la tio n Z is e n c l o s e d a n d s h o u l d b e filed in
y o u r R e g u l a ti o n s B i n d e r .
In r e q u e s t i n g p u b l i c r e s p o n s e , t h e B o a rd s a i d t h a t it w o u ld like in p a r t i c ­
u l a r to r e c e i v e c o m m e n ts o r in fo rm a tio n c o n c e r n i n g t h e follow ing:
1.

T h e im p a c t of t h e p r o p o s e d c h a n g e s in th e r e g u l a t i o n on p r o b l e m s
some c o n s u m e r s a n d c r e d i t o r s may h a v e r e g a r d i n g t r a n s a c t i o n s
w h ic h o c c u r in f o r e i g n c o u n t r i e s .

2.

Id e n tif ic a tio n o f a n y s p e c ia l o r u n u s u a l t y p e s o f t r a n s a c t i o n s w h ic h
may p r e s e n t p r o b l e m s of d i s c l o s u r e u n d e r t h e r e g u l a t i o n a s p r o ­
p o s e d , a n d w h ic h s h o u l d b e a d d r e s s e d a t t h i s tim e.

3.

P r o b l e m s i n v o l v e d in id e n t i f y i n g p u r c h a s e s t h a t a r e d if f i c u lt to
d e s c r i b e b y d e p a r t m e n t a l c a t e g o r y ( s u c h a s m e r c h a n d i s e th a t m i g h t
b e bought at a v a rie ty o r specialty s h o p ) .

4.

P r o b l e m s o r s u g g e s t i o n s c o n s u m e r s may h a v e r e g a r d i n g id e n t i f y i n g
t r a n s a c t i o n s on t h e i r o p e n - e n d c r e d i t a c c o u n t s t a t e m e n t s in g e n ­
eral .

I n t e r e s t e d p e r s o n s a r e in v i t e d to s u b m i t r e l e v a n t d a t a , v i e w s , o r a r g u m e n t s
c o n c e r n i n g t h i s p r o p o s a l in w r i t i n g to t h e S e c r e t a r y , B o a r d o f G o v e r n o r s o f th e F e d e r a l
R e s e r v e S y s t e m , W a s h i n g to n , D . C . 20551, to b e r e c e i v e d no t l a t e r t h a n J u n e 18, 1976.
P r i n t e d on t h e a t t a c h e d p a g e s is a c o p y o f t h e p r o p o s a l s a s t h e y a p p e a r e d
in t h e FEDERAL REGISTER on May 18, 1976. A d d itio n a l c o p i e s will b e f u r n i s h e d upo n
r e q u e s t to t h e S e c r e t a r y ' s Office of t h i s B a n k . A n y q u e s t i o n s a b o u t t h e p r o p o s e d
a m e n d m e n t to R e g u l a ti o n Z s h o u ld b e d i r e c t e d to o u r R e g u l a ti o n s D e p a r tm e n t a t (214)
651-6169.

Sincerely y o u r s ,
T. W. Plant
F irst Vice President
A tta c h m e n t s

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

TRUTH IN LENDING

AMENDMENT TO REGULATION Zf

Effective May 7, 1976, Section 226.7(b) (1) (ii)
is amended as follows:
SECTION 226.7 — OPEN EN D CRED IT
ACCOUNTS — SPECIFIC DISCLOSURES

f

Section 226.7(b) (1) (ii) as presently written is
hereby amended by the suspension of the July 1,
1976, date for the transition periods provided in
paragraphs (E ) ( 2 ) and ( E ) ( 3 ) thereof; provided
that such suspension shall end not later than Sep­
tember 1, 1976.

For this Regulation to be complete as amended effective May 7, 1976, retain the following:
1) Printed pamphlet as amended effective October 28, 1975;
2) Amendment effective January 21, 1976, Section 226.8(a); and
3) This slip sheet.

