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Federal R eserve Bank
OF DALLAS
R O B E R T D. M C T E E R , J R .
p resid en t
DALLAS, TEXAS
AND C H I E F E X E C U T I V E O F F I C E R
7 5 2 6 5 -5 9 0 6
February 6, 1997
Notice 97-17
TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
Proposed Revisions to Regulation Z
(Truth in Lending) and Interim Rule Amending
Regulation C (Home Mortgage Disclosure)
DETAILS
The Board of Governors of the Federal Reserve System is requesting comment on
proposed revisions to Regulation Z (Truth in Lending). The revisions would give creditors the
option to either disclose a fifteen-year historical example or to give a statement that the periodic
payment may substantially increase or decrease, together with a maximum interest rate and
payment based on a $10,000 loan. The proposed changes to the regulation apply to variable-rate
loans with more than a one-year maturity and secured by the consumer’s principal dwelling.
The Board must receive comments by February 28, 1997. Please address comments
to William W. Wiles, Secretary, Board of Governors of the Federal Reserve System, 20th Street
and Constitution Avenue, N.W., Washington, D.C. 20551. All comments should refer to Docket
No. R-0960.
In addition, the Board has published an interim rule amending Regulation C (Home
Mortgage Disclosure). The amendment increases the asset-size exemption threshold for
depository institutions from $10 million to $28 million. The rule applies to all data collection in
1997.
ATTACHMENTS
Copies of the Board's notices as they appear on pages 5183-86, Vol. 62, No. 23, of
the Federal Register dated February 4, 1997, and pages 3496-97, Vol. 62, No. 16, of the Federal
Register dated January 24, 1997, are 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 (800) 333 -4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston
Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)
-2-
MORE INFORMATION
For more information, please contact Eugene Coy at (214) 922-6201. For additional
copies of this Bank's notice, please contact the Public Affairs Department at (214) 922-5254.
Sincerely yours,
Federal Register / Vol. 62, No. 23 / Tuesday, February 4, 1997 / Proposed Rules
on 20th Street, N.W. (between
Constitution Avenue and C Street) at
any time. Comments w ill be available
for inspection in Room M P-500 of the
Martin Building between 9:00 a.m. and
5:00 p.m. weekdays, except as provided
in 12 CFR 261.8 of the Board’s rules
regarding the availability of information.
FEDERAL RESERVE SYSTEM
12CFR Part 226
[Regulation Z; Docket No. R-0960]
Truth in Lending
AGENCY: Board of Governors of the
Federal Reserve System.
ACTION: Proposed rule.
SUMMARY: The Board is publishing for
comment proposed revisions to
Regulation Z. The revisions im plem ent
an am endm ent to the Truth in Lending
Act contained in the Economic Growth
and Regulatory Paperwork Reduction
Act of 1996 affecting the disclosure of
a fifteen-year historical example of rates
and payments. The am endm ent applies
to variable-rate loans w ith a term
exceeding one year and secured by the
consum er’s principal dwelling. The
am endm ent allows creditors either to
disclose a fifteen-year historical
example or to give a statement that the
periodic paym ent may substantially
increase or decrease together w ith a
m axim um interest rate and paym ent
based on a $10,000 loan.
DATES: Comments m ust be received on
or before February 28, 1997.
ADDRESSES: Comments should refer to
Docket No. R-0960, and may be mailed
to William W. Wiles, Secretary, Board of
Governors of the Federal Reserve
System, 20th Street and Constitution
Avenue, N.W., W ashington, DC 20551.
Comments also may be delivered to the
Board’s mail room between 8:45 a.m.
and 5:15 p.m. weekdays, or to the
security control room at all other times.
The m ail room and the security control
room are accessible from the courtyard
5183
provide disclosures at three different
times—w hen an application is received
(or w hen a nonrefundable fee is paid,
w hichever occurs earlier), prior to
consum m ation, and subsequent to
consum m ation w hen certain rate or
paym ent changes occur. (See Regulation
Z, 12 CFR 226.17(b), 18(f), 19, and
20(c).)
FOR FURTHER INFORMATION CONTACT:
Disclosures provided at application
Kyung H. Cho-Miller, Staff Attorney,
for a variable-rate mortgage include the
Division of Consumer and Community
Board-prescribed Consum er H andbook
Affairs, Board of Governors of the
on A djustable Rate Mortgages (or a
Federal Reserve System, at (202) 452—
suitable substitute) and a loan program
3667 or 452-2412; for users of
Telecommunications Device for the Deaf disclosure for each variable-rate
(TDD) only, contact Dorothea Thompson program the consum er is interested in.
