Regulation Z -- Truth in Lending
December 31, 1996
Circular No. 10903

Annual Adjustment Affecting Disclosures

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

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

The Federal Reserve Board has published, under Regulation Z requirements, an adjustment of the dollar amount which triggers additional disclosure for certain types of mortgages. The adjustment is effective January 1, 1997.

The Board is required to adjust annually the amount of total points and fees paid by the borrower which triggers additional disclosures under Truth in Lending. The adjustment is based on the annual percentage change in the Consumer Price Index in effect on June 1. In 1996, the adjustment raised the base amount from $400 to $412. For 1997, the base amount has been raised to $424.

This adjustment was made as a result of the Home Ownership and Equity Protection Act of 1994, which sets forth rules for creditors offering home-secured loans with total points and fees payable by the consumer at or before loan consummation that exceed the greater of $400 or 8 percent of the total loan amount.

The text of the Board's notice, as published in the Federal Register of December 12 , is available. Questions regarding Regulation Z may be directed, at this Bank, to Janice A. Oser, Supervising Examiner, Compliance Examinations Department.