20431
FEDERAL RESERVE SYSTEM
112 CFR P art 226 ]
(DMkM No. B-08J6 Bag. Z]

E x t r a c t From
FEDERAL REGISTER,
VOL. 41, NO. 97,
T u e s d a y , May 18, 1976,
p p . 20421 - 20424

TRUTH IN LENDING
D escription o f Transactions; MtseeRancom
Amendments
On Septem ber 19,1975, th e Board pub­
lished in tile F ed era l R e g iste r am end­
m ents to R egulation Z setting fo rth dis­
closure requirem ents lo r identifying
transactions reflected on open end credit
account periodic statem ents a n d for
other purposes (40 FR 43200V. Since
those am endm ents were adopted, ques­
tions have been raised which m ay require
fu rth er am endm ent of th e Regulation.
Accordingly, the Board is publishing for
comment these proposed am endm ents to
Regulation Z which are Intended to
clarify certain requirem ents of th e Regu­
lation, add flexibility to the requirem ents
as necessary, and insure th a t consumers
are ab le to procure complete inform ation
regarding th eir open end credit accounts
quickly and w ithout undue expense. Al­
though th e proposed am endm ents would
have some im pact on so-called ‘‘country
d u b ” billing systems, their m ain effect
would be on creditors who use th e socalled “descriptive” billing systems.
ID ENTIFICATION' OF TRANSACTIONS

U nder-the proposal the requirem ents
fo r identifying transactions o n open end
credit periodic statem ents as required by
§ 226.7(b) (1) (ii) would be changed in
the following w ays:
1. To enhance the clarity of th e text,
a new § 226.7(10 would be added to the
Regulation. This new section would con­
tain. the requirem ents for Identifying
transactions. Section 226.7 (b> (1) (ii)
would merely reference § 226.7(10 and
require th a t th e disclosures set fo rth
therein be made.
2. Presently, ! 226.7(b) (lH U H D ) re­
quires th a t, a fte r October 28, 1977, th e
creditor m ust provide a reference num­
ber or identifying symbol (such as a sales
voucher num ber) which appears on th e
docum ent evidencing th e transaction in
those cases in which th e prim arily re­
quired inform ation is n o t available.
Questions have been raised regarding the
usefulness in many cases of such a num ­
ber or symbol to th e consum er and re­
garding the cost to creditors of Institute
tag a capability to capture th e num ber
or symbol for potential transm ission in
all transactions when it may, in fact, be
needed fo r only a few. The proposed
am endm ent would perm it a creditor,, as
a t present, to provide an identifying
num ber o r symbol when any of th e p ri­
m arily required inform ation Is n o t avail­
able. Alternatively, it would permit^ th e
creditor to disclose only th a t inform a­
tion which Is available an d tre a t any In­
quiry regarding the description or iden­
tification of the transaction as a tim ing
error and an erroneous billing subject to
th e provisions of I 226.14. F urth er, th e
creditor would be required to provide
docum entary evidence of the transaction
w ithout charge.

