Full text of Federal Reserve Bank of New York Circulars : 7923. Regulation Z

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FED ER AL RESERVE BANK
O F N E W YORK
r Circular No. 7923*1

L

July

26,

1976

J

REGULATION Z
Correction of Amendment Authorizing Staff Interpretations
Notice of Public Hearing on Proposed Amendments to Implement the Consumer Leasing Act of 1976
To All Member Banks, and, Others Concerned,
in the Second Federal Reserve District:

With our Circular No. 7915, dated July 13, 1976, you received a copy of an amendment,
effective July 30, 1976, to Regulation Z, “Truth in Lending,” of the Board of Governors of the
Federal Reserve System.
The Board of Governors has advised us of a correction of subparagraphs (d)(1) and (3)
the amendment, to add the words “Issuance of interpretations.” to subparagraph (d) of
Section 226.1 and delete the words “Designation of official to issue interpretations.” from subparagraph (3) of that section.
of

Enclosed is a copy of the corrected amendment; additional copies will be furnished upon
request.
*

*

*

Our Ciicular No. 7919, dated July 16, 1976, advised you of several proposed amendments to
the Board’s Regulation Z to implement the Consumer Leasing Act of 1976. With regard to these
amendments, the Board of Governors has scheduled a public hearing on August 3. Printed below
is the text of the Board’s Order in this matter:
On July 9 1976, the Board of Governors published for comment in the Federal Reqister (41 FR 283131
proposed amendments to Regulation Z to implement the Consumer Leasing Act of 1976 (Pub L 94-2401
T ° - 1 111 ltS consideration of tbis ProPosal. the Board has scheduled an informal hearing on issues presented
by the proposed amendments on Tuesday, August 3, 1976.
8
presented
The purpose of the hearing is to solicit comment on the proposed amendments generally. In addition
tS2?0°l1^ %e?1Ca-iy M1Uf-r comnients on the following issues of interest: (1) disclosure requirements
(§226.la), (2) residual liability disc osures (§226.15(b) (15)), (3) any unique concerns of multiple item
lessors, and (4) the integration of the proposal into Regulation Z.
1
The scheduled hearing will be held before available members of the Board on the Terrace level of the
Mart.,, Building at 20th and C Streets. N.W.. Washington. D.C., on August 3. 1976 beginn , g at 0 a m
Lie proceeding will consist of presentations of statements in oral and written form.
S

... AjA' Persons desiring to give testimony, present evidence, or otherwise participate in the hearing should
hie with the Secretary of the Board of Governors of the Federal Reserve System, Washington, D C 20SS1
to be received by July 28, 1976, a written request containing the names and affiliation of witnesses who pro­
pose to appear, the amount of time desired for testimony, and a summary of the matters concerning which
petitionei wishes to give testimony or submit evidence. If possible, prepared statements in writing should be
presented at the time of the hearing. All such communications will be made available for inspection and
copying m Room 1118 of the Board Building.
inspection and
. AHA lrtil S w,1! be glvcn uf?tl1 AuSust. 16> 19~6' to submit such additional material related to the issues
raised at t le hearing, or any other issues in the proposed regulations, as they desire. Interested persons
need not paiticipate m the oral presentation to have their views considered but may submit their views in
writing to be received by the Secretary no later than August 16. 1976. Written comments, as they are reedved
will be made available for inspection and copying in Room 1118 in the Board Building.
'
’
^

Any questions regarding these matters may be directed to our Bank Regulations Department.




P aul A. V olcker,

President.

