Truth in Lending: Annual Adjustment Affecting Disclosure
August 12, 2004
Circular No. 11635

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

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 raised to $510 for 2005 based on the annual percentage change reflected in the Consumer Price Index that was in effect on June 1, 2004.

The adjustment is effective January 1, 2005.

The Home Ownership and Equity Protection Act of 1994 restricts credit terms such as 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.

Press release OFFSITE
Board’s notice OFFSITE PDF

Maryann Campbell
Supervising Examiner
Legal and Compliance Risk Department