TM s addHfM* to th e Regulation Is de­
signed to provide am alternative to th e
requirem ent th a t a n identifying num ber
or
be provMted!when the prim arily
required inform a tion is not avaflaMe. I t
is designed to insure a better and m ore
com plete description to th e consum er
w ithout financial disadvantage, to pro­
vide creditors w ith an alternative to th e
cosCB’ requirem ent at devekjptag th e
capability to provide a voucher num ber
tar aB transactions and to supper an in ­
centive for th e creditor to provide a com­
p le te description in the first instance.
The creditor rem ains obligated under the
proposed language to m aintain proce­
dures reasonably adapted to procure th e
prim arily required inform ation.
3. T he proposed am endm ent wouM
provide a n alternative sim ilar to th a t dis­
cussed in paragraph 2 for th e tran sitio n
period provided to creditors to a d ju st
forms, procedures, and com puter pro­
gram s which last until Oetober 28, 1977.
The regulation as published on Septem ­
ber 19; 1975, would have required th e
creditor to provide an identifying num ­
ber o r symbol when the Inform ation re­
garding th e seller’s nam e and address or
description of m erchandise or services
purchased was not available. F urther, it
would have required th e creditor to dis­
close th e date of debiting th e credit
transaction to th e custom er’s account
when th e prim arily required date Is u n ­
available. This proposal would allow th e
creditor th e alternative of providing th a t
inform ation which is available to him
while requiring th e creditor to tre a t any
Inquiry regarding the identification of
th e transaction as a billing error and an
erroneous billing when th e prim arily re­
quired Inform ation is not available of
supplying the identifying num ber or
symbol when prim arily required in­
form ation is n o t available during the
lng the transition period.
4. The language regarding th e tran si­
tion period for compliance, w hich ends
O ctober TS, 197T, has been changed In
tw o other respects. F irst, the language
h as been changed to fu rth er clarify th e
fact th a t th e alternatives provided In th is
section are generally available and th a t
creditors do n o t need to in stitu te proce­
dures reasonably adapted to procure th e
inform ation which will be required to be
disclosed a fte r O ctober 28. 1977. In the
firs t Instance during th is transition
phase.
Second, by a separately adopted
am endm ent of even date* th e B oard sus­
pends the JUte 1,1976. beginning date for
the changeover to th e tran sitio n period
which is due to expire October *28, 1977.
T his b done, because th e am endatory
process may n o t be completed in tlme^
w ithout rescinding or repealing th e entlm e S 22ff.T (bla; (ill. Consequently, th e
requirem ents currently imposed by
§ 22ff.ro> DfII CHTtE) (JX wHl rem ain In
effect u n til dates, for the transition pe­
rio d can be established In accordance
w ith th e outcome of th e am endatory
processes. T he B oard will supply a new
d ate to be not. late r th a n Septem ber 1,
1876. fo r th e b e g b n ln g of th is transition

20422
period when th is am endatory process is
completed. T his new d ate will take into
account the added flexibility w hich m ay
be added by these am endm ents when de­
term ining th e lead tim e necessary fo r
compliance.
5. T he proposed am endm ents would
also provide guidance regarding th e dis­
closure of an address in certain types
of transactions which are n o t encom­
passed w ithin th e usual scenario of a
purchase m ade a t a fixed seller location.
Recognizing th a t it is often problem atic
to assign one address or designation
w hich is helpful to custom ers in all situ a­
tions. W here th e transaction occurs,
fo r example, by telephone o r m ail order,
in th e custom er’s home or a t a non-flxed
location, such as aboard a public convey­
ance, th e proposed am endm ents would
provide some flexibility. They would per­
m it th e creditor to (a) om it the address,
w hich would be especially helpful in
oases where supplying an address could,
In itself, be m isleading, or (b) supply an
address or appropriate designation, such
as “m ail order,” which, in th e creditor’s
opinion, is helpful In Identifying th e
tran sactio n o r in relating th e tran sac­
tio n to a docum ent previously furnished.
Use of th e disclosure provisions of th is
parag rap h should n o t be for th e purpose
of evading or circum venting th e Act or
Regulation Z, however.
6. G uidance for disclosing th e seller’s
nam e in certain cases is also provided by
th e am endm ent. I t would perm it th e
creditor to provide a more complete spell­
ing of a seller’s nam e w hich h as been
alphabetically abbreviated on th e docu­
m en t evidencing th e transaction.
Additionally, when a seller’s nam e h as
been encoded in a way which is n o t
m eaningful to consumers (for example,
where only a store num ber is supplied
on a sales voucher), the creditor m ust
provide the code symbol and a m ore com­
p lete spelling of th e seller's nam e. This
Is intended to provide a basis for iden­
tifying th e transaction if copies of sales
vouchers are n o t retained or allowing
th e custom er to relate th e description
to a sales voucher which he m ay have
retained.
7. Proposed footnote 9d (footnote 7c
as currently w ritten) has been positioned
w ithin th e regulation to indicate th a t all
references to “the sam e person or related
persons” in proposed 1 226.7 (k) are gov­
erned by th e guidelines set fo rth in th a t
footnote.
8. T he language regarding th e dis­
closure of an identifying num ber or sym­
bol w hich appears on th e docum ent
evidencing the transaction has been
changed to indicate th a t such a num ber
or symbol need be supplied only once even
though m ore th a n one of th e prim arily
required pieces of Inform ation m ay be
unavailable.
9. Recognizing th e difficulties of pro­
curing th e prim arily required Inform a­
tion fo r transactions in foreign coun­
tries, th e am endm ent would (a) allow
th e creditor to disclose th e d ate th e
am ount of th e transaction is debited to
th e custom er’s account and (b) use th e
erro r resolution procedure as discussed

