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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,Bk and th e am ount of the 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 adapted to enable the creditor either the date of the transaction, the sonably obtain the primarily required infor date the transaction was debited to the to 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]