BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
CA 03-5
Supersedes CA 97-2
March 21, 2003
TO THE OFFICERS AND MANAGERS IN CHARGE OF CONSUMER AFFAIRS SECTIONS:
RE: Revised Examination Procedures for Truth in Lending Act (Regulation Z)
Attached are revised examination procedures for the Truth in Lending Act (TILA) (249 KB PDF) which was approved by the FFIEC. The revisions to the TILA examination procedures were necessitated by the Board's adoption, on December 14, 2001, of amendments to the provisions of Regulation Z that implement the Home Ownership and Equity Protection Act (HOEPA). The Board's amendments to Regulation Z broaden the scope of mortgage loans subject to HOEPA by adjusting the price triggers used to determine coverage under the act. The amendments restrict certain acts and practices in connection with home-secured loans. In addition, the amendments strengthen HOEPA's prohibition against extending credit without regard to consumer's repayment ability and enhance disclosures received by consumers before closing for HOEPA-covered loans.
The examination procedures reflect other amendments to TILA, specifically; closed-end variable-rate information (§ 226.18(f), § 226.19(b) and § 226.20(c)) and open-end credit and charge card required disclosures (§ 226.5(b)). Technical changes for clarity were made to some of the charts within the document.
Please distribute these procedures to your examination staff for immediate use.
Any questions on the examination procedures should be directed to the review examiner for your district.
Sincerely,
(signed)
Shawn McNulty
Associate Director