in paragraph (2) in all cases w ithout the
obligation to m aintain procedures
adapted to procure the Inform ation in
every Instance. T his provision Is m eant
to be permissive and a creditor may, of
course, disregard it and fully comply
w ith th e requirem ents otherwise imposed
by i 226.7(k).
M is c e l l a n e o u s A m e n d m e n t s

1. T he proposal would am end { 226.7
(b) (1) (iii) to provide th a t the date of
crediting a paym ent or credit to th e cus­
tom er’s account need n o t be disclosed In
those situations where the failure to
credit on any particu lar day will n o t re­
su lt in th e imposition of any finance
charges o r o th er charges upon tb s cus­
tom er. This am endm ent is proposed in
th e belief th a t such a disclosure is of lit­
tle or no value or economic concern to
th e consumer b u t does Impose a substan­
tial cost upon creditors to m ake th e
necessary changeover fo r th e ir billing
systems if they have n o t provided such a
date heretofore. T he requirem ent th a t
paym ents to a custom er’s account be
credited promptly, however, would n o t be
changed or suspended thereby.
2. The proposal would am end g 226.7
(c) (1) to clarify the Board’s in te n t in
its publication of Septem ber 19,1975. The
proposed language for S 226.7(c) (1) per­
m its certain inform ation to be disclosed
oth er th a n on the face of a periodic
statem en t provided th a t th e totals of the
respective debits and credits under each
of the paragraphs referenced therein are
disclosed on th e face of th e periodic
statem ent. Concern had been expressed
th a t th e section, as amended by th e
Septem ber 19 publication, requires dis­
closure of a to tal of all purchases or other
loan transactions and finance charges on
th e face of th e periodic statem ent. This
was n o t th e B oard’s intent.
3. T he proposal am ends { 226.13(1) by
adding a footnote to paragraph 4 specflcally perm itting a creditor to repo rt dis­
puted am ounts under { 226.13(i) as “in
dispute’*b u t n o t as “delinquent.” This is
consistent w ith th e treatm en t of credit
reports under { 226.14 and avoids the im ­
plication th a t a creditor m ust have a dual
credit reporting system which would have
to reflect the different kinds of disputes
th a t may be raised.
T he Board Invites w ritten comment
on th e proposed am endm ents. In partic­
ular, th e B oard would like to receive
comments or inform ation concerning th e
following:
1. The im pact of thp proposed changes
to th e regulation on problems th a t some
consumers and creditors may have re­
garding transactions which occur in for­
eign countries.
2. Identification of any special or u n ­
usual types of transactions which may
present problems of disclosure under th e
proposed regulations and w hich should
be addressed a t this time.
3. ‘th e problems of creditors in de­
scribing on periodic statem ents property
or services obtained from sellers provid­
ing a homogeneous m erchandise line or
property or services w hich are difficult
to describe by departm ental category,

