Truth in Lending, 46837-46838 [2010-19101]

Download as PDF 46837 Rules and Regulations Federal Register Vol. 75, No. 149 Wednesday, August 4, 2010 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. FEDERAL RESERVE SYSTEM 12 CFR Part 226 [Regulation Z; Docket No. R–1389] Truth in Lending Board of Governors of the Federal Reserve System. ACTION: Final rule; staff commentary. AGENCY: The Board is publishing a final rule amending the staff commentary that interprets the requirements of Regulation Z (Truth in Lending). The Board is required to adjust annually the dollar amount that triggers requirements for certain home mortgage loans bearing fees above a certain amount. The Home Ownership and Equity Protection Act of 1994 (HOEPA) sets forth rules for homesecured loans in which the total points and fees payable by the consumer at or before loan consummation exceed the greater of $400 or 8 percent of the total loan amount. In keeping with the statute, the Board has annually adjusted the $400 amount based on the annual percentage change reflected in the Consumer Price Index as reported on June 1. The adjusted dollar amount for 2011 is $592. DATES: Effective Date: January 1, 2011. FOR FURTHER INFORMATION CONTACT: Dana Miller, Senior Attorney, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452–3667. For the users of Telecommunications Device for the Deaf (‘‘TDD’’) only, contact (202) 263–4869. SUPPLEMENTARY INFORMATION: jdjones on DSK8KYBLC1PROD with RULES SUMMARY: I. Background The Truth in Lending Act (TILA; 15 U.S.C. 1601–1666j) requires creditors to disclose credit terms and the cost of consumer credit as an annual percentage rate. The act requires VerDate Mar<15>2010 12:40 Aug 03, 2010 Jkt 220001 additional disclosures for loans secured by a consumer’s home, and permits consumers to cancel certain transactions that involve their principal dwelling. TILA is implemented by the Board’s Regulation Z (12 CFR part 226). The Board’s official staff commentary (12 CFR part 226 (Supp. I)) interprets the regulation, and provides guidance to creditors in applying the regulation to specific transactions. In 1995, the Board published amendments to Regulation Z implementing HOEPA, contained in the Riegle Community Development and Regulatory Improvement Act of 1994, Public Law 103–325, 108 Stat. 2160 (60 FR 15463). These amendments, contained in §§ 226.32 and 226.34 of the regulation, impose substantive limitations and additional disclosure requirements on certain closed-end home mortgage loans bearing rates or fees above a certain percentage or amount. As enacted, the statute requires creditors to comply with the HOEPA requirements if the total points and fees payable by the consumer at or before loan consummation exceed the greater of $400 or 8 percent of the total loan amount. TILA and Regulation Z provide that the $400 figure shall be adjusted annually on January 1 by the annual percentage change in the Consumer Price Index (CPI) that was reported on the preceding June 1. 15 U.S.C. 1602(aa)(3) and 12 CFR 226.32(a)(1)(ii). The Board adjusted the $400 amount to $579 for the year 2010. The Bureau of Labor Statistics publishes consumer-based indices monthly, but does not report a CPI change on June 1; adjustments are reported in the middle of each month. The Board uses the CPI–U index, which is based on all urban consumers and represents approximately 87 percent of the U.S. population, as the index for adjusting the $400 dollar figure. The adjustment to the CPI–U index reported by the Bureau of Labor Statistics on May 19, 2010, was the CPI–U index in effect on June 1, and reflects the percentage change from April 2009 to April 2010. The adjustment to the $400 figure below reflects a 2.2 percent increase in the CPI–U index for this period and is rounded to whole dollars for ease of compliance. The fee trigger being adjusted in this Federal Register notice pursuant to TILA section 103(aa) is used in PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 determining whether a loan is covered by section 226.32 of Regulation Z. Such loans have generally been known as ‘‘HOEPA loans.’’ In July 2008, the Board revised Regulation Z to adopt additional protections for ‘‘higher-priced’’ loans, using its authority under TILA section 129(l)(2). Those revisions define a class of dwelling-secured transactions, described in section 226.35 of Regulation Z, using a threshold based on average market rates that the Board publishes on a regular basis. The adjustment published today does not affect the triggers adopted in July 2008 for higher-priced loans. On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ‘‘Reform Act’’) was enacted into law.1 Section 1431 of the Reform Act revises the statutory fee trigger for HOEPA loans. The amendments made by Section 1431 of the Reform Act will be implemented in a future rulemaking. Accordingly, the adjustment to the fee trigger that is being published today will become effective on January 1, 2011 and will apply for one year, or until final rules under the Reform Act become effective, whichever is earlier. II. Adjustment and Commentary Revision Effective January 1, 2011, for purposes of determining whether a home mortgage transaction is covered by 12 CFR 226.32 (based on the total points and fees payable by the consumer at or before loan consummation), a loan is covered if the points and fees exceed the greater of $592 or 8 percent of the total loan amount. Comment 32(a)(1)(ii)–2, which lists the adjustments for each year, is amended to reflect the dollar adjustment for 2011. Because the timing and method of the adjustment are set by statute, the Board finds that notice and public comment on the change are unnecessary. III. Regulatory Flexibility Analysis The Board certifies that this amendment to Regulation Z will not have a significant economic impact on a substantial number of small entities. The only change is to increase the threshold for transactions requiring HOEPA disclosures. This change is mandated by statute. 