The loan program disclosure consists of
at (202) 452-3544.
twelve separate items as they apply to
SUPPLEMENTARY INFORMATION:
a variable-rate program, including
information such as the identification of
I. B a ck grou n d
the index or formula to be used for
The purpose of the Truth in Lending
adjustm ents and a fifteen-year historical
Act (TILA) (15 U.S.C. 1601 et seq.) is to
example of how changes in the index
promote the inform ed use of consumer
values or formula used to compute
credit by requiring disclosures about its
interest rates w ould have affected the
terms and cost. The act requires
interest rates and paym ents on a
creditors to disclose the cost of credit as $10,000 loan.
a dollar am ount (the finance charge) and
On September 30, 1996, the Economic
as an annual percentage rate (the APR).
Growth and Regulatory Paperwork
Uniformity in creditors’ disclosures is
Reduction Act of 1996 (Pub. L. 104-208,
intended to assist consum ers in
110 Stat. 3009) (1996 amendment)
com parison shopping. The TILA
am ended the TILA by providing
requires additional disclosures for loans creditors the option to give a statement
secured by a consum er’s home and
that the periodic paym ents may increase
perm its consumers to rescind certain
or decrease substantially together w ith
transactions that involve their principal
the m axim um interest rate and paym ent
dwelling. The act is im plem ented by the am ount for a $10,000 loan in lieu of the
Board’s Regulation Z (12 CFR Part 226).
fifteen-year historical example.
The credit transactions covered by
The Board proposes to im plem ent the
TILA and Regulation Z fall into two
TILA am endm ent as discussed below.
categories—open- or closed-end credit
transactions. O pen-end credit is defined III. S ectio n -b y -S ec tio n A n a ly sis
as a plan under w hich the creditor
Subpart A — General
reasonably contemplates repeated
transactions, w hich prescribes the terms Section 226.19—Certain Residential
Mortgage Transactions
of such transactions, and w hich
19(b) Certain variable-rate
provides for a finance charge that may
transactions. Section 226.19(b) requires
be com puted from time to time on the
the historical example disclosure for
outstanding unpaid balance, for
loans exceeding a term of one year that
example, credit extended by means of a
are secured by a consum er’s principal
credit card (§ 226.2(a)(20)). Closed-end
dwelling and where the APR may
credit is defined as any credit
increase after consum m ation (such as
arrangement that does not fall w ithin
w hen the rate is tied to an index). The
the definition of open-end credit
1996 am endm ent does not explicitly
(§ 226.2(a)(10)). A mortgage loan w ith a
limit application of the alternative
definite m aturity date is an example of
disclosure to loans that exceed a term of
closed-end credit.
one year. The Board believes, however,
I I . P ro p o sed R eg u lato ry P ro v isio n s
that the am endm ent was intended to
Under Regulation Z, the timing and
apply only to loans w here the fifteennum ber of disclosures required for
year historical example is currently
variable-rate loans vary depending on
required, nam ely loans that exceed one
the term and security for the loan. For
year. Accordingly, the Board proposes
all variable-rate loans, disclosures are
to apply the alternative disclosure
generally provided once—prior to
option to variable-rate loans w ith a term
consummation. However, if the loan
greater than one year and secured by the
exceeds a term of one year and is
consum er’s principal dwelling.
The 1996 am endm ent uses the term
secured by the consum er’s principal
“residential mortgage transactions,” a
dwelling, creditors are required to
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Federal Register / Vol. 62, No. 23 / Tuesday, February 4, 1997 / Proposed Rules
term defined in Regulation Z
(§ 226.2(a)(24)) as credit secured by the
consum er’s principal dwelling to
finance the acquisition or initial
construction of that dwelling. The Board
believes that the Congress did not
intend to lim it the flexibility in the 1996
am endm ent to purchase-m oney
transactions, but rather intended to
provide this option to all credit
transactions secured by the consum er’s
principal dwelling, given that the
committee report to the 1996
am endm ent broadly states the
alternative disclosure w ould be
available to lenders in consum er credit
transactions under closed-end plans.
