Circular
Truth in Lending: Annual Adjustment Affecting Disclosure
August 20, 2003
Circular No. 11537

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

In a press release, the Federal Reserve Board published its annual adjustment of the dollar amount that triggers additional disclosure requirements under the Truth in Lending Act for home mortgage loans that bear rates or fees above a certain amount.

The dollar amount of the fee-based trigger has been adjusted to $499 for 2004 based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2003.

The adjustment is effective January 1, 2004.

The Home Ownership and Equity Protection Act of 1994 bars credit terms such us balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed the fee-based trigger (initially set at $400 and adjusted annually) or 8 percent of the total loan amount, whichever is larger.

The Board’s statement is attached.

Questions on this matter may be directed at this Bank to Maryann Campbell, Supervising Examiner, Legal and Compliance Risk Department.