BOARD OF GOVERNORS
DIVISION OF CONSUMER
December 23, 2011
TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS SECTIONS
SUBJECT: Revised Interagency Examination Procedures for Regulation Z
The Task Force on Consumer Compliance of the Federal Financial Institutions Examination Council recently approved the attached interagency examination procedures for Regulation Z - Truth in Lending. These revised procedures supersede the Regulation Z interagency examination procedures transmitted with CA Letter 11-3.
The attached examination procedures reflect recent revisions to Regulation Z, which implements the Truth in Lending Act. Effective July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) increased the thresholds for exempt consumer credit transactions from $25,000 to $50,000. The Federal Reserve Board adjusted Regulation Z (Truth in Lending) by increasing the dollar threshold for exempt consumer credit transactions. In addition, the Dodd-Frank Act provides that, on or after December 31, 2011, the threshold must be adjusted annually by any annual percentage increase in the consumer price index. Accordingly, the exemption threshold will increase from $50,000 to $51,800 effective January 1, 2012.
The Federal Reserve Board also approved a rule amending Regulation Z to clarify aspects of prior Board rules implementing the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit Card Act). This rule is intended to enhance protections for consumers who use credit cards and to resolve areas of uncertainty so that card issuers fully understand their compliance obligations.
For example, the Board's rule clarifies that: (1) promotional programs that waive interest charges for a specified period of time are subject to the same Credit Card Act protections as promotional programs that apply a reduced rate for a specified period, and (2) application and similar fees that a consumer is required to pay before a credit card account is opened are covered by the same Credit Card Act limitations as fees charged during the first year after the account is opened.
If you have any questions, please contact Cathy Gates, Senior Project Manager at (202) 452-2099 or Paul Robin, Manager, Oversight and Policy, at (202) 452-3140.