Recordkeeping and Disclosure Requirements in Connection with Regulation Z (Truth in Lending) and Section 227.28 of Regulation AA (Unfair or Deceptive Acts or Practices (UDAP))
ICR 200812-7100-001
OMB: 7100-0199
Federal Form Document
⚠️ Notice: This information collection may be outdated. More recent filings for OMB 7100-0199 can be found here:
Recordkeeping and Disclosure
Requirements in Connection with Regulation Z (Truth in Lending) and
Section 227.28 of Regulation AA (Unfair or Deceptive Acts or
Practices (UDAP))
Truth In Lending Act (TILA) and
Regulation Z ensure adequate disclosure of the costs and terms of
credit to consumers. For open-end credit, creditors are required to
disclose information about the initial costs and terms and to
provide periodic statements of account activity, notices of changes
in terms, and statements of rights concerning billing error
procedures. The regulation also requires specific types of
disclosures for credit and charge card accounts, and home-equity
plans. For closed-end loans, such as mortgage and installment
loans, cost disclosures are required to be provided prior to
consummation. Special disclosures are required of certain products,
such as reverse mortgages, certain variable-rate loans, and certain
mortgages with rates and fees above specified thresholds. TILA and
Regulation Z also contain rules concerning credit advertising. To
ease the burden and cost of complying with Regulation Z
(particularly for small entities), the Federal Reserve provides
model forms, which are appended to the regulation. Creditors are
required to retain evidence of compliance for twenty-four months
(subpart D, section 226.25), but the regulation does not specify
the types of records that must be retained.
On June 14 2007, a notice of
proposed rulemaking was published in the Federal Register for
public comment (72 FR 32948). The Federal Reserve proposed changes
to format, timing, and content requirements for the five main types
of disclosures governed by Regulation Z: (1) application and
solicitation disclosures; (2) account opening disclosures; (3)
periodic statement disclosures; (4) change-in-terms notices; and
(5) advertising provisions. The goal of the proposed revisions is
to improve the effectiveness of TILA disclosures throughout the
life of an open-end (not home-secured) plan. The proposed revisions
are intended to provide the most essential information to consumers
at the point in time the information would be most useful to them.
The comment period expired October 12, 2007. The Federal Reserve
received over 2,500 comments on the June 2007 proposal. On May 19,
2008, a second notice of proposed rulemaking was published in the
Federal Register for public comment (73 FR 28866). The Federal
Reserve sought comment on a limited number of additional revisions
to the regulation and commentary. New proposed amendments address
creditors responsibilities to establish reasonable instructions
for receiving timely payments and when a due date falls on a
weekend or holiday. Creditors responsibilities when investigating
a claim of unauthorized transactions or an allegation of a billing
error are also addressed. Advertisements for deferred interest
plans would be required to provide additional information about how
interest could be imposed. The Federal Reserve also proposes to
revise the recordkeeping and disclosure requirements of Regulation
Z, by adding the disclosure requirements in Section 227.14(b) of
Regulation A. The information collection would be renamed as the
recordkeeping and disclosure requirements associated with
Regulation Z (Truth in Lending) and Section 227.14(b) of Regulation
AA (Unfair or Deceptive Acts or Practices). The comment period
expired July 18, 2008. The Federal Reserve received over 450
comments on the May 2008 proposal. On January 29, 2009, a notice of
final rulemaking was published in the Federal Register adopting the
amendments largely as proposed, with mandatory compliance July 1,
2010 (74 FR 5244). Except as otherwise noted, the changes apply
solely to open-end credit. Disclosures accompanying credit card
applications and solicitations must highlight fees and reasons
penalty rates might be applied, such as for paying late. Creditors
are required to summarize key terms at account opening and when
terms are changed. Specific fees are identified that must be
disclosed to consumers in writing before an account is opened, and
creditors are given flexibility regarding how and when to disclose
other fees imposed as part of the open-end plan. Costs for interest
and fees are separately identified for the cycle and year to date.
A Creditor is required to give 45 days advance notice prior to
certain changes in terms and before the rate applicable to a
consumers account is increased as a penalty. Rules of general
applicability such as the definition of open-end credit, dispute
resolution procedures, and payment processing limitations apply to
all open-end plans, including home-equity lines of credit. Rules
regarding the disclosure of debt cancellation and debt suspension
agreements are revised for both closed-end and open-end credit
transactions. Loans taken against employer-sponsored retirement
plans are exempt from TILA coverage.
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
RegZ.R1286.20090210.omb.doc
RegZ.R1286.20081218.nfrm.pr.pdf
Subpart B - Open-end credit (Initial Disclosures)