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FEDERAL RESERVE BANK OF NEW YORK [ Circular No. 10656 ~| September 9, 1993 J ACTIONS RELATING TO DISASTER RELIEF FOR MIDWEST FLOOD VICTIMS — Exemptions from Real Estate Appraisal Requirements — Temporary Exceptions to Regulation Z To All Depository Institutions in the Second Federal Reserve District, and Others Concerned: Following is the text of a statement issued by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, the National Credit Union Administration, and the Office of Thrift Supervision announcing joint actions to exempt transactions involving properties affected by the flooding in the Midwest from real estate appraisal requirements: Banks, savings institutions, credit unions and other federally regulated entities making loans in designated flood areas will be able to make them faster to finance the repair and rebuilding effort under an action taken by the five federal financial institutions regulatory agencies. The order exempts lending institutions in the flood areas from current federal requirements that institutions obtain appraisals on real estate pledged as collateral for loans. The agencies said the exemption is necessary because the disruption of real estate markets in the flood areas interferes with the ability of institutions to obtain appraisals that meet the requirements of federal law and regulations. The order was published jointly in the August 11, 1993, edition of the Federal Register by the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, the National Credit Union Administration (NCUA) and the Office of Thrift Supervision (OTS). Real estate appraisals are required in normal times for loans over certain dollar amounts by Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). However, under the Depository Institutions Disaster Relief Act of 1992 (DIDRA), the federal regulatory agencies are authorized to waive those requirements when disasters occur. The exemption extends for three years from the date the President declared a major disaster area, and is in effect for institutions making loans secured by affected real property in disaster designated a re a s .. . . The agencies determined that the exceptions would not adversely affect the lending institution’s safety and soundness so long as their records indicate either that the property was directly affected by the major disaster or that the transaction would facilitate recovery from the disaster, and there is a binding commitment to fund the loan within the three-year period. In addition, the Board of Governors of the Federal Reserve System has amended its Regula tion Z, “Truth-in-Lending,” in order to provide temporary exceptions to certain Regulation Z provisions, relating to waiver of rescission rights, so as to provide disaster relief for flood victims in the Midwest. Printed on the following pages is the text of the statement and order issued by the five federal regulatory agencies exempting from real estate appraisal requirements certain transactions involving properties affected by the flooding, and the text of the Board’s amendment to Regulation Z providing temporary exceptions to certain of its provisions; both items have been reprinted from the Federal Register. Questions concerning the real estate appraisal exemptions may be directed to Barbara A. Klein, Manager, Domestic Banking Department (Tel. No. 212-720-8324); questions regarding Regulation Z may be directed to Elizabeth Irwin-McCaughey, Manager, Compliance Examinations Department (Tel. No. 212-720-6820). W illiam J. M cD o n o u g h , President. 