Regulation Z - Truth in Lending - Disclosure Requirements for Credit and Charge Card Solicitations and Applications
October 11, 2000
Circular No. 11279

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

The following press release was issued on September 28th by the Board of Governors of the Federal Reserve System.

The Federal Reserve Board today published a final rule amending Regulation Z, which implements the Truth in Lending Act, to revise the disclosure requirements for credit and charge card solicitations and applications.

The act requires that direct mail and other applications and solicitations to open card accounts must disclose the annual percentage rate (APR) and other cost information, generally in the form of a table. The Regulation Z amendment are intended to make the disclosures more noticeable and easier to understand.

Under the final rule, disclosures must be in a readily understandable form and readily noticeable to consumers. The APR for purchase transactions must be in 18-point type. Cash advance and balance transfer APRs must be included in the table. Balance transfer fees must be disclosed either in or outside of the table. Additional guidance is provided on the requirement that the table be prominently located, and on the level of detail about cost information required or permitted in the table. The revisions are effective immediately; compliance is mandatory as of October 1, 2001.

The Board believes that the revisions to the disclosure requirements should help promote consumer awareness of the terms and rates of credit card financing.

Printed on the following pages is the text of this final rule. Questions may be directed at this Bank, to Janice A. Oser, Bank Supervision Officer, Legal and Compliance Risk Department.