because purchases are m ade a t a cen­
tra l cash register location or for oth er
reasons. Any proposed solutions to those
problems should be Included.
4.
The problems or suggestions con­
sum ers may have regarding Identifying
transactions on th e ir open a id credit
account statem ents in general.
T he deadline for receipt of w ritten
comments on th e proposed am endm ents
is Ju n e 18, 1976. Comments should be
addressed to th e Secretary, B oard of
Governors of th e Federal Reserve Sys­
tem , W ashington, D.C. 20551. Comments
should include a reference to Docket No.
R-0036.
P u rsu ant to the authority granted in
15 U.S.C. S 1604 (1970) th e B oard pro­
poses to am end Regulation Z, 12 CFR
P a rt 226, as follows:
1.
To fully im plem ent f 411, T itle IV,
Pub. L. 93-495, S 226.7(b) (1) (11) would
provide, and a new 1226.7(k) would be
added, as follows:
§ 226.7 O pen E nd C redit Accounts—
Specific Disclosures.

(b) Periodic
(

1)

* * *

*

*

statem ents
•

*

required
*

(11) T he Inform ation required by
I 226.7(k).

*

•

•

•

•

(k) Identification of transactions (1)
Each extension of credit for which an
actual copy of th e docum ent evidencing
th e credit transaction (which does n o t
include a so-called “facsim ile d ra ft”) ac­
companies the periodic statem ent on
which th e transaction is first reflected
shall be identified by disclosing on th e
periodic statem ent, or on accom panying
statem ent(s)
o r docum ent(s), th e
am ount of th e transaction and either
th e date of th e transaction or th e date
th e transaction is debited to th e cus­
tom er’s account.
(2) E ach extension of credit fo r’which
a n actual copy of th e docum ent evidenc­
ing th e credit transaction does n o t ac­
company th e periodic statem en t shall be
Identified by disclosing on or w ith th e
periodic statem en t on w hich th a t credit
transaction is first reflected a t least:
(i) The date on w hich the transaction
took place,B and th e am ount of the
k
transaction; and
(11) A brief identification” of any
property or services purchased for tran s•■> With respect to transactions which are
not billed In fu ll on any single statem ent
but for which precomputed installm ents are
billed periodically, the date the transaction
takes place for purposes of th is paragraph
shall be deemed to be the date on which the
amount is debited to the customer's aceeunt.
,0 Par purposes of this paragraph, desig­
nations such as "merchandise" or “miscel­
laneous” Shall not be considered sufficient
identification of property or services, but a
reference to a department in a sales estab­
lishm ent which accurately conveys the iden­
tification of the type(s) of property or serv­
ices which are available in such department
shall be sufficient under this paragraph. Iden­
tification may be made on an accompanying
slip or by symbol relating to an Identifica­
tion list printed on th e statem ent.