42640 Federal Register / Vol. 58, No. 153 / Wednesday, August 11, 1993 / Rules and Regulations DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12CFR Part 34 FEDERAL RESERVE SYSTEM 12 CFR Part 225 FEDERAL DEPOSIT INSURANCE CORPORATION 12 CFR Part 323 DEPARTMENT OF THE TREASURY Office of Thrift Supervision 12 CFR Part 564 NATIONAL CREDIT UNION ADMINISTRATION 12 CFR Part 722 Real Estate Appraisal Exceptions In Major Disaster Areas AGENCIES: Office of the Comptroller of the Currency, Treasury; Board of Governors of the Federal Reserve System; Federal Deposit Insurance Corporation; Office of Thrift Supervision, Treasury; and National Credit Union Administration. ACTION: Statement and order; temporary exceptions. SUMMARY: Section 2 of the Depository Institutions Disaster Relief Act of 1992 (DIDRA) authorizes the Federal financial institutions regulatory agencies to make exceptions to statutory and regulatory requirements relating to appraisals for certain transactions. The exceptions are available for transactions that involve real property in major disaster areas when the exceptions would facilitate recovery from the disaster and would be consistent with safety and soundness. Expiration dates for certain transactions are set out in the SUPPLEMENTARY INFORMATION section. DATES: This order is effective on August 11,1993, and expires for specific areas on the dates indicated in the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Office of the Comptroller of the Currency (OCC) Thomas E. Watson, National Bank Examiner, (202) 874-5350, or William C. Kerr, National Bank Examiner, (202) 874-5170, Office of the Chief National Bank Examiner; or Horace G. Sneed, Senior Attorney, (202) 874-4460, Bank Operations and Assets Division, 250 E Street, SW., Washington, DC 20219. Board of Governors of the Federal Reserve System (Board) Roger T. Cole, Deputy Associate Director, (202) 452-2618, Rhoger H. Pugh, Assistant Director (202) 7285883, Stanley B. Rediger, Supervisory Financial Analyst, (202) 452-2629, Virginia M. Gibbs, Supervisory Financial Analyst, (202) 452-2521, Division of Banking Supervision and Regulation; or Christopher J. Bellini, Attorney, (202) 452-3269, Legal Division. For the hearing impaired only, contact Dorothea Thompson, Telecommunications Device for the Deaf (TDD), (202) 452-3544, Board of Governors of the Federal Reserve System, 20th and Constitution Avenue, NW., Washington, DC 20551. Federal Deposit Insurance Corporation (FDIC) Robert F. Miailovich, Associate Director, (202) 898-6918, James D. Leitner, Examination Specialist, (202) 898-6790, Division of Supervision; or Walter P. Doyle, Counsel, (202) 8983682, Legal Division, 550 17th Street NW., Washington, DC 20429. Office of Thrift Supervision (OTS) Robert Fishman, Program Manager, Credit Risk, (202) 906-5672; Deirdre Kvartunas, Program Analyst, (202) 9067933; Diana Garmus, Deputy Assistant Director, Corporate Activities, (202) 906-5683; Ellen J. Sazzman, Attorney, Regulations and Legislation Division, Chief Counsel’s Office, (202) 907-7133; 1700 G Street, NW., Washington, DC 20552. National Credit Union Administration (NCUA) Michael J. McKenna, Office of General Counsel, (202) 682-9630, or Alonzo Swann, Office of Examination and Insurance, (202) 682-9640; 1776 G Street NW., Washington, DC 20456. SUPPLEMENTARY INFORMATION: Statement Section 2 of DIDRA, 12 U.S.C. 3352, authorizes the agencies to make exceptions to statutory and regulatory appraisal requirements for transactions with respect to real property located in areas that the President has determined, pursuant to section 5170 of title 42, that a major disaster exists, provided that the exception would facilitate recovery from the major disaster and is consistent with safety and soundness.1 Such exceptions 1 The agencies must make the exception no later than 30 months alter the date on which the Federal Register / Vol. 58, No. 153 / Wednesday, August 11, 1993 / Rules and Regulations 4 2 6 4 1 expire not later than three years after the date of the President's determination that a major disaster exists in the area. During the summer of 1993, the President determined that major disasters existed in several Midwestern states because of the extensive flooding that had occurred and is continuing in those areas in April through July of 1993. The agencies believe that granting relief from the appraisal requirements for certain real estate transactions in all such areas affected by this summer’s flooding is consistent with the provisions of the DIDRA. The agencies have determined that the disruption of real estate markets in all such affected areas interferes with the ability of depository institutions to obtain appraisals that comply with statutory and regulatory requirements and, therefore, would impede institutions in making loans and engaging in other transactions that would aid in the reconstruction and rehabilitation of the affected areas. Accordingly, the agencies have determined that recovery from the major disasters would be facilitated by excepting transactions involving real estate located in those areas directly affected by this summer’s flooding from the real estate appraisal requirements of title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and regulations promulgated thereto. This has the effect of excluding transactions to which the exceptions apply from the definition of “federally related transactions.’’ The agencies have also determined safety and soundness would not be adversely affected by such exceptions so long as the depository institution’s records relating to any such excepted transaction clearly indicate either that the property involved was directly affected by the major disaster or that the transaction would facilitate recovery from the disaster and there is a binding commitment to fund the transaction within three years after the date the major disaster was declared. In addition, the transaction must continue to be subject to review by management and by the agencies in the course of examination of the institution under normal supervisory standards relating to safety and soundness, though the transactions need not comply with the specific requirements of title XI of FIRREA and the agencies’ appraisal regulations. President determines that a major disaster exists in the area. Expiration Dates Any exceptions provided under the order shall expire not later than 3 years after the date on which the President determines, pursuant to section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5170, that a major disaster exists in the area. Accordingly, exceptions for the major disasters declared due to the flooding in Minnesota and Wisconsin counties expire on June 11,1996 and July 2,1996, respectively; in Missouri, Iowa, and Illinois counties on July 9, 1996; and in Nebraska and South Dakota counties on July 19,1996. Exceptions for any other areas that have been declared major disasters by the President expire 3 years after the date of such declaration. * Order Rock, Blue Earth, Nicollet, Renville, Sibley, Watonwan, Yellow Medicine, Carver, Chippewa, Faribault, Jackson, Le Sueur, Martin, McLeod, Scott, Goodhue, Washington. Dakota, Houston, Ramsey, Big Stone, Clay, Stevens, Swift, Traverse. Wsiconsin: Calumet, Clark, Columbia, Dunn, Eau Claire, Fond du Lac, Green Lake, Jackson, Marquette, Outagamie, Portage, Saulk, Trempealeau, Waupaca, Waushara, Winnebago, Wood, Adams, Buffalo, Chippewa, Crawford, Dane, Green, Grant, Iowa, Juneau, LaCrosse, Lafayette, Lincoln, Marathon, Pepin, Pierce, Price, Rock, Rusk, St. Croix, Vernon. Missouri: Lewis, Lincoln, Marion, Pike, St. Charles, Andrew, Atchison, Barry, Bates, Boone, Buchanan, Callaway, Camden, Carroll, Cape Girardeau, Chariton, Clark, Clay, Cole, Cooper, Daviess, Franklin, Gasconade, Gentry, Harrison, Holt, Howard, Jackson, Jefferson, Lafayette, McDonald, Miller, Moniteau, Montgomery, Newton, In accordance with section 2 of Nodaway, Osage, Perry, Platte, Pulaski, Ralls, DIDRA, relief is hereby granted from the Ray, Saline, Shelby, St. Louis, St. Louis City, provisions of title XI of FIRREA and the St. Genevieve, Stone, Warren, Worth. agencies’ appraisal regulations for any Iowa: Clayton, Clinton, Des Moines, real estate-related financial transaction Dickinson, Humboldt, Jackson, Louisa, that requires an appraiser under those Muscaine, Scott, Wapello, Polk, Lyon, provisions, provided that: Osceola, Emmet, Kossuth, Winnebago, (1) The transaction involves real Worth, Mitchell, Howard, Winneshiek, estate located in an area that the Allamakee, Fayette, Chickasaw, Floyd, Cerro President has determined, pursuant to Gordo, Hancock, Palo Alto, Clay, O'Brien, section 401 of the Robert T. Stafford Sioux, Plymouth, Cherokee, Buena Vista, Pocahontas, Wright, Franklin, Butler, Bremer, Disaster Relief and Emergency Dubuque, Delaware, Buchanan, Black Hawk, Assistance Act, 42 U.S.C. 5170, is a Grundy, Hardin, Hamilton, Webster, major disaster area as a result of the Calhoun, Sac, Ida, Woodbury, Monora, extensive flooding in the Midwest and