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Informational Memorandum
Subject:Final Rule Amending Regulation Z (Truth in Lending)
Date of Memorandum:12/18/2000
Expiration Date:
Signed By:Smith, Roland
FCA Contact Person:Holland, Tom
Contact Phone:703-883-4484
List of Attachments:Federal Reserve System 12 CFR Part 226


December 18, 2000

To: The Chief Executive Officer
All Farm Credit System Institutions

From: Roland E. Smith, Director
Office of Examination

Subject: Final Rule Amending Regulation Z (Truth in Lending)

The Board of Governors of the Federal Reserve System has adopted the attached final rule amending Regulation Z (12 CFR Part 226), which implements the Truth in Lending Act. The rule revises the disclosure requirements for credit and charge card solicitations and applications. Although the rule was effective September 27, 2000, compliance is not mandatory until October 1, 2001. The rule also contains clarifications to corresponding sections of the Federal Reserve Board’s Official Staff Commentary to Regulation Z and is available on their website at:

The Truth in Lending Act requires disclosure of the annual percentage rate (APR) and other cost information in direct mail and other applications and solicitations to open credit and charge card accounts. The amendments to Regulation Z are intended to enhance consumers' ability to notice and understand this cost information, which generally must be provided in the form of a table.

Under the final rule, disclosures must be in a readily understandable form and readily noticeable to consumers. The APR disclosed for purchase transactions must be in 18-point type; cash advance and balance transfer APRs must now be included in the table; and any balance transfer fees must be disclosed either in or outside of the table. The rule provides additional guidance on the location and level of detail about the cost information required or permitted in the table.

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 correspond with him on the Internet at e-mail address