20423
(B) Treat the absence of the informa­
actions In which the creditor and the
seller are the same person or related tion required by 88 226.7(k) (1), (2), or
persons" or the seller’s name (as dis­ (3), as applicable, as a billing error, as
closed on the document evidencing the provided in 88 226.2(j) and 226.14. If a
transaction provided to the customer) customer submits a proper written noti­
and the address (city and State or for­ fication of a billing error relating to the
eign country, using understandable and absence of such Information and the in­
generally accepted abbreviations If the formation was, in fact, not disclosed as
creditor so desires) where the transac­ required by 88 226.7(k) (1), (2), or (3) as
tion took place for transactions in which applicable, the transaction shall be
the creditor and the seller are not the treated as an erroneous billing under
same person or related persons.
§ 226.14(b) and documentary evidence
(3) Notwithstanding the provisions of of the transaction must be furnished
S§ 226.7(k) (1) and 226.7(k)(2), trans­ whether or not the customer requests it
actions involving nonsale credit, such as (despite the provisions of 88 226.2(J) and
a cash advance or an overdraft or other 226.14(a) (2 )), within the time period al­
checking plan transactions, shall be lowed in 8 226.14 for resolution of a bill­
Identified on or with the periodic state­ ing error, without charge to the cus­
ment upon which the transaction Is first tomer.
reflected by providing at least:
(ii) The provisions of 8 226.7<k) (4) (i)
(1) An actual copy of the document shall not relieve the creditor of respon­
evidencing the transaction which shows sibility for maintaining procedures rea­
the amount Of the transaction and
either the date of the transaction, the sonably adapted to enable the creditor
date the transaction was debited to the to obtain the primarily required infor­
customer's account, or the date placed mation at the time the amount of the
on the document or Instrument by the transaction Is transmitted to the creditor
customer (if the customer signed the doc­ for debiting to the customer’s account.
(5) In any case in which a transaction
ument or Instrument) ; or
(li) A description of the transaction, occurs other than in a State:
(i) The creditor may disclose the date
which characterizes it as a cash advance,
loan, overdraft loan, or other designation of debiting the amount of the transac­
as appropriate, and which Includes the tion to the open end credit account In
amount of the transaction and the date place of any other date required else­
of the transaction** or the date which where In 8 226.7 (k ); and
(ii) The provisions of 8 226.7(k) (4) (i)
appears on the document or instrument
evidencing the transaction (if the cus­ (B) shall apply and the creditor need
tomer signed the document or instru­ not maintain procedures reasonably
adapted to procure the Information
ment) .
(4) (1) For any transaction for which otherwise required by 8 226.7(k). (6) In
any of the information required to be complying with the disclosure require­
disclosed under 88 226.7(k) (1), (2), or ments of paragraphs 226.7(k) (1), (2),
(3), as applicable, is not available the ( 3 ) ,or (4):
(A) The creditor may rely upon and
creditor shall disclose that information
disclose the information supplied by the
which is available and shall:
seller with respect to the date and
(A)
Without affecting the customer’s amount of transactions for which the
ability to make inquiry under § 226.14, creditor and the seller are not the same
disclose an identifying number or sym­ person or related persons.
(B) With regard to disclosing the
bol which appears on the document evi­
dencing the transaction given to or used seller’s address where the transaction
took place for purposes of 8 226.7(k) (2)
by the customer at the time of or in con­ (ii), the creditor may omit the address
nection with the transactions, which or provide an address or other suitable
Identifying number or symbol need only designation which, in the creditor’s
be disclosed once for any transaction; or opinion, will assist the customer in
identifying the transaction or in relat­
ing the transaction, as reflected, to a
“ For purposes of paragraph 226.7(k) a document (s) evidencing the transaction
person is not related to the creditor simply previously furnished when no meaning­
because the person and the creditor have an ful address is readily available because
agreement or contract pursuant to which the
person is authorized to honor the creditor’s the transaction took place at a location
credit card under the terms specified In the which is not fixed (for example, aboard
agreement or contract. Franchised or licensed a public conveyance), or In the cus­
sellers of a creditor’s product shall be con­ tomer’s home (in which case “customer’s
sidered to be related to the creditor for pur­ home” or a similar description Is suf­
poses of paragraph 226.7 (k). Sellers who ficient) or because the transaction was
assign or sell open end customer sales ac­ the result of a mall or telephone order
counts to a creditor or arrange for such credit (in which case “telephone order,” “mall
wider an open end credit plan which allows order,” Or similar description is suf­
the customer to use the credit only in trans­
actions with that seller shall be considered ficient) ; provided that, any such dis­
related to the creditor for purposes of closure made or omitted shall not be for
the purpose of circumvention or evasion
I 226.7 (k ).
In cases in which an amount is debited of this Part.
to a customer’s open end credit account
(ill) (A) If the seller’s name as re­
under an overdraft cheeking plan, the date
of debiting the open end credit account quired by } 226.7(k) (2) (11) is alphabeti­
shall be considered the date of the trans­ cally abbreviated or otherwise Incom­
action for purposes of this paragraph.
plete on the document evidencing the