Crawford, Carroll, Greene, Boone, Story, has been designated eligible for Federal Marshall, Tama, Benton, Linn, Jones, Cedar, assistance by the Federal Emergency Iowa, Poweshiek, Jasper, Dallas, Guthrie, Management Agency (FEMA);* (2) (a) The real property involved wasAudubon, Shelby, Harrison, Pottawattamie, Cass, Adair, Madison, Warren, Marion, directly affected by the major disaster; Mahaska, Keokuk, Washington, Henry, or Jefferson, Monroe, Lacas, Clarke, Union, (b) The real property involved was not Adams, Montgomery, Mills, Fremont. Page, directly affected by the major disaster Taylor, Ringgold, Decatur, Wayne, but the institution’s records explain Appanoosa, Davis, Van Buren, Lee. how the transaction would facilitate Illin o is : Adams, Calhoun, Carroll, Hancock, recovery from the disaster; Henderson, Henry, Jersey, Jo Daviess, Mercer, (3) There is a binding commitment to Pike, Rock Island, Whiteside, Madison, fund a transaction that is made within Monroe, St. Clair, Boone, Lake, McHenry, three years after the date the major Stephenson, Winnebago, Alexander, Jackson, disaster was declared by the President; Randolph, Union. and Nebraska: Buffalo, Cass, Lancaster, Sarpy, (4) The institution retains in its files, Seward, Washington, Adams, Hall, Kearney, for examiner review, appropriate Phelps. documentation supporting the South Dakota: Bon Homme, Brookings, property’s valuation. Clay, Davison, Hanson, Hutchinson, Appendix Kinsbury, Lake, Lincoln, McCook, Miner, Minnehaha, Moody, Sanborn, Turner, Union, Minnesota: Brown, Cottonwood, Lincoln, Lyon, Murray, Nobles, Pipestone, Redwood, Yankton. * These areas include counties in Minnesota, Wisconsin, Missouri, Iowa, Illinois, Nebraska, and South Dakota which have been declared major disaster areas and are listed in the attached Appendix. The exception would also include any other such areas that the President declares are major disaster areas as a result of this summer’s flooding in the Midwest. Dated: July 2 7 ,1993. Office of the Comptroller of the Currency, Department of the Treasury. Eugene A. Ludwig, Com ptroller o f the Currency. D ated: July 3 0 , 1 9 9 3 . 42942 Federal Register / Vol. 58, No. 153 / Wednesday, August 11, 1993 / Rules and Regulations Board o f Governor* of the Federal Reserve System. W illiam W . W iles, Secretary o f th e Board. July 2 6,1903. Federal Deposit Insurance Corporation. Robert E . Feldm an, D eputy E xecutive Secretary. Dated: July 29.1993. Office of Thrift Supervision. Department of the Treasury. Jonathan L. Fiechter, A cting Director. Dated: August 2 ,1993. National Credit Union Administration. Becky Baker, Secretary o f th e Board. [FR Doc. 9 3 -1 9 2 2 7 Filed 8 -1 0 -9 3 ; 8:45 am) M U W Q COOS SX10-01-M 40582 Federal Register / Vol. 58, No. 144 / Thursday, July 29, 1993 / Rules and Regulations FEDERAL RESERVE SYSTEM 12CFR Part 226 [Regulation Z; Docket No. R -0805] Truth in Lending AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final Rule; temporary exceptions. The Board is publishing a final rule amending Regulation Z (which implements the Truth in Lending Act). The amendment provides a temporary exception to Regulation Z provisions that prohibit the use of a preprinted form by a creditor to obtain a consumer’s waiver of the right to rescind certain home-secured loans when loan proceeds are needed immediately to meet a consumer’s bona fide personal financial emergency. Generally, Regulation Z requires a mandatory three-day waiting period on rescindable transactions before funds can be disbursed. In addition, a consumer’s need to obtain funds immediately shall be regarded as a bona fide personal financial emergency for purposes of Regulation Z for transactions secured by consumers’ principal dwellings located in areas of the Midwest recently declared to be major disaster areas because of extensive flooding. The exception expires one year from the date the area was declared a major disaster EFFECTIVE DATE: July 29, 1993. SUMMARY: Regulation Z, 12 CFR part 226, with some exceptions, a consumer has the right to rescind a credit obligation secured by the consumer’s principal dwelling for three days after becoming obligated, due to the risk of loss of the consumer’s home in the event of