[Federal Register Volume 63, Number 25 (Friday, February 6, 1998)]
[Proposed Rules]
[Page 6112]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2899]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 63, No. 25 / Friday, February 6, 1998 / 
Proposed Rules  

[[Page 6112]]


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FEDERAL RESERVE SYSTEM

12 CFR Part 226

[Regulation Z; Docket No. R-0954]


Truth in Lending

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Request for comments; extension of comment period.

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SUMMARY: The Economic Growth and Regulatory Paperwork Reduction Act of 
1996 directs the Board and the Department of Housing and Urban 
Development (HUD), where possible, to simplify and improve consumer 
disclosures required under the Truth in Lending Act (TILA) and the Real 
Estate Settlement Procedures Act (RESPA) and to provide a single format 
satisfying the requirements of those laws. If legislation is necessary 
to accomplish these goals, the agencies are to submit legislative 
recommendations to the Congress. In December 1996, the agencies 
published for comment an advance notice of proposed rulemaking. After 
consideration of the comments and further review, the Board determined 
that regulatory changes alone would be inadequate to achieve the goals 
of the Congress and that legislative changes are necessary to harmonize 
TILA and RESPA. In April 1997, the Board published a notice to invite 
additional public comments on possible legislative action. In the next 
few months, the Board and HUD will report to the Congress on potential 
legislative changes. In order to obtain additional comments from 
individual consumers, the Board has reopened and extended the public 
comment period.

DATES: Comments must be submitted on or before March 9, 1998.

ADDRESSES: Comments should refer to Docket No. R-0954 and may be mailed 
to William W. Wiles, Secretary, Board of Governors of the Federal 
Reserve System, 20th Street and Constitution Avenue, NW., Washington, 
DC 20551. Comments may also be delivered to Room B-2222 of the Eccles 
Building between 8:45 a.m. and 5:15 p.m. weekdays, or to the guard 
station in the Eccles Building courtyard on 20th Street NW (between 
Constitution Avenue and C Street) at any time. Comments may be 
inspected in Room MP-500 of the Martin Building between 9:00 a.m. and 
5:00 p.m. weekdays, except as provided in Sec. 12 CFR 261.8 of the 
Board's Rules Regarding Availability of Information.

FOR FURTHER INFORMATION CONTACT: Michael L. Hentrel, Natalie E. Taylor, 
Staff Attorneys, or James A. Michaels, Senior Attorney, Division of 
Consumer and Community Affairs, Board of Governors of the Federal 
Reserve System, at (202) 452-3667; for users of Telecommunications 
Device for the Deaf (TDD) only, Diane Jenkins, at (202) 452-3544.

SUPPLEMENTARY INFORMATION: Section 2101 of the Economic Growth and 
Regulatory Paperwork Reduction Act of 1996 (Pub. L. 104-208, 110 Stat. 
3009) directs the Board and HUD to simplify and improve the disclosures 
given in a home mortgage transaction subject to TILA and RESPA, and to 
create a single disclosure that will satisfy the requirements of both 
statutes, if possible. If legislation is necessary to develop a single 
simplified disclosure, the Board and HUD are directed to submit 
legislative recommendations to the Congress. The statutes impose 
numerous requirements and serve various purposes. TILA seeks to promote 
the informed use of consumer credit by requiring standardized 
disclosures about credit terms and costs. The disclosures are intended 
to focus consumers' attention on certain aspects of their transaction 
and to assist them in comparison shopping. TILA establishes additional 
disclosure requirements for home-secured loans, and in some cases 
permits consumers to rescind such loans. RESPA contains both disclosure 
and price-related provisions. It requires that certain disclosures be 
given at various points in most mortgage transactions to ensure that 
consumers receive timely and useful information about the costs 
associated with the transaction. It also prohibits kickbacks and 
referral fees among settlement service providers.
    On December 31, 1996 (61 FR 69055), the Board and HUD jointly 
published for comment an advance notice of proposed rulemaking on the 
issue of simplifying and combining the disclosure requirements of RESPA 
and TILA. The Board and HUD received more than 80 comment letters, 
primarily from creditors and their representatives. After reviewing the 
comments, and upon further analysis in consultation with HUD, the Board 
decided not to propose any changes to Regulation Z. The Board 
determined that harmonizing TILA and RESPA to any significant degree 
required changes that could only come about through legislative action. 
As a result, the Board published a notice inviting additional public 
comment on possible legislative action on April 2, 1997 (62 FR 15624). 
The Board and HUD received more than 160 comment letters from consumers 
and industry representatives.
    The Board is extending the comment period until March 9, 1998, in 
order to obtain views from consumers on matters such as the timing, 
content, and reliability of disclosures; the Board will do so by 
inviting certain first time homebuyers and previous home purchasers to 
participate in focus groups. The comment period is being extended 
primarily for the purpose of conducting these focus group interviews. 
Other members of the public may submit comments during this period, but 
they are encouraged to submit them as soon as possible. This extension 
will not delay the Board in providing its report to the Congress.

    By order of the Secretary of the Board, acting pursuant to 
delegated authority for Board of Governors of the Federal Reserve 
System, January 30, 1998.
William W. Wiles,
Secretary of the Board.
[FR Doc. 98-2899 Filed 2-5-98; 8:45 am]
BILLING CODE 6210-01-P