Regulation Z - Truth in Lending
February 17, 1998
Circular No. 11027

Annual Adjustment Affecting Disclosure

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 published its annual adjustment of the dollar amount that triggers additional disclosure requirements under Truth in Lending for mortgage loans that bear fees above a certain amount.

The Home Ownership and Equity Protection Act of 1994 bars credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed $400 or 8 percent of the total loan amount, whichever is larger. The Board must adjust this amount each year based on the annual percentage change in the Consumer Price Index in effect on June 1.

The Board has adjusted the dollar amount from $424 for 1997 to $435 for 1998.

The Boards notice, as published in the Federal Register of February 9 is available as a file (pdf - 12kb). Questions on this matter may be directed, at this Bank, to Janice A. Oser, Supervising Examiner, Compliance Examinations Department.