April
20, 2004
Public Information Room
Office of the Comptroller of the Currency
250 E St., S.W.
Mailstop 1-5
Washington, DC 20219
Re: Docket No. 04-05
Ms. Jennifer J. Johnson
Secretary
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, DC 20551
Re: Docket No. R-1180
Mr. Robert W. Feldman
Executive Secretary
Federal Deposit Insurance Corporation
550 Seventeenth St., N.W.
Washington, DC 20429
Re: EGRPRA Burden Reduction Comment
Regulation Comments
Chief Counsel’s Office
Office of Thrift Supervision
1700 G Street, N.W.
Washington, DC 20552
Re: No. 2003-67
Dear Sir or Madam:
In response to the notice of regulatory review and request for comments
published in the January 21, 2004 Federal Register, the New York
Bankers Association is submitting these comments on consumer protection
lending-related rules subject to review under the Economic Growth
and Regulatory Paperwork Reduction Act of 1996. These comments reflect
the views submitted as the result of a request for comments shared
with our member banks. Our Association is comprised of the community,
regional and money center banks of New York State, which have aggregate
assets in excess of $1 trillion and more than 280,000 New York employees.
Our comments follow the order of the regulations described on Federal
Register page 2855.
Loans in Identified Flood Hazard Areas
The interagency regulations implementing the national flood insurance
program require that lenders provide borrowers and servicers a notice
stating whether flood insurance is available on the property securing
a particular loan and retain a record of receipt of the notice by
both borrowers and servicers. We would respectfully suggest that
the agencies provide guidance as to what constitutes a record of
receipt of notice. In this regard, we believe that purchase by a
borrower of flood insurance should be considered a de facto receipt
of notice of the availability of the insurance.
Consumer Leasing
When consumer leases are renegotiated or extended under Section
213.5 of Regulation M (implementing the Consumer Leasing Act) for
an aggregate period of six months or more, lessors are required to
provide new disclosures of the lease contract terms. However, in
many cases, consumers request month-to-month extensions of the original
lease contract in order to obtain financing for the buy-out of leased
personal property or to obtain time to find replacement property.
Where the original lease contract is extended on a month-to-month
basis, re-disclosure will provide little additional information to
consumers and is unnecessary. We would therefore respectfully suggest
that Section 213.5 be amended to require re-disclosure only with
regard to a lease extension or extensions that, in the aggregate,
exceeds twelve months beyond the original lease term.
Equal Credit Opportunity
Regulation B,
implementing the Equal Credit Opportunity Act, prohibits a creditor
from taking
into account the existence of a telephone
listing in a credit applicant’s name in evaluating the creditworthiness
of the applicant. However, the same regulation (12 CFR 202.6(b)(4))
authorizes a creditor to take into account whether there is a telephone
in the applicant’s residence. We understand that this provision
of Regulation B was adopted prior to the widespread use of cellular
telephones and reflected the agencies’ concern that public
telephone listings in households shared by more than one adult tended
to be placed in the name of a male member of the household. We would
respectfully suggest that creditors be permitted to take into account
whether a credit applicant owns a cellular telephone in making credit
determinations. As more and more households are coming to rely on
wireless communication devices, fewer and fewer of such devices will
be considered as falling within the parameters of section 202.6(b)(4).
Truth in Lending
Regulation Z, implementing the Truth in Lending Act, contains, we
believe, unrealistically low dollar threshold tolerances for the
accuracy of finance charge disclosures. As the agencies are aware,
a disproportionately high percentage of violations of Regulation
Z result from disclosures that exceed the threshold tolerances. Many
of the tolerance levels have not been examined for several years.
We would respectfully suggest that the agencies review and increase
the thresholds, at least to take into account inflation that has
occurred since the thresholds were originally established. In view
of the larger average size of loans today, the agencies may wish
to consider establishing either a higher fixed threshold amount or
a percentage of the principal loan balance which reflects at least
the increases in inflation as a new threshold.
The New York Bankers Association appreciates the opportunity the
agencies have provided to comment on these regulations. Please feel
free to contact us with any questions.
Sincerely,
Michael P. Smith
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