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Informational Memorandum
Subject:Revisions to Regulation Z and the Official Staff Commentary
Date of Memorandum:04/29/2004
Expiration Date:
Signed By:Smith, Roland
FCA Contact Person:Holland, Tom
Contact Phone:703-883-4484
List of Attachments:Rules and Regulations


April 29, 2004

To: The Chief Executive Officer
All Farm Credit System Institutions

From: Roland E. Smith, Director
Office of Examination

Subject: Revisions to Regulation Z and the Official Staff Commentary

The Board of Governors of the Federal Reserve System recently issued revisions to Regulation Z, (1/) which implements the Truth in Lending Act (TILA), (2/) and to the official staff commentary that interprets the requirements of the regulation. (3/)

As you are aware, the purpose of TILA is to promote the informed use of consumer credit by providing for disclosures about its terms and cost. TILA requires creditors to disclose the cost of credit as a dollar amount (the finance charge) and as an annual percentage rate. Uniformity in creditors' disclosures is intended to assist consumers in comparison shopping for credit. TILA also requires additional disclosures for loans secured by consumers' homes and permits consumers to rescind certain transactions that involve their principal dwelling. In addition, TILA regulates certain practices of creditors.

Regulation Z was revised to add an interpretive rule of construction providing that where the word "amount" is used in the regulation to describe disclosure requirements, it refers to a numerical amount. The official staff commentary was revised to provide guidance on consumers' exercise of the right to rescind certain home-secured loans. In addition, several technical revisions to the official staff commentary were made.

The revisions became effective on April 1, 2004, and compliance is mandatory beginning October 1, 2004. The revisions can be found in the Federal Register at 69 FR 16769 (March 31, 2004), a copy of which is attached.

If you have any questions about this memorandum, please call Thomas J. Holland, Director, Special Examination and Supervision Division, Office of Examination, at (703) 883-4483, or write to him on the Internet at e-mail address


FR 16769.pdf

12 CFR Part 226
15 U.S.C. 1601 et seq.
12 CFR Part 226 (Supp. I).