default. There is a mandatory waiting period of three business days before funds can be disbursed in order to give consumers an opportunity to reflect on the loan terms and to elect to cancel the transaction (12 CFR 226.15 and 226.23). A consumer may modify or waive this right of rescission to meet a bona fide personal financial emergency. The consumer must provide the creditor with a written, signed and dated waiver statement that describes the emergency. Under Regulation Z, 12 CFR 226.15(e) and 226.23(e), the waiver statement may not be executed on a preprinted form. In November 1992, the Board adopted an exception to Regulation Z for transactions secured by homes located in areas declared major disaster areas as a result of Hurricanes Andrew and Iniki and the April \992 Los Angeles civil unrest. (57 FR 53,545 (Nov. 12,1992)). The Board’s exception permitted a temporary waiver of the provisions in Regulation Z that prohibit an institution’s use of a preprinted form to obtain a consumer’s waiver of the right to rescind certain home-secured loans when loan funds were needed immediately to meet a consumer’s bona fide personal financial emergency. In addition, a consumer’s need to obtain funds immediately was regarded as a bona fide personal financial emergency, for purposes of Regulation Z, where the home securing the loan was located in the disaster area. (2) Relief for Flood Affected Communities From April through July of 1993, extensive flooding has occurred in several Midwestern States and, as a result, the President has determined that extensive major disaster areas exist in those states. To aid consumers in FOR FURTHER INFORMATION CONTACT: obtaining credit speedily to begin Adrienne Hurt, Managing Counsel, or repairs in flood damaged areas and to Jane Jensen Gell, Staff Attorney, ease the paperwork burden on creditors Division of Consumer and Community extending credit in these areas, the Affairs, at (202) 452-2412 or (202) 452Board has determined to provide a 3667; for the hearing impaired only, temporary exception to the restrictions contact Dorothea Thompson, in §§ 226.15(e) and 226.23(e) of Telecommunications Device for the Deaf Regulation Z. This exception will expire (TDD), at (202) 452-3544, Board of one year from the date the President Governors of the Federal Reserve declared that an area was a major System, Washington, DC 20551. disaster. The Board is amending Regulation Z SUPPLEMENTARY INFORMATION: to permit a temporary exception to its (1) Background. provisions that prohibit the use of a Under the Truth in Lending Act preprinted form by a creditor to obtain (TILA), 15 USC 1601—1666j, and a consumer’s waiver of the right to rescind certain home-secured loans. In addition, a consumer’s need to obtain funds immediately shall be regarded as a bona fide personal financial emergency, where the home securing the loan is located in the disaster area. The exception is limited to loans secured by homes located in areas that the President has declared, pursuant to section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 USC 5170, are major disaster areas as a result of the extensive flooding in 1993 in the Midwest. The exception expires one year from the date an area was declared a major disaster. The Board notes, however, that the consumer must still sign and date the waiver statement. The following counties in Minnesota, Wisconsin, Missouri, Iowa, Illinois, Nebraska, and South Dakota have been declared major disaster areas during June and July 1993. Minnesota: Brown, Cottonwood, Lincoln, Lyon, Murray, Nobles, Pipestone, Redwood, Rock, Blue Earth, Nicollet, Renville, Sibley, Watonwan, Yellow Medicine, Carver, Chippewa, Faribault, Jackson, Le Sueur, Martin, McLeod, Scott, Goodhue, Washington, Dakota, Houston, Ramsey, Big Stone, Clay, Stevens, Swift, Traverse. W/sconsin: Calumet, Clark, Columbia, Dunn, Eau Claire, Fond du Lac, Green Lake, Jackson, Marquette, Outagamie, Portage, Saulk, Trempealeau, Waupaca, Waushara, Winnebago, Wood, Adams, Buffalo, Chippewa, Crawford, Dane, Green, Grant, Iowa, Juneau, LaCrosse, Lafayette, Lincoln, Marathon, Pepin, Pierce, Price, Rock, Rusk, St. Croix, Vernon. M issouri: