The Truth in Lending Act (TILA) and
Regulation Z ensure adequate disclosure of the costs and terms of
credit to consumers. For open-end credit, such as credit cards and
home-equity lines of credit (HELOCs), 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. For closed-end loans, such as mortgage and installment
loans, cost disclosures are required prior to and at consummation.
Special disclosures are required for certain products, such as
reverse mortgages and high cost mortgages with rates and fees above
specified thresholds. TILA and Regulation Z also contain rules
concerning credit advertising. Creditors are required to comply
with Regulation Z’s disclosure and other requirements unless the
transaction is exempt. Regulation Z generally does not apply to
consumer credit transactions that exceed a threshold amount,
adjusted annually for inflation. However, regardless of the amount
of credit extended, Regulation Z applies to (1) consumer credit
secured by real property, (2) consumer credit secured by personal
property used or expected to be used as the principal swelling of
the consumer, and (3) private student loans. On July 21, 2011,
rulemaking authority for TILA was transferred from the Board to the
CFPB under the Dodd-Frank Act. In December 2011, the CFPB published
an interim final rule establishing its own Regulation Z to
implement TILA at 12 C.F.R. part 1026 that substantially duplicated
the Federal Reserve’s Regulation Z. The CFPB has subsequently
amended its Regulation Z to adopt rules required by the Dodd-Frank
Act.
The Board proposes to modify
Reg Z to account for preexisting regulatory requirements that were
not included separately in prior notices and to account for the
requirements of new rules issued during the past three years. A
summary of the changes follows below. First, the Board proposes to
modify Reg Z to account for new required rules issued by the CFPB
to implement the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act). These include: * Combined
closed-end mortgage disclosures under TILA and the Real Estate
Settlement Procedures Act (RESPA), * A requirement that creditors
must run a credit check on loan originators, * Requirements that
creditors verify documents used to determine “qualified mortgage”
status, * Mortgage payoff statement requirements, * Revised and
additional adjustable rate mortgage (ARM) disclosures, * Periodic
statements for closed-end residential mortgages, and * Revised and
additional disclosures for high-cost mortgages under the Home
Ownership Equity Protection Act (HOEPA). Second, the Board proposes
to clarify and add several information collection elements for
regulatory requirements that previously were accounted for as part
of a more general category of information collections or were not
previously included because institutions for whose burden the Board
accounts did not engage in the relevant line of business to a
material degree. These include: * A requirement that creditors of
open-end (not home-secured) credit have policies to comply with
requirements for the timely settlement of estate debts, * A
requirement that creditors of open-end (not home-secured) credit
have policies to comply with requirements to account for a
consumer’s ability to repay a the debt, * Separate disclosures for
open-end (not home-secured) and open-end (home-secured) credit, and
* Reverse mortgage disclosures. Other proposed changes to Reg Z are
non-substantive and intended for clarity.
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_20160527_omb.pdf
Open-End (Not Home-Secured) Credit: Applications and solicitations (Section 1026.60)