1 Public E:\FR\FM\04AUR1.SGM Law 111–203, 124 Stat. 1376 (2010). 04AUR1 46838 Federal Register / Vol. 75, No. 149 / Wednesday, August 4, 2010 / Rules and Regulations List of Subjects in 12 CFR Part 226 DEPARTMENT OF TRANSPORTATION Advertising, Federal Reserve System, Mortgages, Reporting and recordkeeping requirements, Truth in lending. Federal Aviation Administration For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR part 226, as set forth below: [Docket No. NM430; Special Conditions No. 25–408–SC] ■ PART 226—TRUTH IN LENDING (REGULATION Z) Authority: 12 U.S.C. 3806; 15 U.S.C. 1604 and 1637(c)(5). 2. In Supplement I to Part 226, under Section 226.32—Requirements for Certain Closed-End Home Mortgages, under Paragraph 32(a)(1)(ii), paragraph 2.xvi. is added. ■ Supplement I to Part 226—Official Staff Interpretations * * * * Subpart E—Special Rules for Certain Home Mortgage Transactions * * * * * Section 226.32—Requirements for Certain Closed-End Home Mortgages 32(a) Coverage * * * * * Paragraph 32(a)(1)(ii) * * * * * 2. Annual adjustment of $400 amount. * * * * * xvi. For 2011, $592, reflecting a 2.2 percent increase in the CPI–U from June 2009 to June 2010, rounded to the nearest whole dollar. * * * * * By order of the Board of Governors of the Federal Reserve System, acting through the Director of the Division of Consumer and Community Affairs under delegated authority, July 29, 2010. Jennifer J. Johnson, Secretary of the Board. [FR Doc. 2010–19101 Filed 8–3–10; 8:45 am] jdjones on DSK8KYBLC1PROD with RULES BILLING CODE 6210–01–P Special Conditions: Embraer ERJ 190– 100 Series Airplane Seats With NonTraditional, Large, Non-Metallic Panels Federal Aviation Administration (FAA), DOT. ACTION: Final special conditions; request for comments. AGENCY: 1. The authority citation for part 226 continues to read as follows: ■ * 14 CFR Part 25 These special conditions are issued for the Embraer ERJ 190–100 series airplane. This airplane will have novel or unusual design features that include non-traditional, large, nonmetallic panels that would affect survivability during a post-crash fire event. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards. DATES: The effective date of these special conditions is June 29, 2010. We must receive your comments by September 3, 2010. ADDRESSES: You must mail two copies of your comments to: Federal Aviation Administration, Transport Airplane Directorate, Attn: Rules Docket (ANM– 113), Docket No. NM430, 1601 Lind Avenue, SW., Renton, Washington 98057–3356. You may deliver two copies to the Transport Airplane Directorate at the above address. You must mark your comments: Docket No. NM430. You can inspect comments in the Rules Docket weekdays, except Federal holidays, between 7:30 a.m. and 4 p.m. FOR FURTHER INFORMATION CONTACT: Cindy Ashforth, FAA, International Branch, ANM–116, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue, SW., Renton, Washington 98057–3356; telephone (425) 227–2768; facsimile (425) 227–1320. SUPPLEMENTARY INFORMATION: SUMMARY: Future Requests for Installation of Seats With Non-Traditional, Large, NonMetallic Panels The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions are impracticable because these VerDate Mar<15>2010 12:40 Aug 03, 2010 Jkt 220001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 procedures would significantly delay issuance of the design approval and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public-comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon issuance. We anticipate that seats with nontraditional, large, non-metallic panels will be installed in other makes and models of airplanes. We have made the determination to require special conditions for all applications requesting the installation of seats with non-traditional, large, non-metallic panels until the airworthiness requirements can be revised to address this issue. Having the same standards across the range of airplane makes and models will ensure consistent ruling for the aviation industry. Comments Invited We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments. We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel about these special conditions. You can inspect the docket before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays. We will consider all comments we receive by the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive. If you want us to acknowledge receipt of your comments on these special conditions, include with your comments a self-addressed, stamped postcard on which you have written the docket number. We will stamp the date on the postcard and mail it back to you. Background On March 9, 2010, Embraer applied for a change to Type Certificate No. A57NM for a new interior arrangement of 112 slim passenger seats in the ERJ 190–100 STD, ERJ 190–100 LR, and ERJ E:\FR\FM\04AUR1.SGM 04AUR1