transaction, the creditor may provide a
more complete spelling of the Seller’s
name.
(B)
If the seller’s name as required by
8 226.7(k) (2) (ii) is encoded other than
by alphabetic abbreviation (for example,
by number or symbol not meaningful to
the customer) on the document evi­
dencing the transaction, the creditor
must disclose the encoded symbol as well
as a more complete designation of the
seller’s name In terms understandable by
customers.
(7) (1) As an alternative to the provi­
sions of §8 226.7(k) (1) through 226.7(k)
(5), from (date to be supplied upon com­
pletion of amendatory process! until
October 28, 1977: (A) the creditor may
disclose the date of debiting the amount
of the transaction to the customer’s ac­
count for the date of the transaction or
the date placed on the document evi­
dencing a credit transaction if, due to
operational limitations, either such date
is unavailable to the creditor for pur­
poses of billing; and the creditor may
disclose an Identifying number or symbol
which appears on the document evi­
dencing the credit transaction given to
or used by the customer at the time of or
in connection with the credit transac­
tion in place of the seller’s name and ad­
dress or description of the property or
services purchased if, due to operational
limitations, such information is unavail­
able to the creditor for purposes of bill­
ing; or (B) the creditor may Identify
the transaction by disclosing such informatlpn as is reasonably available and
treating the absence of the Information
required by 88 226.7(k) (1), (2), or (3),
as applicable, as a billing error, as pro­
vided in 88 226.2(j) and 226.14. If a cus­
tomer submits a proper written notifica­
tion of a billing error relating to the ab­
sence of such information and the In­
formation was, In fact, not disclosed as
required by 88 226.7(k) (1). (2), or (3),
as applicable, the transaction shall be
treated as an erroneous billing under
8 226.14(b) and documentary evidence of
the transaction must be furnished
whether or not the custbmer requests it
(despite the provisions of 88 226.2(J) and
226.14(a) (2 )), within the time period al­
lowed in S 226.14 for resolution of a bill­
ing error, without charge to the cus­
tomer.
(ii) The effective date of 88 226.7(k)
(1) through 226.7(k) (6) (1), inclusive, is
[date to be supplied upon completion of
amendatory process]. Until [date to be
supplied upon completion of amendatory
process], the creditor shall disclose the
date of each extension of credit or the
to the account during the billing cycle,
date such extension of credit is debited
the amount of such extension of credit
and, unless previously furnished, a brief
identification" of any goods or services
purchased or the extension of credit.
2. Section 226.7(b)(1) (iii) would be
amended by the deletion of the period at
,r Identification may be made • * an ac­
companying slip or by symbol relating to an
Identification list printed on the statem ent.

20424
(he end thereof and the addition o f the
following: ", except that the date of
crediting to the customer’s account need
-not be provided if a delay in crediting
does not result in the imposition of any
finance charges, late payment charges, or
other charges for that billing cycle or a
later billing cycle.**
3. Section 226.7(c)(1) would be
amended to read as follows:
§ 226.7 O pen end credit accounts— spe­
cific disclosures.

•

*

•

+

•

(c) * * *
(1)
The information required to be
disclosed under paragraph (b) (1) (ii) of
this section and Itemization of the
amounts and dates required to be dis­
closed under paragraph (b)(1) (ill) of
this section and of the amount of any
finance charge required to be disclosed
under paragraph (b) (1) (iv) of this sec­
tion may be made on the reverse side of
the periodic statement or on a separate
accompanying statem ent(s), provided
that the-totals of the respective debits
and credits under each of those para­
graphs are disclosed on the face of the
periodic statement.
4. Section 226.13(1) (4) would be
amended to add a footnote as follows:
g 226.13 C redit card transactions—spe­
cial requirem ents.
s

•

*

*

«

(1)
Right of cardholder to assert
claims or defenses against card is­
suer. • • •
(4)
If the cardholder refuses to pay
the amount of credit outstanding with
respect to the property or services which
gave rise to the claim (s) or defense(s)
under this section, the creditor may not
report to any person that particular
amount as delinquent until the dispute
Is settled or judgment is rendered.1
”*
By order of the Board of Governors,
May 7,1976.
T h e o d o re E . A llis o n ,

Secretary of the Board.
[!RDoc.76-14383 Filed 5-17-76:8:46 am]


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102