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Inactive Financial Institution Letters


October 19, 2000

SUBJECT: Final Rule Amending Regulation Z (Truth in Lending)

The Federal Reserve Board has adopted a final rule amending Regulation Z, which implements the Truth in Lending Act. The rule revises the disclosure requirements for credit and charge card solicitations and applications. Although the revisions are effective immediately, compliance is not mandatory until October 1, 2001. A copy of the final rule is attached.

The Truth in Lending Act requires disclosure of the annual percentage rate (APR) and other cost information in direct mail and other applications and solicitations to open credit and charge card accounts. The revisions to Regulation Z are intended to enhance consumers' ability to notice and understand this cost information, which generally must be provided in the form of a table.

Under the final rule, disclosures must be in a readily understandable form, and be readily noticeable to consumers. The APR for purchase transactions must be in 18-point type; cash advance and balance transfer APRs must now be included in the table; and balance transfer fees must be disclosed either in or outside of the table. The revised regulation provides additional guidance on the location and level of detail about the cost information required or permitted in the table.

The final rule also contains clarifications to corresponding sections of the Federal Reserve Board's Official Staff Commentary to Regulation Z.

For more information, please call Review Examiners Eric Kooistra (202-942-3339) or Louise Kotoshirodo Kramer (202-942-3599) in the Division of Compliance and Consumer Affairs.

Stephen M. Cross

Attachments: Federal Register, October 3, 2000 (Volume 65, Number 192), pages 58903-58911
HTML or PDF (195 KB File - PDF Help or Hard Copy)

Distribution: FDIC-Supervised Banks (Commercial and Savings)

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200).

Last Updated 10/18/2000

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