Paragraph 19(b)(2)(viii) currently sets
forth the required historical example
based on a $10,000 loan am ount and
paragraph 19(b)(2)(x) the required
disclosure of the m axim um interest rate
and paym ent for a $10,000 loan. To
make clear that creditors may elect to
provide either of the two disclosures,
paragraph 19(b)(2)(viii) w ould be
revised. The historical example
requirem ents are contained in paragraph
(19(b)(2)(viii)(A); the substance of
paragraph 19(b)(2)(x) is redesignated as
19(b)(2)(viii)(B). The proposal provides
that if the creditor chooses to disclose
the m axim um interest rate and payment
in lieu of a historical example, a
statem ent that the periodic paym ent
may increase or decrease substantially
m ust accompany the rate and paym ent
am ount. The statem ent requirem ent may
be satisfied by the disclosure in
paragraph 19(b)(2)(vi) if it states for
example, “your m onthly paym ent can
increase or decrease substantially based
on annual changes in the interest rate.”
Regulation Z currently requires
creditors to disclose a m axim um interest
rate using the most recent interest rate
show n in the historical example.
Because the historical example is not
required under the 1996 amendments,
creditors instead m ust use a “recent”
interest rate as determ ined by the Board.
The Board proposes to require creditors
to calculate the m axim um rate and
paym ent based on an initial rate that
was in effect w ithin one year of the
disclosure. The Board believes that a
more frequent basis for updating the
index or formula w ould place more
burden on creditors than currently
exists u nder the regulation and that the
Congress intended to reduce burden
w ith the alternative. Creditors w ould
have to calculate the m axim um rate and
paym ent on an initial rate in effect
w ithin one year of the date the loan
program is provided and to disclose the
applicable m onth and year. For
example, using the information in
appendix H—14, the disclosure could
state “the initial interest rate is 9.71
percent, the rate in effect January 1987.”
The Board solicits comment on w hether
there are circumstances where there is
consum er benefit in updating the initial
rate more frequently than annually that
w ould outweigh the compliance burden
of producing the disclosures more
frequently.
IV. F orm o f C om m en t Letters
Comment letters should refer to
Docket No. R-0960, and, w hen possible,
should use a standard courier typeface
w ith a type size of 10 or 12 characters
per inch. This w ill enable the Board to
convert the text in machine-readable
form through electronic scanning, and
w ill facilitate autom ated retrieval of
comments for review. Also, if
accom panied by an original docum ent
in paper form, comments may be
subm itted on 3 1/2 inch or 5 1/4 inch
com puter diskettes in any IBMcompatible DOS-based format.
The com m ent period ends on
February 28, 1997. Normally, the Board
provides a 60-day comment period, in
keeping w ith the Board’s policy
statement on rulemaking (44 FR 3957,
January 19, 1979). The proposed
regulatory revisions im plem ent changes
in the law that provide regulatory
compliance relief. The Board believes
that an abbreviated comment period is
desirable to ensure that a final rule is in
place as soon as possible to provide
guidance to creditors affected.
V. R eg u latory F le x ib ility A n a ly sis
In accordance w ith section 3(a) of the
Regulatory Flexibility Act (5 U.S.C.
603), the Board’s Office of the Secretary
has review ed the proposed am endm ents
to Regulation Z. Overall, the
am endm ents are not expected to have
any significant impact on small entities.
The proposed regulatory revisions
required to im plem ent the 1996
am endm ent reduce the num ber of
disclosure required for variable-rate
mortgages and ease com pliance by
providing creditors w ith the option of
either providing a fifteen-year historical
example or the m axim um paym ent
example. A final regulatory flexibility
analysis w ill be conducted after
consideration of comments received
during the public com m ent period.
VI. P a p er w o rk R e d u c tio n A ct
In accordance w ith the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.), the Board has reviewed the
proposed am endm ents under the
authority delegated to the Board by the
Office of Management and Budget. 5
CFR part 1320, A ppendix A.I.
Comments on the collection or
disclosure of information associated
w ith this regulation should be sent to
the Office of Management and Budget,
Paperwork Reduction Project (7100
0199), W ashington, DC 20503, w ith
copies of such comments to be sent to
Mary M. McLaughlin, Chief, Financial
Reports Section, Division of Research
and Statistics, Mail Stop 97, Board of
Governors of the Federal Reserve
System, Washington, DC 20551.