Lewis, Lincoln, Marion, Pike, St. Charles, Andrew, Atchison, Barry, Bates, Boone, Buchanan, Callaway, Camden, Carroll, Cape Giarardeau, Chariton, Clark, Clay, Cole, Cooper, Daviess, Franklin, Gasconade, Gentry, Harrison, Holt, Howard, Jackson, Jefferson, Lafayette, McDonald, Miller, Moniteau, Montgomery, Newton, Nodaway, Osage, Perry, Platte, Pulaski, Ralls, Ray, Saline, Shelby, St. Louis, St. Louis City, St. Genevieve, Stone, Warren, Worth. Iowa: Clayton, Clinton, Des Moines, Dickinson, Humboldt, Jackson, Johnson, Louisa, Muscaine. Scott, Wapello, Polk, Lyon, Osceola, Emmet, Kossuth, Winnebago, Worth, Mitchell, Howard, Winneshiek, Allamakee, Fayette, Chickasaw, Floyd, Cerro Gordo, Hancock, Palo Alto, Clay, O’Brien, Sioux, Plymouth, Cherokee, Buena Vista, Pocahontas, Wright, Franklin, Butler, Bremer, Dubuque, Delaware, Buchanan, Black Hawk, Grundy, Hardin, Hamilton, Webster, Calhoun, Sac, Ida, Woodbury, Monora, Crawford, Carroll, Greene, Boone, Story, Marshall, Tama, Benton, Linn, Jones, Cedar, Iowa, Poweshiek, Jasper, Dallas, Guthrie, Audubon, Shelby, Harrison, Pottawattamie, Cass, Adair, Madison, Warren, Marion, Mahaska, Keokuk, Washington, Henry, Jefferson, Monroe, Lacas, Clarke, Union, Adams, Montgomery, Mills, Fremont, Page, Taylor, Ringgold, Decatur, Wayne, Appanoosa, Davis, Van Buren. Lee. Federal Register / Vol. 58, No. 144 / Thursday, July 29, 1993 / Rules and Regulations Illinois: A d am s, C alh ou n , C a rroll, H an co ck , H en derson, H en ry, Jersey, J o D aviess, M ercer, Pike, R ock Island, W h ite sid e , M ad iso n , M on roe, St. C lair, B o o n e, L ake, M cH en ry, S tep h en so n , W in n eb ago, A le x a n d e r, Jack so n , R an d olp h , U nion. Nebraska: B uffalo, C ass, L an ca ste r, S arp y , S ew ard , W ash in gto n , Adam s* H all, K earney, Phelps. South Dakota: B on H o m m e, B rookings, C lay, D avison, H an so n , H u tch iso n , K insbury, Lake, L in c o ln , M cC ook, M in er, M in n eh ah a, M oody, San born , T u rn e r, U n io n , Y an k ton . Public Comment and Effective Date The A d m inistrative P roced u res A ct (A PA ), 5 U .S.C . 5 5 3 , grants a sp ecific exem p tion from its n o tice and public com m ent requirem ents for rulem akings when these req u irem en ts are co n trary to the public interest (5 U .S.C . 553(b )(3)(B )). In the p resent case, the final rule am ending Regulation Z provides a tem p orary excep tio n and rem oves a restriction th at oth erw ise may im pair the availab ility of loan funds to con su m ers w ho en co u n ter a bona fide personal financial em ergen cy b ecau se their h om es are located in an area devastated by flooding. T h e Board finds that it is in the public in terest to p rovide this relief im m ediately and w ithout ad van ce n otice and pub lic com m en t. As exp lain ed above, the am en d m en t to Regulation Z w ill red u ce the paperw ork burden on cred ito rs exten d in g cred it in the d isaster areas and aid in m aking cred it speed ily available to con su m ers in these areas. C onsu m ers w ould con tin u e to h ave the right to rescin d certain loans u nless they specifically w aive that right. M oreover, the excep tio n is lim ited in sco p e and duration. It w ill p rovide im m ediate assistance to con su m ers and len ders in their ongoing recon stru ction and rehabilitation efforts in th o se a /e a s that have been affected by recen t m ajor disasters recogn ized u n d er the appropriate federal d isaster relief statute. The Board also b elieves that deferring the effective date in regard to tine adoption of the final ru le w ould be con trary to the p ub lic in terest. T h e A PA grants a sp ecific exem p tion from its requirem ents relating to th is item in such in stan ces (12 U .S.C . 5 5 3 (d )(3 )). A ccord in gly , th e am en d m en ts to Regulation Z are effective im m ediately. Regulatory Flexibility Act Analysis Pursuant to section 605(b ) o f the Regulatory F lexib ility A ct (5 U .S.C . 605(b )), the B oard b elieves th at the adoption of this final ru le w ou ld not have a significant ad verse im p act on a substantial n um ber of sm all en tities. The am en d m en t im p oses n o new requirem ents and tem p orarily rem oves a restriction im posed by Regulation Z on en tities subject to the regulation. Paperwork Reduction Act Analysis 40583 exp ire one year from th e d ate an area w as d eclared a m ajor disaster. # * # * * No collectio n of inform ation pursuant to section 3 5 0 4 (h ) of the Paperw ork Reduction A ct (4 4 U .S.C . 