Board of Governors of the Federal Reserve System
TRUTH IN LENDING

CORRECTED AM ENDM ENT TO REGULATION Z
Effective July 30, 1976, paragraph (c) of
§226.1 is revised, and paragraph (d) of that
section is added, to read as follows:
SECTION 226.1—AUTHORITY, SCOPE,
PURPOSE, ETC.
*
*
*
(c)
Penalties and liabilities. Section 112 of
the Act provides criminal liability for willful
and knowing failure to comply with any re­
quirement imposed under the Act and this Part.
Section 134 provides for criminal liability for
certain fraudulent activities related to credit
cards. Section 130 provides for civil liability
in individual or class actions for any creditor
who fails to comply with any requirement
imposed under Chapter 2 or Chapter 4 of the
Act and the corresponding provisions of this
Part. Section 130 also provides creditors a
defense against civil and criminal liability for
any act done or omitted in good faith in con­
formity with the provisions of this Part or any
interpretation thereof by the Board, or with
any interpretations or approvals issued by a
duly authorized official or employee of the Fed­
eral Reserve System, notwithstanding that after
such act or omission has occurred, such rule,
regulation or interpretation is amended, res­
cinded or otherwise determined to be invalid
for any reason. Section 130 further provides
that a multiple failure to disclose in connection
with a single account shall permit but a single
recovery. Section 115 provides for civil liability
for an assignee of an original creditor where
the original creditor has violated the disclosure
requirements and such violation is apparent on
the face of the instrument assigned, unless the
assignment is involuntary. Pursuant to §108
of the Act, violations of the Act or this Part
constitute violations of other Federal laws
which may provide further penalties.
(cl) Issuance of interpretations. (1) Any
request for formal Board interpretation or offi­

cial staff interpretation of Regulation Z must
be addressed to the Director of the Office of
Saver and Consumer Affairs, Board of Gov­
ernors of the Federal Reserve System, Wash­
ington, D.C. 20551. Each request for interpre­
tation must contain a complete statement, signed
by the person making the request or a duly
authorized agent, of all relevant facts of the
transaction or credit arrangement relating to
the request. True copies of all pertinent docu­
ments must be submitted with the request. The
relevance of such documents must, however,
be set forth in the request and the documents
must not merely be incorporated by reference.
The request must contain an analysis of the
bearing of the facts on the issues and it must
specify the pertinent provisions of the statute
and regulation. Within fifteen business days of
receipt of the request, a substantive response
will be sent to the person making the request
or an acknowledgement will be sent which sets
a reasonable time within which a substantive
response will be given.
(2)
Any request for reconsideration of
an official staff interpretation of Regulation Z
must be addressed to the Secretary, Board of
Governors of the Federal Reserve System,
Washington, D.C. 20551, within thirty days
of the publication of such interpretation in
the Federal Register. Each request for recon­
sideration must contain a statement setting
forth in full the reasons why the person making
the request believes reconsideration would be
appropriate, and must specify and discuss the
applicability of the relevant facts, statute and
regulations. Within fifteen business days of re­
ceipt of such request for reconsideration, a
response granting or denying the request will
lie sent to the person making the request, or an
acknowledgement will be sent which sets a
reasonable time within which such response
will be given.
(3) Pursuant to §130(f) of the Act, the

F o r t h is R e g u la ti o n t o b e c o m p le te , r e t a i n :
1)

R e g u la ti o n Z p a m p h le t, e f f e c tiv e O c to b e r 28, 1975.

2)

T h i s s lip s h e e t.

PRINTED IN NEW YORK
f E n c . C l* . N o - 79231




(OVER)

B oard has designated the D irector and other
officials of the Office of Saver and Consum er
A ffairs as officials “duly au thorized” to issue,
a t th eir discretion, official staff in terpretations
of this P art. T his designation shall not be in­
terp reted to include auth o rity to approve p ar­
ticular cred ito rs’ form s in any m anner.
(4 )
T h e type of interp retatio n issued will be
determ ined by the B oard and the designated
officials by the following c rite ria :
(i)
Official B oard interpretations will be is­
sued upon those requests which involve poten­




tially controversial issues of general applicability
dealing w ith substantial am biguities in this P art
and which raise significant policy questions.
(ii) Official staff interpretations will be is­
sued upon those requests which, in the opinion
of the designated officials, require clarification
of technical am biguities in this P a rt or which
have no significant policy implications.
(iii) Unofficial staff interpretations will be
issued where the protection of § 130(f) of the
Act is neither requested nor required, or w here
tim e strictures require a rapid response.