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FED E R A L R E S E R V E BANK O F N E W YORK f Circular No. 6 5 1 5 ~l L April 2, 1970 J Regulation Z— Amendment and Supplement III To A ll S ta te M em ber Banlcs, and Others Concerned, in the Second F ederal Reserve D is tr ic t: Following is the text of a statement issued March 12 by the Board of Governors of the Federal Reserve System: The B oard of Governors of the F ederal Reserve System announced today it has granted Maine the first S tate exemption under the F ederal T ruth in Lending Act, effective A pril 1. Maine law, which is substantially sim ilar to the F ederal statute, will apply to all classes of credit transactions w ithin th a t State, except those in which a F ederally chartered institution—such as a F ed eral credit union, F ederal savings and loan association, or national bank—is a creditor. Section 123 of the T ru th in Lending A ct provides th a t the B oard shall exempt from the dis closure and recission requirem ents of the Act any class of transactions w ithin a S tate if the State law provides requirem ents substantially sim ilar to those imposed by the F ederal law, and there is adequate provision for enforcement. L ast J u ly 2, the B oard issued as Supplem ent I I to its T ru th in Lending R egulation Z the rules and procedures to be followed by States wishing to regulate credit transactions under th eir own laws. Maine was the first State to file an application w ith the Board. P ending applications have been received from Massachusetts, Connecticut, V irginia, Oklahoma and Utah. The B oard today also am ended R egulation Z to preserve the ability of consumers to file civil actions in either F ederal or S tate courts a fte r exemptions from the F ederal statu te are granted by the Board. U nder the amendment, crim inal and adm inistrative responsibility w ith respect to exempted transactions will be tu rn ed over to a S tate b u t the consumer will retain his ability to seek redress for disclosure violations in either F ederal or S tate court, and to avail himself of F ed eral or State rules of court procedure. The F ederal statute provides these civil penalties for violations: twice the am ount of the finance charge (but in no case less than $100 or more than $1,000),.court costs and reasonable a tto rn e y ’s fees. Enclosed are copies of the amendment referred to in the above statement and Supplement III to Regulation Z, which lists exempted States. Additional copies of this circular and its enclosures will be furnished upon request. A lfred H a yes, President. Board of Governors of the Federal Reserve System TR U TH IN LENDING SUPPLEMENT III TO REGULATION Z (SECTION 226.12—SUPPLEMENT) (a) Exem ptions and lim itations. The provi sions of this supplement are issued by the Board of Governors of the Federal Reserve System pur suant to sections 105 and 123 of the Truth in Lending Act (Title I of the Consumer Credit Protection Act, Public Law 90-321; 82 Stat. 146 et. seq.). The purpose of this supplement is to set forth the exemptions granted by the Board to particular classes of credit transactions within any State which has applied for exemptions pursuant to the provisions of Supplement II to Regula tion Z. It also sets forth the conditions necessary for the retention of such exemptions. Pursuant to the criteria set forth in paragraph (c) of Supple ment II to Regulation Z, the Board has deter mined that the particular classes of credit trans actions within the States specified in the following paragraphs of this supplement are subject to requirements substantially similar to those pro vided in Chapter 2 of the Truth in Lending Act and that there is adequate provision for enforce ment of such requirements. The exemptions granted herein shall continue in effect provided that: tations thereof which may be issued from time to time by the Board; (2) Administrative and other provisions for enforcement of such State law, including regula tions and interpretations thereof, applicable to the exempt classes of credit transactions continue to be adequate; and (3) Cooperation and appropriate liaison with the Board as specified in paragraph (e) of Sup plement II are maintained to assure that the pur poses of the Truth in Lending Act are carried out uniformly. (b) Maine. Except as provided in § 226.12(c), the following classes of credit transactions within the State of Maine except for those transactions in which a federally chartered institution is a creditor are hereby granted an exemption from the requirements of Chapter 2 of the Truth in Lending Act effective April 1, 1970: (1) Transactions under open end consumer credit plans which are subject to the requirements of $ 127 of the Truth in Lending Act; (2) Consumer credit sales transactions not under (1) Such State law, including regulations and open end credit plans which are subject to the interpretations thereof, upon which the Board’s requirements of § 128 of the A ct; determination under paragraph (c) of Supple (3) Consumer loan and other nonsale credit ment II is based, is amended or revised as may be transactions not under open end credit plans necessary in order to preserve substantial similar which are subject to the requirements of $ 129 of ity with the Truth in Lending Act and Regula the Act. tion Z as they may be amended, and with interpre P R IN T E D IN N EW YORK Board of Governors of the Federal Reserve System T R U TH IN LEND ING AM ENDM ENT TO R EG U LA T IO N Z E xem ption of C ertain State R egulated T ransactions; R etention of Access to F ederal Civil Remedies Effective March 12, 1970, § 226.12 is amended to read as follows: SECTION 226.12—EXEMPTION OF CERTAIN STATE REGULATED TRANSACTIONS (a) Exem ption for State regulated transac tions. In accordance with the provisions of Sup plement II to Regulation Z (§ 226.12—Supple ment), any State may make application to the Board for exemption of any class of transactions within that State from the requirements of Chap ter 2 of the Act and the corresponding provisions of this part: Provided, That (1) Under the law of that State, that class of transactions is subject to requirements substan tially similar to those imposed under Chapter 2 of the Act and the corresponding provisions of of this part; and (2) There is adequate provision for enforce ment. (b) Procedures and criteria. The procedures and criteria under which any State may apply for the determination provided for in paragraph (a) of this section are set forth in Supplement II to Regulation Z (§ 226.12—Supplement). (c) Civil liability. In order to assure that the concurrent jurisdiction of Federal and State courts created in section 130(e) of the Act shall continue to have substantive provisions to which such juris diction shall apply, and generally to aid in imple menting the Act with respect to any class of trans actions exempted pursuant to paragraph (a) of this section, the Board pursuant to sections 105 and 123 hereby prescribes that: (1) No such exemption shall be deemed to ex tend to the civil liability provisions of sections 130 and 131; and (2) After an exemption has been granted, the disclosure requirements of the applicable State law shall constitute the disclosure requirements of this Act, except to the extent that such State law imposes disclosure requirements not imposed by this Act. Information required under such State law with the exception of those provisions which impose disclosure requirements not imposed by this Act, shall, accordingly, constitute the “infor mation required under this Chapter” (Chapter 2 of the Act) for the purpose of section 130(a). (d) Exem ptions granted. Exemptions granted by the Board to particular classes of credit trans actions within specified States are set forth in Supplement III to Regulation Z. P R IN T E D I N N E W YORK