Agencies

[Federal Register Volume 75, Number 149 (Wednesday, August 4, 2010)]
[Rules and Regulations]
[Pages 46837-46838]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-19101]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 75, No. 149 / Wednesday, August 4, 2010 / 
Rules and Regulations

[[Page 46837]]



FEDERAL RESERVE SYSTEM

12 CFR Part 226

[Regulation Z; Docket No. R-1389]


Truth in Lending

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule; staff commentary.

-----------------------------------------------------------------------

SUMMARY: The Board is publishing a final rule amending the staff 
commentary that interprets the requirements of Regulation Z (Truth in 
Lending). The Board is required to adjust annually the dollar amount 
that triggers requirements for certain home mortgage loans bearing fees 
above a certain amount. The Home Ownership and Equity Protection Act of 
1994 (HOEPA) sets forth rules for home-secured loans in which the total 
points and fees payable by the consumer at or before loan consummation 
exceed the greater of $400 or 8 percent of the total loan amount. In 
keeping with the statute, the Board has annually adjusted the $400 
amount based on the annual percentage change reflected in the Consumer 
Price Index as reported on June 1. The adjusted dollar amount for 2011 
is $592.

DATES: Effective Date: January 1, 2011.

FOR FURTHER INFORMATION CONTACT: Dana Miller, Senior Attorney, Division 
of Consumer and Community Affairs, Board of Governors of the Federal 
Reserve System, at (202) 452-3667. For the users of Telecommunications 
Device for the Deaf (``TDD'') only, contact (202) 263-4869.

SUPPLEMENTARY INFORMATION:

I. Background

    The Truth in Lending Act (TILA; 15 U.S.C. 1601-1666j) requires 
creditors to disclose credit terms and the cost of consumer credit as 
an annual percentage rate. The act requires additional disclosures for 
loans secured by a consumer's home, and permits consumers to cancel 
certain transactions that involve their principal dwelling. TILA is 
implemented by the Board's Regulation Z (12 CFR part 226). The Board's 
official staff commentary (12 CFR part 226 (Supp. I)) interprets the 
regulation, and provides guidance to creditors in applying the 
regulation to specific transactions.
    In 1995, the Board published amendments to Regulation Z 
implementing HOEPA, contained in the Riegle Community Development and 
Regulatory Improvement Act of 1994, Public Law 103-325, 108 Stat. 2160 
(60 FR 15463). These amendments, contained in Sec. Sec.  226.32 and 
226.34 of the regulation, impose substantive limitations and additional 
disclosure requirements on certain closed-end home mortgage loans 
bearing rates or fees above a certain percentage or amount. As enacted, 
the statute requires creditors to comply with the HOEPA requirements if 
the total points and fees payable by the consumer at or before loan 
consummation exceed the greater of $400 or 8 percent of the total loan 
amount. TILA and Regulation Z provide that the $400 figure shall be 
adjusted annually on January 1 by the annual percentage change in the 
Consumer Price Index (CPI) that was reported on the preceding June 1. 
15 U.S.C. 1602(aa)(3) and 12 CFR 226.32(a)(1)(ii). The Board adjusted 
the $400 amount to $579 for the year 2010.
    The Bureau of Labor Statistics publishes consumer-based indices 
monthly, but does not report a CPI change on June 1; adjustments are 
reported in the middle of each month. The Board uses the CPI-U index, 
which is based on all urban consumers and represents approximately 87 
percent of the U.S. population, as the index for adjusting the $400 
dollar figure. The adjustment to the CPI-U index reported by the Bureau 
of Labor Statistics on May 19, 2010, was the CPI-U index in effect on 
June 1, and reflects the percentage change from April 2009 to April 
2010. The adjustment to the $400 figure below reflects a 2.2 percent 
increase in the CPI-U index for this period and is rounded to whole 
dollars for ease of compliance.
    The fee trigger being adjusted in this Federal Register notice 
pursuant to TILA section 103(aa) is used in determining whether a loan 
is covered by section 226.32 of Regulation Z. Such loans have generally 
been known as ``HOEPA loans.'' In July 2008, the Board revised 
Regulation Z to adopt additional protections for ``higher-priced'' 
loans, using its authority under TILA section 129(l)(2). Those 
revisions define a class of dwelling-secured transactions, described in 
section 226.35 of Regulation Z, using a threshold based on average 
market rates that the Board publishes on a regular basis. The 
adjustment published today does not affect the triggers adopted in July 
2008 for higher-priced loans.
    On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (the ``Reform Act'') was enacted into law.\1\ Section 
1431 of the Reform Act revises the statutory fee trigger for HOEPA 
loans. The amendments made by Section 1431 of the Reform Act will be 
implemented in a future rulemaking. Accordingly, the adjustment to the 
fee trigger that is being published today will become effective on 
January 1, 2011 and will apply for one year, or until final rules under 
the Reform Act become effective, whichever is earlier.
---------------------------------------------------------------------------

    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
---------------------------------------------------------------------------

II. Adjustment and Commentary Revision

    Effective January 1, 2011, for purposes of determining whether a 
home mortgage transaction is covered by 12 CFR 226.32 (based on the 
total points and fees payable by the consumer at or before loan 
consummation), a loan is covered if the points and fees exceed the 
greater of $592 or 8 percent of the total loan amount. Comment 
32(a)(1)(ii)-2, which lists the adjustments for each year, is amended 
to reflect the dollar adjustment for 2011. Because the timing and 
method of the adjustment are set by statute, the Board finds that 
notice and public comment on the change are unnecessary.

III. Regulatory Flexibility Analysis

    The Board certifies that this amendment to Regulation Z will not 
have a significant economic impact on a substantial number of small 
entities. The only change is to increase the threshold for transactions 
requiring HOEPA disclosures. This change is mandated by statute.

[[Page 46838]]

List of Subjects in 12 CFR Part 226

    Advertising, Federal Reserve System, Mortgages, Reporting and 
recordkeeping requirements, Truth in lending.

0
For the reasons set forth in the preamble, the Board amends Regulation 
Z, 12 CFR part 226, as set forth below:

PART 226--TRUTH IN LENDING (REGULATION Z)

0
1. The authority citation for part 226 continues to read as follows:

    Authority: 12 U.S.C. 3806; 15 U.S.C. 1604 and 1637(c)(5).

0
2. In Supplement I to Part 226, under Section 226.32--Requirements for 
Certain Closed-End Home Mortgages, under Paragraph 32(a)(1)(ii), 
paragraph 2.xvi. is added.

Supplement I to Part 226--Official Staff Interpretations

* * * * *

Subpart E--Special Rules for Certain Home Mortgage Transactions

* * * * *

Section 226.32--Requirements for Certain Closed-End Home Mortgages

32(a) Coverage

* * * * *

Paragraph 32(a)(1)(ii)

* * * * *
    2. Annual adjustment of $400 amount.
* * * * *
    xvi. For 2011, $592, reflecting a 2.2 percent increase in the CPI-U 
from June 2009 to June 2010, rounded to the nearest whole dollar.
* * * * *


    By order of the Board of Governors of the Federal Reserve 
System, acting through the Director of the Division of Consumer and 
Community Affairs under delegated authority, July 29, 2010.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2010-19101 Filed 8-3-10; 8:45 am]
BILLING CODE 6210-01-P