The respondents are individuals or
businesses that regularly offer or extend
consumer credit. The purpose of the
TILA and Regulation Z is to promote the
informed use of consum er credit by
requiring creditors to disclose its terms
and cost. Records m ust be retained by
creditors for 24 months. The revisions to
the requirem ents in this proposed
regulation are found in 12 CFR 226.19
and appendix H.
The Board’s Regulation Z applies to
all types of creditors, not just state
member banks. U nder the Paperwork
Reduction Act, however, the Federal
Reserve accounts for the paperw ork
burden associated w ith Regulation Z
only for state member banks. Any
estimates of paperwork burden for
institutions other than state member
banks that w ould be affected by the
proposed am endm ents are to be
provided by the federal agency or
agencies that supervise those lenders.
The proposed changes are not
expected to increase the ongoing annual
burden of Regulation Z. There are 1,042
state mem ber banks w ith an estimated
5,750 disclosures, 6.5 m inutes for each
disclosure, for closed-end credit per
state member bank annually. The
proportion of such loans that are
mortgages w ith an adjustable rate is
estimated to be small. If all state
member banks chose to eliminate the
fifteen-year historical example from all
their disclosures on such loans, the
average time required for each
disclosure w ould decrease by 2 minutes.
The combined annual burden for all
state mem ber banks under Regulation Z
is estimated to be 1,975,600 hours; the
combined annual cost is estim ated to be
$39.5 m illion (an average of $37,920 per
state mem ber bank). The Federal
Reserve estimates that there w ould be
associated start-up cost of $160 per
respondent to elim inate either the
fifteen-year historical example or the
m axim um paym ent example.
The disclosures made by creditors to
consumers under Regulation Z are
mandatory. Since the Federal Reserve
does not collect any information, no
issue of confidentiality arises.
Disclosures relating to specific
transactions or accounts are not publicly
available.
Federal Register / Vol. 62, No. 23 / Tuesday, February 4, 1997 / Proposed Rules
Comments are invited on: (a) w hether
the proposed revised collection of
inform ation is necessary for the proper
performance of the Federal Reserve’s
functions; including w hether the
inform ation has practical utility; (b) the
accuracy of the Federal Reserve’s
estimate of the burden of the proposed
disclosures, including the cost of
compliance; (c) ways to enhance the
quality, utility, and clarity of the
information disclosures; and (d) ways to
m inim ize the burden of information
disclosures on respondents, including
through the use of autom ated
techniques or other forms of information
technology.
An agency may not collect or sponsor
the collection or disclosure of
information, and an organization is not
required to collect or disclose
inform ation unless a currently valid
OMB control num ber is displayed. The
OMB control num ber for Regulation Z is
7100-0199.
List o f S ubjects in 12 CFR Part 226
Advertising, Federal Reserve System,
Mortgages, Reporting and recordkeeping
requirements, Truth in lending.
T ext o f P ro p o sed R e v isio n s
Certain conventions have been used
to highlight the proposed revisions to
the regulation. New language is shown
inside bold-faced arrows, while
language that w ould be deleted is set off
w ith bold-faced brackets.
For the reasons set forth in the
preamble, the Board proposes to amend
12 CFR Part 226 as follows:
PART 226—TRUTH IN LENDING
(REGULATION Z)
1. The authority citation for part 226
continues to read as follows:
Authority: 12 U.S.C. 3806; 15 U.S.C. 1604
and 1637(c)(5).
2. Section 226.19 w ould be am ended
by:
a. Republishing the introductory text
of paragraph (b)(2);
b. Revising paragraph (b)(2)(viii);
c. Removing paragraph (b)(2)(x); and
d. Redesignating paragraphs (b)(2)(xi),
(b)(2)(xii), and (b)(2)(xiii) as paragraphs
(b)(2)(x), (b)(2)(xi) and (b)(2)(xii)
respectively.
The revisions w ould read as follows:
consum er expresses an interest. The
following disclosures, as applicable,
shall be provided:
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(viii) Either of the following:
(A) An historical example, based on a
$10,000 loan amount, illustrating how
paym ents and the loan balance w ould
have been affected by interest rate
changes im plem ented according to the
terms of the loan program. The example
shall be based upon index values
beginning in 1977 and be updated
annually until a 15-year history is
shown. Thereafter, the example shall
reflect the m ost recent 15 years of index
values. The example shall reflect all
significant loan program terms, such as
negative amortization, interest rate
carryover, interest rate discounts, and
interest rate and paym ent limitations,
that w ould have been affected by the
index movem ent during the period.
