District Circular Letters

December 6, 2000

BANKING SUPERVISION AND REGULATION:
REGULATION Z
and
NEW INTERNET RESOURCE FOR
CONSUMER REGULATION

To State Member Banks, Bank
Holding Companies, U.S. Branches and
Agencies of Foreign Banks, and Others Concerned
in the Twelfth Federal Reserve District

Annual Adjustment of the Dollar Amount that Triggers Additional Disclosure Requirements Under Truth In Lending Act (R-1089) PDF file 15.1 KB

The Federal Reserve Board has made the annual adjustment of the dollar amount that triggers additional disclosure requirements under the Truth in Lending Act for mortgage loans that bear rates or fees above a certain amount.

Under the revision to the Board’s staff commentary to Regulation Z, the dollar amount of the fee-based trigger has been adjusted from $451 for 2000 to $465 for 2001, based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2000.

The adjustment is effective January 1, 2001.

The Home Ownership and Equity Protection Act of 1994 bars credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed $400 (to be adjusted annually) or 8 percent of the total loan amount, whichever is larger.

The Checkers Bank Challenges Internet Users to Apply Consumer Regulations

The Federal Reserve Board has designed a new Internet resource that will help bankers and bank examiners apply consumer regulations to Internet banking. The Checkers Bank (TCB) is a mock online bank whose website contains violations of federal consumer protection regulations. The violations are highlighted for further investigation.

The TCB site contains web pages that address such financial issues as:

• Loans and credit cards
• Consumer deposits
• Investments
• Commercial services

Support sidebars, which are accessed through links, provide educational features to help users spot violations and learn more about the underlying regulation. Each sidebar offers the follow features:

• Need a hint: Gives hints on what may be wrong without eliminating the challenge
• Findings and Follow-up: Marks actual violations or problems that require further investigation
• Review Regs: A hyperlink to the Federal Reserve Board’s Regulations Directory
• Suggest Changes: Allows users to electronically send feedback to the Federal Reserve

Users may peruse the site at their own pace. The Checkers Bank may be accessed at http://www.federalreserve.gov/tcb/index.html.

Copies

Copies of Docket R-1089 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 4148.

Additional Information

For additional information about the annual adjustment of the dollar amount that triggers additional disclosure requirements under the Truth in Lending Act (R-1089), please contact our Banking Supervision and Regulation Department, at (415) 974-2967.

FEDERAL RESERVE BANK OF SAN FRANCISCO