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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Appeals of Material Supervisory Determinations: Guidelines & Decisions

SARC-2000-01 (May 23, 2000)

On May 19, 2000, the Supervision Appeals Review Committee (“Committee”) of the Federal Deposit Insurance Corporation (“FDIC”) considered the appeal by [Bank] (“Bank”), of the determination that the Bank violated the requirements of section 226.5a(d)(2) of 12 C.F.R. Part 226, Truth in Lending (Regulation Z) (“Regulation Z”).

After carefully considering the issues raised in your appeal package dated March 23, 2000, the Committee concluded that the finding of a violation of Regulation Z should be affirmed.

The Committee concluded that:

With respect to this last point, our research shows that several credit card issuers have dealt with this issue by providing the required Regulation Z disclosures both telephonically when the solicitation is made and in writing when the credit card is sent to the accountholder. Measures such as this definitively resolve the issue of whether the credit card issuer may charge an annual fee to the credit card holder.

This decision is considered a final supervisory determination by the FDIC.

By direction of the Supervision Appeals Review Committee of the Federal Deposit Insurance Corporation.

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