(B) The m axim um interest rate and
paym ent for a $10,000 loan assuming
the m axim um periodic increases in rates
and paym ents under the program; the
initial interest rate and paym ent for that
loan along w ith the m onth and year the
rate was in effect (based on a rate in
effect w ithin one year of the date the
disclosures are provided); and a
statement that the periodic paym ent
m ay increase or decrease substantially
depending on changes in the rate.
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[(x) The m axim um interest rate and
paym ent for a $10,000 loan originated at
the m ost recent interest rate show n in
the historical example assuming the
m axim um periodic increases in rates
and paym ents under the program; and
the initial interest rate and paym ent for
that loan.]
[(xi)] (x) The fact that the loan
program contains a dem and feature.
[(xii)] (xi) The type of information that
will be provided in notices of
adjustments and the timing of such
notices.
[(xiii)] (xii) A statem ent that disclosure
forms are available for the creditor’s
other variable-rate loan programs.
3.
In part 226, A ppendix H is
am ended by revising the three
paragraphs preceding the example in
the H -14 Variable-Rate Mortgage
Sample to read as follows:
A p p e n d ix H to Part 2 2 6 — C lo sed -en d
M od el F orm s a n d C la u ses
§226.19 Certain residential mortgage and
variable-rate transactions.
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(b) Certain variable-rate transactions.
H -14 Variable-Rate Mortgage Sam ple
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(2) A loan program disclosure for each
variable-rate program in w hich the
H ow Your M onthly P aym ent Can Change
•
Your m onthly paym ent can [change
yearly] increase or decrease substantially
based on annual changes in the interest rate.
5185
• For example, on a $10,000, 30-year loan
w ith an initial interest rate of 9.71 percent
the rate [shown in the interest rate colum n
below for the year 1987] in effect in January
1987, the m axim um am ount th at the interest
rate can rise un der this program is 5
percentage points, to 14.71 percent, and the
m onthly paym ent can rise from a first-year
paym ent of $85.62 to a m axim um of $123.31
in the fourth year.
• You w ill be notified in w riting 25 days
before the annual paym ent adjustm ent m ay
be made. This notice w ill contain
inform ation about your interest rates,
paym ent am ount and loan balance.
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4. In Supplem ent I to Part 226, under
Section 226.19— Certain R esidential
Mortgage and Variable-Rate
Transactions, under paragraph 19(b)
Certain variable-rate transactions, the
following am endm ents w ould be made:
a. The heading “Paragraph
19(b)(2)(viii)” w ould be revised to read
‘‘Paragrap h 19(b)(2)(viii)(A);”
b. The heading “Paragraph
19(b)(2)(x)” w ould be revised to read
“Paragraph 19(b)(2)(viii)(B)” and the
paragraph heading and text are
transferred immediately preceding
Paragraph 19(b)(2)(ix).
c. Paragraph 1, under the heading
“Paragraph 19(b)(2)(viii)(B)” w ould be
revised.
d. The heading “Paragraph
19(b)(2)(xi)” w ould be revised to read
“Paragraph 19(b)(2)(x).”
e. The heading “Paragraph
19(b)(2)(xii)” w ould be revised to read
“Paragraph 19(b)(2)(xi).”
f. The heading “Paragraph
19(b)(2)(xiii)” w ould be revised to read
“Paragraph 19(b)(2)(xii).”
The revisions w ould read as follows:
Supplem ent I-Official Staff Interpretations
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SUBPART C—CLOSED-END CREDIT
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Section 226.19— Certain R esidential
Mortgage Transactions
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19(b) Certain variable-rate transactions
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Paragraph 19(b)(2)(viii)(A)
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Paragraph 19(b)(2)[(x)](viii)(B)
1. Initial and m a xim u m interest rate and
paym ent. The disclosure form m ust state the
initial and m axim um interest rates and
paym ents for a $10,000 loan originated at the
most recent interest rate (index value plus
margin) [shown in the historical example] in
effect w ithin one year of the date the
disclosure is provided. The m onth and year
the rate is effective m ust be included in the
disclosure. In calculating the m axim um
paym ents u nd er this paragraph, a creditor
should assume that the interest rate increases
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Federal Register / Vol. 62, No. 23 / Tuesday, February 4, 1997 / Proposed Rules
as rapidly as possible u n der the loan
program, and the m axim um paym ent
disclosed should reflect the am ortization of
the loan during this period. Thus, in a loan
w ith 2 percentage p oint annual {and 5
percentage point overall) interest rate
lim itations or “caps,” the m axim um interest
rate w ould be 5 percentage points higher
than the [most recent rate show n in the
historical example] initial rate disclosed.
