Circular
Regulation Z - Truth in Lending
December 12, 1997
Circular No. 11006

Amendments Regarding Variable-Rate Disclosures

Compliance Optional Until October 1, 1998

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

The following is from a statement by the Board of Governors of the Federal Reserve System:

The Federal Reserve Board has issued an amendment to its Truth in Lending Regulation that gives creditors flexibility in providing variable-rate disclosures.

The amendment applies to variable-rate loans with a term exceeding one year and secured by the consumer's principal dwelling. It allows creditors to provide a statement that the periodic payment may substantially increase or decrease together with a maximum interest rate and payment based on a $10,000 loan amount, in lieu of providing a fifteen-year historical example of index values.

The revisions are effective immediately but compliance is optional until October 1, 1998.

The revisions implement a provision of the Regulatory Paperwork Reduction Act of 1996.

A copy of the amendments, as published in the Federal Register of December 1 is available as a file (pdf - 62kb). Questions on this matter may be directed to Janice A. Oser, Supervising Examiner, Compliance Examinations Department.