Mandatory Compliance with Automobile Leasing Provisions - Delayed until January 1, 1998
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 delayed the date for mandatory compliance with revisions to Regulation M that apply to automobile leasing from October 1, 1997, to January 1, 1998.
The Board's revised regulation made a significant number of substantive changes to the regulation, establishing new disclosures to improve consumers' understanding of automobile and other lease transactions. The changes required the preparation of new leasing forms and the reprogramming of the computer software used to produce the consumer lease disclosures at automobile dealerships.
Representatives of leasing companies, automobile dealerships, and vendor support services requested a delay in the date set by the Board for mandatory compliance. Installation of new leasing software is still under way at many of the 22,500 new-car dealerships that arrange leases through approximately 9,000 leasing companies. As a result, many of the dealerships are unable to produce computer-generated disclosures by October 1.
The Board approved the delay to ensure that consumers receive accurate and meaningful disclosures through computer generated programs when they enter into lease transactions. The Board's official notice as published in the Federal Register of September 30 is available as a file (pdf - 6kb). The revisions to Regulation M were sent to you with our Circular No. 10884, dated October 25, 1996.