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Financial Institution Letter

Regulation Z (Truth in Lending) Early Disclosure Requirements

Summary: During 2008, the Federal Reserve promulgated revisions to Regulation Z (Truth in Lending) closed-end mortgage early disclosure requirements that were to take effect October 1, 2009. However, these changes were superseded by the enactment of the Mortgage Disclosure Improvement Act of 2008 (MDIA). As a result, the Federal Reserve has revised Regulation Z to incorporate the MDIA amendments. Compliance with the revised early disclosure requirements is mandatory on July 30, 2009.

The revisions to the Truth in Lending Act (TILA) early disclosure requirements, incorporating the MDIA amendments:

  • expand the requirements to mortgage loans secured by any dwelling of a consumer. The requirements no longer are limited to a consumer's "principal" dwelling. The early disclosure requirements also now cover refinancings and home equity loans.
  • require delivery or mailing of the early disclosures within three business days of receiving a consumer's mortgage loan application. A lender also must wait until at least seven business days after delivery of the disclosures before consummating the mortgage loan.
  • require corrected disclosures to be delivered at least three business days before consummation if the annual percentage rate provided in the early disclosures changes beyond the tolerances provided in Section 226.22.
  • prohibit a lender from charging a consumer any fee, except to obtain a credit report, until after the early disclosures have been provided.
  • permit a consumer to expedite the closing of a mortgage loan subject to the early disclosure provisions to address a personal financial emergency, such as foreclosure.
  • inform a consumer that he or she is not required to complete the transaction because the consumer has received the early disclosures or applied for a loan.
(See the attached supplement for a comparison of the 2008 and 2009 revisions and FIL-134-2008 for an overview of the 2008 revisions.)

FDIC-supervised Banks (Commercial and

Suggested Routing:
Chief Executive Officer
Chief Loan Officer
Chief Compliance Officer
General Counsel

FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at .

To receive FILs electronically, please visit .

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703- 562-2200).

Additional Related Topics:

  • Truth in Lending Act
  • Mortgage Disclosure Improvement Act of 2008
  • FIL-134-2008
  • 12 CFR Part 226, final rule
Last Updated: June 1, 2009