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Type: FCA Regulation
PART 617 - BORROWER RIGHTS
Subpart B - Disclosure of Effective Interest Rates


617.7135 What subsequent disclosures must a qualified lender make to a borrower?
(a) Notice of interest rate change.
(1) A qualified lender must provide written notice to a borrower of any change in interest rate on the borrower's existing loan, containing the following information:
(i) The new interest rate on the loan;
(ii) The date on which the new rate is effective; and
(iii) The factors used to adjust the interest rate on the loan.
(2) If the borrower’s interest rate is directly tied to a widely publicized external index, a qualified lender must provide written notice to the borrower of the rate change either:
(i) Within forty-five (45) days after the effective date of the change; or
(ii) As part of the borrower’s first regularly scheduled billing statement affected by the rate change.
(3) If the borrower's interest rate is not directly tied to a widely publicized external index, a qualified lender must send written notice to the borrower of the rate change within ten (10) days after the effective date of the change.
(b) Notice to adjustable rate loan borrowers with interest rates directly tied to a widely publicized external index. A qualified lender must provide the written disclosure required by 617.7130(b)(6) to applicable borrowers who were not previously given the disclosure no later than the qualified lender’s next regularly scheduled correspondence to those borrowers occurring after April 1, 2010.
(c) Notice of increase in stock purchase requirement. If a qualified lender increases the amount of stock (or participation certificates) a borrower must own during the term of a loan, the lender must send a written notice to the borrower at least ten (10) days prior to the effective date of the increase. The notice must state:
(1) The new effective interest rate on the outstanding balance for the remaining term of the borrower's loan;
(2) The date on which the new rate is effective; and
(3) The reason for the increase in the borrower stock (or participation certificates) purchase requirement.

[69 FR 16460, Mar. 30, 2004, as amended by 74 FR 67972, Dec. 22, 2009]

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