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Truth in Lending; Correction

Document Details

Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Final rule; correction.

SUMMARY:

This document corrects certain typographical errors in the regulation and the staff commentary of the final rule published in the Federal Register of April 25, 2011. The final rule amends Regulation Z, which implements the Truth in Lending Act, in order to clarify certain aspects of the rules that implement the Credit Card Accountability Responsibility and Disclosure Act of 2009.

DATES:

Effective Date: October 1, 2011.

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FOR FURTHER INFORMATION CONTACT:

Stephen Shin, Attorney, or Benjamin K. Olson, Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452-3667 or 452-2412; for users of Telecommunications Device for the Deaf (TDD) only, contact (202) 263-4869.

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SUPPLEMENTARY INFORMATION:

The Board published a final rule in the Federal Register of April 25, 2011 (76 FR 22948) (FR Doc. 2011-8843), amending Regulation Z and the staff commentary to the regulation, in order to clarify certain aspects of the rules that implement the Credit Card Accountability Responsibility and Disclosure Act of 2009. As published, the final rule inadvertently omits the revisions to redesignated § 226.58(b)(7) and the revised commentary to § 226.55(b)(6). In addition, the published final rule misprints comment 51(b)(2)-1 and contains other typographical errors.

Accordingly, in the final rule, FR Doc. 2011-8843, published on April 25, 2011, (76 FR 22948) make the following corrections:

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PART 226—[CORRECTED]

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1. On page 23000, in the third column, line 55, correct amendatory instruction 7 to read as follows:

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Section 226.9 is amended by adding paragraph (b)(3)(iii) and by revising paragraphs (c)(2)(i)A), (c)(2)(ii), (c)(2)(iii), (c)(2)(iv)(A)(1), (c)(2)(iv)(B), (c)(2)(iv)(D), (c)(2)(v)(B)(1) through (3), (c)(2)(v)(C), and (c)(2)(v)(D).

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2. On page 23003, in the third column, line 48, correct amendatory instruction 14.B. to read as follows:

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B. Redesignating paragraphs (b)(4) through (7) as paragraphs (b)(5) through (8), and revising redesignated paragraph (b)(7);

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3. On page 23004, in the first column, line 24, in § 226.58, correct paragraph (b) by adding paragraph (b)(7) to read as follows:

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(7) Pricing information. For purposes of this section, “pricing information” means the information listed in § 226.6(b)(2)(i) through (b)(2)(xii). Pricing information does not include temporary or promotional rates and terms or rates and terms that apply only to protected balances.

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Supplement I to Part 226 [Corrected]

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4. On page 23016, in the first column, line 3, italicize the heading “9(c) Change in terms.”

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5. On page 23021, in the third column, line 29, correct paragraph 1. of

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1. Credit line request by joint accountholder aged 21 or older. The requirement under § 226.51(b)(2) that a cosigner, guarantor, or joint accountholder for a credit card account opened pursuant to § 226.51(b)(1)(ii) must agree in writing to assume liability for the increase before a credit line is increased, does not apply if the cosigner, guarantor or joint accountholder who is at least 21 years old initiates the request for the increase.

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6. On page 23034, in the first column, line 24, correct

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55(b)(6) Servicemembers Civil Relief Act exception.

1. Rate, fee, or charge that does not exceed rate, fee, or charge that applied before decrease. When a rate or a fee or charge subject to § 226.55 has been decreased pursuant to 50 U.S.C. app. 527 or a similar federal or state statute or regulation, § 226.55(b)(6) permits the card issuer to increase the rate, fee, or charge once 50 U.S.C. app. 527 or the similar statute or regulation no longer applies. However, § 226.55(b)(6) prohibits the card issuer from applying to any transactions that occurred prior to the decrease a rate, fee, or charge that exceeds the rate, fee, or charge that applied to those transactions prior to the decrease (except to the extent permitted by one of the other exceptions in § 226.55(b)). For example, if a temporary rate applied prior to a decrease in rate pursuant to 50 U.S.C. app. 527 and the temporary rate expired during the period that 50 U.S.C. app. 527 applied to the account, the card issuer may apply an increased rate once 50 U.S.C. app. 527 no longer applies to the extent consistent with § 226.55(b)(1). Similarly, if a variable rate applied prior to a decrease in rate pursuant to 50 U.S.C. app. 527, the card issuer may apply any increase in that variable rate once 50 U.S.C. app. 527 no longer applies to the extent consistent with § 226.55(b)(2).

2. Decreases in rates, fees, and charges to amounts consistent with 50 U.S.C. app. 527 or similar statute or regulation. If a card issuer deceases an annual percentage rate or a fee or charge subject to § 226.55 pursuant to 50 U.S.C. app. 527 or a similar federal or state statute or regulation and if the card issuer also decreases other rates, fees, or charges (such as the rate that applies to new transactions) to amounts that are consistent with 50 U.S.C. app. 527 or a similar federal or state statute or regulation, the card issuer may increase those rates, fees, and charges consistent with § 226.55(b)(6).

3. Example. Assume that on December 31 of year one the annual percentage rate that applies to a $5,000 balance on a credit card account is a variable rate that is determined by adding a margin of 10 percentage points to a publicly-available index that is not under the card issuer's control. The account is also subject to a monthly maintenance fee of $10. On January 1 of year two, the card issuer reduces the rate that applies to the $5,000 balance to a non-variable rate of 6% and ceases to impose the $10 monthly maintenance fee and other fees (including late payment fees) pursuant to 50 U.S.C. app. 527. The card issuer also decreases the rate that applies to new transactions to 6%. During year two, the consumer uses the account for $1,000 in new transactions. On January 1 of year three, 50 U.S.C. app. 527 ceases to apply and the card issuer provides a notice pursuant to § 226.9(c) informing the consumer that on February 15 of year three the variable rate determined using the 10-point margin will apply to any remaining portion of the $5,000 balance and to any remaining portion of the $1,000 balance. The notice also states that the $10 monthly maintenance fee and other fees (including late payment fees) will resume on February 15 of year three. Consistent with § 226.9(c)(2)(iv)(B), the card issuer is not required to provide a right to reject in these Start Printed Page 31222circumstances. On February 15 of year three, § 226.55(b)(6) permits the card issuer to begin accruing interest on any remaining portion of the $5,000 and $1,000 balances at the variable rate determined using the 10-point margin and to resume imposing the $10 monthly maintenance fee and other fees (including late payment fees).

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By order of the Board of Governors of the Federal Reserve System, acting through the Secretary under delegated authority, May 19, 2011.

Jennifer J. Johnson,

Secretary of the Board.

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[FR Doc. 2011-12795 Filed 5-27-11; 8:45 am]

BILLING CODE 6210-01-P