Circular
Regulation Z - Truth in Lending
October 10, 1996
Circular No. 10880

Amendments Effective October 21, 1996

To All Depository Institutions, and Others Concerned, in the Second Federal Reserve District:

Following is the text of a statement issued by the Board of Governors of the Federal Reserve System:

The Federal Reserve Board has announced the adoption of a final rule amending Regulation Z, Truth in Lending. This new rule is effective October 21, 1996.

The revisions to Regulation Z incorporate changes made by the Truth in Lending Act Amendments of 1995. The amendments establish new creditor-liability rules for closed-end loans secured by real property or dwellings and consummated on or after September 30, 1995.

The amendments also clarify how lenders must disclose certain fees connected with mortgage loans.

In addition, the Board is publishing a new rule regarding the treatment of fees charged in connection with debt cancellation agreements. The rule is similar to the existing rule for credit insurance premiums and provides for more uniform treatment of these fees.

The text of the amendment to Regulation Z, as published in the Federal Register of September 19 is available. Questions on this matter may be directed to Janice A. Oser, Supervising Examiner, Compliance Examinations Department.