District Circular Letters

November 26, 2001

BANKING SUPERVISION AND REGULATION:
REGULATION Z

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 Regulation Z (R-1116)

The Federal Reserve Board on Wednesday published its 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 $465 for 2001 to $480 for 2002 based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2001.

The adjustment is effective January 1, 2002.

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 the fee-based trigger (initially set at $400 and adjusted annually) or 8 percent of the total loan amount, whichever is larger.

Additional Information

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. Paper copies of the Board's notice (Docket R-1116) are available from our Corporate Services Department. To request copies to be sent by mail, please call (415) 974-2060.

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

FEDERAL RESERVE BANK OF SAN FRANCISCO