The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F ederal Reserve B ank of Dallas DALLAS, TE X A S 75222 C ir c u la r No. 72-165 A ugust 1972 PROPOSED AMENDMENT TO REGULATION Z ( D i s c l o s u r e t o Home B u yers B e fo r e C lo s in g ) To A l l B an ks, Other C r e d ito r s and O thers Concerned I n t h e E le v e n th F e d e r a l R e se r v e D i s t r i c t : On J u l y 2 7 , 1 9 7 2 , t h e Board o f G overnors o f t h e F e d e r a l R e se r v e System announced a p r o p o se d amendment t o i t s R e g u la t io n Z w it h t h e aim o f h e l p in g home b u y e r s t o shop f o r t h e b e s t a v a i l a b l e c r e d i t te r m s . The amendment w ould r e q u i r e t h a t c r e d i t o r s make t h e d i s c l o s u r e s r e q u ir e d b y t h e A ct t o home b u y e r s , or t o t h o s e s e e k in g t o r e f i n a n c e t h e i r hom es, o f t h e an n u al p e r c e n t a g e r a t e and t h e o th e r term s o f t h e i r l o a n , n o t l e s s th a n t e n days b e f o r e t h e d a t e on w h ich t h e cu stom er e x e c u t e s t h e n o t e or o t h e r e v id e n c e o f d e b t . P r o v isio n i s made f o r t h e cu stom er t o w a iv e t h e t e n - d a y n o t i c e , or any p a r t o f i t , i n t h e e v e n t o f a p e r s o n a l em ergen cy. I n t e r e s t e d p e r s o n s a r e i n v i t e d t o subm it w r i t t e n v ie w s or in fo r m a tio n t o t h e S e c r e t a r y , Board o f G overnors o f t h e F e d e r a l R e se r v e S y stem , W ash in gton , D. C. 2 0 5 5 1 9 or t o t h e R e g u la t io n s D e p a r t m en t, F e d e r a l R e se r v e Bank o f D a l l a s , S t a t i o n K, D a l l a s , Texas 7 5 2 2 2 . Comments s h o u ld be r e c e i v e d n o t l a t e r th a n Septem ber 8 , 1 9 7 2 . A cop y o f t h e p r o p o se d amendment i s e n c l o s e d . Yours very truly, P. E. Coldwell President E n c lo s u r e This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) FEDERAL RESERVE SYSTEM [1 2 CFR PART 226] [Reg. Z] TRUTH IN LENDING Credit Other Than Open End 1. Pursuant to the authority contained in the Truth in Lending Act (15 U.S.C. 1601 et. seq.) the Board of Governors proposes to amend Part 226 (Regulation Z ) , in the manner and for the reasons set forth below: § 226.8(a) would be amended and § 226.8(q) would be added to read as follows: § 226.8--CREDIT OTHER THAN OPEN END— SPECIFIC DISCLOSURES (a) General R u l e . Any creditor when extending credit other than open end credit shall, in accordance with § 226.6 and to the extent applicable, make the disclosures required by this section with respect to any transaction consummated on or after July 1, 1969. Except as otherwise provided in this section, such disclosures shall be made before the transaction is consummated. At the time disclosures are made, the creditor shall furnish the customer with a duplicate of the instrument or a statement by which the required disclosures are made and on which the creditor is identified. Except as provided in paragraph (q) of this section, all of the disclosures shall be made together on either -2 (1) The note or other instrument evidencing the obligation on the same side of the page and above or adjacent to the place for the c ustomer’s signature; (2) or One side of a separate statement which identifies the transaction. it (q) it it it it Purchase or acquisition of a dwelling. In any transaction involving the purchase or acquisition of a dwelling or subsequent refinancing of such transaction, the disclosures required by this section shall be delivered to the customer before consummation of the transaction but not less than 10 business d a y s - ^ ^ b e f o r e the date on which the customer executes the note or other evidence of debt. of paragraph (a) of this section, Notwithstanding the provisions such disclosures may, at the creditor's option, be made on single sides of a multipaged statement which identifies the transaction. In the event of a bona fide personal emergency^ the customer may waive all or a portion of the minimum 10 day period by furnishing the creditor with a separate dated and signed personal state ment describing the personal emergency and stating the number of days being waived. The use of printed forms for such a waiver is prohibited. 13g/ For the purpose of this section, a business day is any calendar day except Sunday and those legal public holidays specified in Section 6103(a) of Title 5 of the United States Code (New Year's Day, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day). -3 2. The amendment to § 226.8(a) involves merely technical changes to accommodate the addition of the new paragraph § 226.8(q). 3. The new paragraph, § 226.8(q), relates only to a consumer credit transaction involving the purchase, a dwelling. acquisition or refinancing of Section 226.8(a) would provide that the required disclosures must be made before consummation of the transaction but not less than 10 business days before the customer executes a note or other evidence of debt. Presently, many creditors follow the practice of making disclosures at the time of settlement, which usually does not enable the customer to shop for more favorable credit terms. proposal, Under the the customer would have a reasonable period to compare credit terms before becoming obligated. The proposal would permit the customer to reduce or waive the 10 day disclosure period in bona fide personal emergencies. The proposal would also allow creditors in such trans actions to use a multipage statement in making the disclosures. This notice is published pursuant to section 553(b) of Title 5, United States Code, and § 262.2(a) of the Rules of Procedure of the Board of Governors of the Federal Reserve System (12 CFR 262.2(a)). To aid in the consideration of these matters by the Board, interested persons are invited to submit relevant data, views, arguments. or Any such material should be submitted in writing to the -4Secretary, the Board of Governors of the Federal Reserve System, Washington, D. C. 20551, or to any Federal Reserve Bank for trans mittal to the Board, to be received at the Board not later than September 8, 1972. Such material will be made available for inspection and copying upon request, except as provided in § 261.6(a) of the Board's Rules Regarding Availability of Information. By order of the Board of Governors, July 20, 1972. Michael A. Greenspan Assistant Secretary of the Board
@FedFRASER