District Circular Letters
October16, 2000
BANKING SUPERVISION AND REGULATION:
REGULATION Z: FINAL RULE
To State Member Banks, Bank
Holding Companies, Financial
Holding Companies, U.S. Branches
And Agencies of Foreign Banks,
and Others Concerned,
in the Twelfth Federal Reserve District
Revision to Disclosure Requirements for Credit and Charge
Card Solicitations and Applications (R-1070)
PDF 47.2 KB
The Federal Reserve Board has announced the final rule
amending Regulation Z, which implements the Truth in Lending Act, to revise
the disclosure requirements for credit and charge card solicitations and
applications. The Regulation Z amendments are intended to make the disclosures
more noticeable and easier to understand.
The act currently requires that direct mail and other
applications and solicitations to open card accounts must disclose the
annual percentage rate (APR) and other cost information, generally in
the form of a table. Under the final rule, disclosures must be readily
noticeable and understandable to consumers. The APR for purchase transactions
must be in 18-point type. Cash advance and balance transfer APRs must
be included in the table. Balance transfer fees must be disclosed somewhere
in or outside the table. Additional guidance is provided on the requirement
that the card solicitation and application disclosures be prominently
located, and on the level of detail about cost information required or
permitted in the table. The Board believes that the revisions to the disclosure
requirements should help promote consumer awareness of the terms and rates
of credit card financing.
The revisions are effective immediately; compliance is
mandatory as of October 1, 2001.
Copies
Copies of the Board's notice (Docket
R-1070) PDF 47.2 KB are available from our Corporate
Services Department. To request copies to be sent by mail, please call
(415) 974-2060. To request copies to be sent by
fax, please call (415) 974-3333, and specify document
number 4214.
All circulars and documents are available on the Internet
through the Federal Reserve Bank of San Francisco's Internet site, at
http://www.frbsf.org/banking/letters/index.html .
Additional Information
For additional information about the final rule, please contact our Banking
Supervision and Regulation Department, at (415) 974-2967.
FEDERAL RESERVE BANK OF SAN FRANCISCO
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