Moreover, the loan w ould n ot reach the
m axim um interest rate u ntil the fourth year
because of the 2 percentage point annual rate
lim itations, and the m axim um paym ent
disclosed w ould reflect the am ortization of
the loan during this period. If the loan
program includes a discounted or prem ium
initial interest rate, the [most recent rate
show n in the historical example] initial rate
should be adjusted by the am ount of the
discount or prem ium reflected elsewhere in
the disclosure for purposes of the
requirem ents of this paragraph. Furthermore,
this disclosure should state the am ount by
w hich the most recent rate has been adjusted,
(see the com mentary to § 226.19(b)(2)(viii)
regarding disclosure of the am ount of a
discount or prem ium .) The creditor may use
an interest rate applicable to the program that
is more recent than the [latest rate show n in
the historical example] initial rate.
example or an initial rate and m axim um rate
and paym ent example; both are illustrated in
the sam ple disclosure. The historical
example explains how the m onthly paym ent
can change based on a $10,000 loan amount,
payable in 360 m onthly installm ents, based
on historical changes in the values for the
weekly average yield on U.S. treasury
securities adjusted to a constant m aturity of
one year. Index values are measured as of the
first w eek ending in July for the years 1977
through 1987. This reflects the requirem ent
that the index history be based on values for
the same date or period each year beginning
w ith index values for 1977. The [sample
disclosure also illustrates the requirem ent
un der § 226.19(b)(2)(x) that the] initial and
the m axim um interest rates and paym ents
[be] are show n for a $10,000 loan originated
at th e m ost recent rate [shown in the
historical example] in effect w ithin one year
of the date the loan program is provided
along w ith the m onth and year the rate was
in effect. In th e sam ple, the loan is assumed
to have an initial interest rate of 9.71 percent
(w hich was the interest rate in [1987 for the
example shown] in effect January 1987) and
to have 2 percentage point annual (and 5
percentage point overall) interest rate
lim itations or caps. * * *
*
By order of the Board of Governors of the
Federal Reserve System, January 24,1997.
W illiam W. Wiles,
Secretary o f the Board.
[FR Doc. 97-2293 Filed 2 -3 -97 ; 8:45 am]
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Paragraph 19(b)(2)[(xi)](x)
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Paragraph 19(b)(2)[(xii)l (xi)
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Paragraph 19(b)(2)[(xiii)] (xii)
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5. In Supplem ent I to Part 226, all
references to “section 226.19(b)(2)(viii)”
are revised to read “ section
226.19(b)(2)(viii)(A)” .
6. In Supplem ent I to Part 226, all
references to “com m ent 19(b)(2)(viii)”
are revised to read “ comment
19(b)(2)(viii)(A)” .
7. In Supplem ent I to Part 226, all
references to “ section 226.19(b)(2)(x)”
are revised to read “ section
226.19(b)(2)(viii)(B)” .
8. In Supplem ent I to Part 226, all
references to “comment 19(b)(2)(x)” are
revised to read “comment
19(b)(2)(viii)(B)” .
9. In Supplem ent I to Part 226,
A ppendix H—Closed-End Model Forms
and Clauses, Paragraph 18, w ould be
am ended by removing the fourth
through the eighth sentences and adding
seven new sentences in their place to
read as follows:
*
*
*
*
*
A ppendix H—Closed-End M odel Forms, and
Clauses
*
*
*
*
*
18. Sam ple H -14. * * * It includes
inform ation on how the interest rate is
determ ined and how it can change over
time[, and]. Section 226.19(b)(2)(viii) perm its
creditors to provide either an historical
*
*
*
*
*
BILLING CODE 6210-01-P
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Interim Rule Amending
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Regulation C
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(Home Mortgage Disclosure)
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Docket No. R-0951
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Rules and Regulations
Federal Register
Vol. 62, No. 16
Friday, January 24, 1997
FEDERAL RESERVE SYSTEM
12 CFR Part 203
[Regulation C; Docket No. R-0951]
Home Mortgage Disclosure
Board of Governors of the
Federal Reserve System.