3 5 0 1 et seq.) is con tained in these changes. 2. S ection 2 2 6 .1 6 is am en d ed by red esign atin g existin g footnotes 36a and 36b as footnotes 36b and 3 6 c , resp ectively. List of Subjects in 12 CFR Part 226 Subpart C— Closed-End Credit A dvertising; Banks; Banking; C onsum er p rotection ; Credit; Federal Reserve System ; F in an ce; Penalties; Rate lim itations; Tru th in Lending. P ursuant to au thority granted in section 105 of the Truth in Lending A ct (15 U .S.C . 1 6 0 4 as am ended), the Board is am ending 12 C FR part 2 2 6 as follows. T h e Board is publishing only those section s of the regulation that are affected by th e changes. 4. S ection 2 2 6 .2 3 p aragraph (e) is revised to read as follow s: § 226.23 * Right of Rescission. * « * * (e) C o nsu m er's w a iv e r o f rig h t to re scin d . (1) T he co n su m er m ay modify or w aive the right to rescin d if the co n su m er d eterm in es that the extension o f cred it is n eeded to m eet a bona fide p erson al financial em ergen cy. To PART 226—TRUTH IN LENDING m odify or w aive the right, the con su m er shall give the cred ito r a dated w ritten 1. T h e au thority citation for part 2 2 6 statem ent that d escrib es th e em ergen cy, con tin u es to read: sp ecifically m odifies or w aives the right A u th o rity : T ru th in Lend ing A c t, 15 U .S.C . to rescin d , and b ears the signature of all 1 6 0 4 and 1 6 3 7 (c )(5 ); sec. 1 2 0 4 (c), th e con su m ers en titled to rescin d . C om p etitiv e E q u ality B ank ing A ct, 12 U .S.C . Printed form s for th is purpose are 3806. prohibited, e x ce p t as p rovided in paragraph (e)(2) o f this section . Subpart B— Open-End Credit 3. Section 2 2 6 .1 5 paragraph (e) is revised to read as follows: §226.15 * * Right of rescission. * * * (e) C o n su m e r’s w a ive r o f rig h t to rescind. (1) T he con su m er m ay m odify or w aive the right to rescin d if the con su m er determ ines that the exten sio n of cred it is n eeded to m eet a bona fide personal financial em ergency. To m odify or w aive the right, the con su m er shall give the cred ito r a dated w ritten statem ent that d escribes the em ergen cy, specifically m odifies or w aives th e right to rescin d , and bears the signature o f all the con su m ers.en titled to rescin d . Printed forms for this purpose are prohibited, excep t as providod in paragraph (e)(2) of this section . (2) T he need of the co n su m er to obtain funds im m ediately shall be regarded as a bona fide personal financial em ergency provided that the dw elling secu rin g the exten sio n of cred it is located in an area d eclared during June through Septem ber 1 9 9 3 , pursuant to 42 U .S.C . 5 1 7 0 , to be a m ajor d isaster area b ecau se of severe storm s and flooding in the M id w est.3** (2) T h e need of th e co n su m er to obtain funds im m ediately shall be regarded as a bona fide personal financial em ergen cy p rovided that the dw elling secu rin g the exten sio n of cred it is located in an area d eclared during June through Septem ber 1 9 9 3 , p ursuant to 4 2 U .S.C . 5 1 7 0 , to be a m ajor d isaster area b ecau se of severe « storm s and flooding in the M id w est.48* In this in stan ce, cred ito rs m ay use printed form s for the co n su m er to w aive the right to rescin d . T h is exem p tion to paragraph (e)(1) of this section shall e x p ire one y ear from th e date an area w as d eclared a m ajor disaster. * * * * * B y o rd e r o f th e B oard o f G overn ors of the Fed eral R eserv e S y stem , Ju ly 2 3 , 1 9 9 3 . W illia m W . W iles, Secretary o f the Board . (FR D oc. 9 3 - 1 8 0 7 2 F ile d 7 - 2 8 - 9 3 ; 6 :4 5 am ) BU.UNG COOE In this instance, creditors may use printed forms for the consumer to waive the right to rescind. This exemption to paragraph (e)(1) of this section shall A list of the affected areas will be maintained by the Board. * * • A list of the affected areas will be maintained by the Board.
@FedFRASER