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F E D E R A L R E S E R V E BANK O F N EW YO R K r Circular No. 81781 L September 12, 1977 J R E G U LA TIO N Z Postponement o f Full Implementation o f Rule Regarding Descriptive Billing o f Nonsale Credit Transactions To A ll Member Banks, and Others Concerned, in the Second Federal Reserve District: The Board of Governors of the Federal Reserve System has postponed the effective date— from October 28, 1977 to March 28, 1978— for full implementation of §226.7(k)(3 ) (ii) of Regulation Z, which prescribes rules regarding descriptive billing of nonsale credit transactions on open-end credit accounts. Following is the text of the Board of Governors’ press release in this matter: The Board of Governors of the Federal Reserve System today announced that it is postpon ing the effective date of a section of the Truth in Lending Regulation Z dealing with rules for the billing of credit transactions, such as cash advance checks. The section of the regulation involved (226.7(k ) (3 ) ( i i ) ) was scheduled to go into effect October 28, 1977. The date for full implementation of this section of the regulation is being post poned to March 28, 1978. The announcement said the action was taken because the Board is considering proposals de signed to facilitate compliance with the regulation by creditors, while maintaining requirements for description of transactions adequate to allow customers to identify them. At present, full implementation of this part of Regulation Z calls for the creditor to send a bill to the customer showing the date of the transaction or the date on the credit document (such as a cash advance check) and the amount of the transaction and stating what type of nonsale credit transaction is involved, such as a cash advance check, an overdraft credit or other. Until full implementation on March 28, 1978, creditors may substitute for the transaction date or the date on the credit document the date the transaction is debited to the customer’s account, or the creditor may omit any of the required information that is not available and treat any resulting inquiry from the customer as a billing error, triggering the billing error requirements of Regula tion Z. Any changes in this section (226.7(k ) (3 ) ( i i ) ) of Regulation Z will be published for com ment and possible revision before final action by the Board. Enclosed is a copy of the Board’s Order in this matter. Any questions regarding the Board’s action may be directed to our Consumer Affairs Division (Tel. No. 212-791-5919). P a u l A. V o lc ker , President. Board o f Governors o f the Federal Reserve System RE G U LA TIO N Z Order Postponing Full Implementation o f Section 2 2 6 .7 (k ) (3 ) (ii) (Docket Nos. R-0093 and R-0087) P A R T 226— T R U T H IN LEN D IN G Description of Transactions A G E N C Y : Board of Governors of the Federal Reserve System. A C T IO N : Final rule. S U M M A R Y : This rule postpones the date for full implementation of the regulation regarding descriptive billing of nonsale credit transac tions, such as cash advance checks, on open end credit accounts (Reg. Z, § 226.7(k) (3 ) (ii) ) until March 28, 1978. The action is taken in order to permit the full consideration of pro posals to amend this section of the regulation, which are designed to facilitate compliance with the regulation by creditors and, at the same time, to retain the essential description require ments of the present regulation for the benefit of consumers. E F F E C TIV E D A T E : August 31, 1977. FO R F U R TH E R IN F O R M A T IO N CON T A C T : Glenn E. Loney, Attorney, Division of Consumer Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. 20551 (202-452-2412). S U P P L E M E N T A R Y IN F O R M A T IO N : By this document the Board of Governors of the Federal Reserve System ( “ Board” herein) postpones the date for full implementation of § 226.7(k ) (3 ) (ii) of Regulation Z, which pre scribes rules regarding descriptive billing of nonsale credit transactions reflected on open end credit periodic statements. That section of the regulation was scheduled to become fully effective on October 28, 1977. However, be cause of the pendency of Board consideration of proposals to amend the section, it is neces sary to postpone the date until March 28, 1978, in order to have sufficient time to complete the consideration of the proposals and any rulemaking proceedings that become necessary. [Enc. Cir. Np. 8178] This postponement is also necessary in order to avoid the commitment of resources by creditors to comply with the requirements of the section as it is currently written until the Board has determined whether or not it should be changed, and to give creditors sufficient time to adjust their systems to comply with the requirements ultimately adopted. It should be made clear that this suspension relates only to the requirements of § 226.7(k )(3 ) ( ii) of Regulation Z regarding identifica tions of nonsale credit transactions, such as cash advance checks. The requirements of §226.7(k ) relating to other types of credit transactions are not affected hereby. Pursuant to 5 U.S.C. § 553 (1970) the Board finds that notice and public participation in this rulemaking are impractical and unnec essary since (1 ) time is of the essence in post poning the date for full implementation of the section, (2 ) the effective date is merely tempo rarily postponed, and (3 ) opportunity will be afforded for public comment on any changes in the substance of the subject regulation pro posed by the Board. In consideration of the foregoing and pur suant to the authority granted in 15 U.S.C. 1604 (1970) the Board hereby postpones the October 28, 1977 date for full implementation of § 226.7(k ) (3 ) (ii) of Regulation Z, as re flected in § 226.7(k) (7 ) ( i ) , until March 28, 1978. During the period of the postponement a creditor may comply with the requirements for identifying nonsale credit transactions on or with open end credit periodic statements either by use of the methods prescribed in § 226.7(k ) (3 ), by use of the alternatives prescribed in § 226.7(k) (4 ) or § 226.7(k) (7 ) (i ) , or by use of a combination of those methods. By order of the Board of Governors of the Federal Reserve System, August 31, 1977. P R IN T E D IN N E W Y O R K