ACTION: Interim rule.
AGENCY:
The Board is publishing an
interim rule that amends Regulation C
(Home Mortgage Disclosure). The
am endm ent increases the asset-size
exem ption threshold for depository
institutions from $10 m illion to $28
million.
DATES: Effective date: February 1, 1997.
A pplicability date: This rule applies
to all data collection in 1997.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Manley W illiams, Staff Attorney,
Division of Consumer and Community
Affairs, Board of Governors of the
Federal Reserve System, at (202) 452
3667; for the hearing im paired only,
Dorothea Thompson,
Telecommunications Device for the
Deaf, at (202) 452-3544.
SUPPLEMENTARY INFORMATION:
A m endm ents to the Home Mortgage
Disclosure Act (HMDA) contained in the
Economic Growth and Regulatory
Paperwork Reduction Act of 1996 (Pub.
L. 104-208, 110 Stat. 3009) increased
the asset-size exem ption threshold for
depository institutions, w hich in the
past were exempt from HMDA if they
had assets of $10 m illion or less. The
am endm ents adjust the $10 m illion
figure based on the percentage by w hich
the Consumer Price Index for Urban
Wage Earners and Clerical Workers
(CPIW) for 1996 exceeds the CPIW for
1975—rounded to the nearest million.
The new threshold is $28 million. Thus
depository institutions w ith assets of
$28 m illion or less as of December 31,
1996, are exempt from data collection in
1997.
In December, the Board published
proposed am endm ents to Regulation C
(61 FR 68168, December 27, 1996) to
im plem ent the new exemption
threshold for depository institutions and
other statutory changes. The comment
period for those am endm ents ends
February 25, 1997.
The Board is publishing an interim
rule w ith respect to the new threshold,
w hich is applicable as of January 1,
1997, so that institutions that are no
longer covered can avoid collecting data
unnecessarily. The Board expects to
publish a final rule in M arch that will
also address changes to the threshold in
future years.
R eg u lato ry F le x ib ility A n a ly sis
This interim rule reduces the burden
on small entities by increasing the
exem ption threshold for depository
institutions. A final regulatory
flexibility analysis of the final rule w ill
be prepared after consideration of
comments received during the comment
period.
P a p erw o r k R ed u c tio n A ct A n a ly sis
In accordance w ith the Paperwork
Reduction Act of 1995 (44 U.S.C. 3506;
5 CFR 1320 A ppendix A .l), the Board
reviewed the interim rule under the
authority delegated to the Board by the
Office of Management and Budget. No
collection of information pursuant to
the Paperwork Reduction Act is
contained in the interim rule.
L ist o f Subjects in 12 CFR Part 203
Banks, Banking, Consumer protection,
Federal Reserve System, Mortgages,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, the Board amends 12 CFR
part 203 as follows:
PART 203— HOME MORTGAGE
DISCLOSURE (REGULATION C)
1. The authority citation for part 203
continues to read as follows:
Authority: 12 U.S.C. 2801-2810.
§203.3
[Amended]
2. In section 203.3, paragraph (a)(l)(ii)
is am ended by revising the figure “$10
m illion” to read “$28 m illion” .
Federal Register / Vol. 62, No. 16 / Friday, January 24, 1997 / Rules and Regulations
Appendix A to Part 203
[Amended]
3. A ppendix A to Part 203 is am ended
as follows:
a. Paragraph I.A .l. is am ended by
revising the figure “$10 m illion” to read
“ $28 m illion” ; and
b. The undesignated paragraph
EXAMPLE at the end of paragraph I. A.
is am ended by revising the figure “$10
m illion” to read “$28 m illion” .
Supplement I to Part 203
[Amended]
4. In Supplem ent I to Part 203, under
Section 203.3—Exempt Institutions,
u nd er 3(a) Exem ption based on location,
asset size, or num ber o f hom e-purchase
loans, the second sentence of paragraph
1., General is am ended by revising the
figure “$10 m illion” to read “$28
m illion” .
By order of the Board of Governors of the
Federal Reserve System, January 16,1997.
William W. Wiles,
Secretary of the Board.
[FR Doc. 97-1670 Filed 1-23-97; 8:45 am]
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