2010-31824. Truth in Lending

AGENCY:

Board of Governors of the Federal Reserve System.

ACTION:

Interim final rule, correction.

SUMMARY:

This document corrects certain cross-references and typographical errors in the regulation, staff commentary to the regulation, and the supplementary information of the interim final rule published in the Federal Register of October 28, 2010 (75 FR 66554) (Docket No. R-1394). A paragraph describing revisions to staff comment 1(d)(5)-1 is also added to the section-by-section analysis of the supplementary information. The interim final rule amends Regulation Z, which implements the Truth in Lending Act, in order to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

DATES:

This correction is effective December 27, 2010.

Compliance Date: To allow time for any necessary operational changes, compliance with the interim final rule as corrected is optional until April 1, 2011.

Comments: Comments must be received on or before December 27, 2010.

FOR FURTHER INFORMATION CONTACT:

Jamie Z. Goodson, Attorney, or Lorna M. Neill, Senior Attorney, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at [phone] or 452-2412; for users of Telecommunications Device for the Deaf (TDD) only, contact [phone].

SUPPLEMENTARY INFORMATION:

The Board published an interim final rule in the Federal Register on October 28, 2010 (75 FR 66554) (Docket No. R-1394), amending Regulation Z (Truth in Lending) to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Public Law 111-208, 124 Stat. 1376 (Jul. 21, 2010).

In the interim final rule, Docket No. R-1394, published on October 28, 2010, (75 FR 66554) make the following corrections:

1. On page 66555, in the first column, line 24, correct “April 1, 2010” to read “April 1, 2011”.

2. On page 66556, in the third column, immediately under the heading “IV. Section-by-Section Analysis,” add the following:

“Section 226.1 Authority, Purpose, Coverage, Organization, Enforcement and Liability

Section 226.1(d) Organization

Section 226.1(d) describes how Regulation Z is organized. Section 226.1(d)(5) describes Subpart E of Regulation Z, which this interim final rule amends by adding new § 226.42, “Valuation Independence.” The interim final rule also revises comment 1(d)(5)-1 to add a new subpart 1(d)(5)-1.ii, stating that compliance with the interim final rule is mandatory on April 1, 2011, for open- and closed-end extensions of consumer credit secured by the consumer's principal dwelling. The revised comment also states that § 226.36(b), which is substantially similar to § 226.42(c) and (e), is removed effective April 1, 2011. The comment explains that applications for closed-end extensions of credit secured by the consumer's principal dwelling that are received by creditors before April 1, 2011, are subject to § 226.36(b) regardless of the date on which the transaction is consummated. However, parties subject to § 226.36(b) may, at their option, choose to comply with § 226.42 instead of § 226.36(b), for applications received before April 1, 2011. To illustrate, the comment explains that an application for a closed-end extension of credit secured by the consumer's principal dwelling received by a creditor on March 20, 2011, and consummated on May 1, 2011, is subject to § 226.36(b), but the creditor may choose to comply with § 226.42 instead. The comment further explains that, for an application for open- or closed-end credit secured by the consumer's principal dwelling that is received on or after April 1, 2011, the creditor must comply with § 226.42.”

3. On page 66558, in the first column, line 50, correct “Section 226.42(b)(5)” to read “Section 226.42(b)(3)”.

3a. On page 66558, in the second column, line 4, correct “§ 226.42(b)(5)” to read “§ 226.42(b)(3)”.

4. On page 66559, in the third column, line 41, correct “comment 42(c)(1)(1)-3” to read “comment 42(c)(1)-3”.

5. On page 66570, in the first column, lines 1-3, remove “companies that publicly hold themselves out as”.

6. On page 66574, in the second column, lines 1-2, correct “on rates” to read “on information about rates”.

7. On page 66575, in the third column, line 39, correct “comment 42(g)-6” to read “comment 42(g)(1)-6.”

8. On page 66576, in the second column, line 34, correct “§ 226.42(b)(2)” to read “§ 226.42(b)(1)”.

9. On page 66578, in the second column, line 23, correct “18,749,687” to read “75,894”.

10. On page 66580, in the second column, revise the List of Subjects under 12 CFR Part 226 to read as follows: “Advertising, Consumer protection, Federal Reserve System, Mortgages, Reporting and recordkeeping, Truth in Lending”.

Authority Citation for Part 226 [Corrected]

11. On page 66580, in the second column, under the authority citation, correct the reference to “124 Stat. 1376, 2188” to read “124 Stat. 1376, 2187”.

§ 226.42 [Corrected]

12. On page 66581, in the third column, line 1, in § 226.42(d)(3)(i), correct “based the value” to read “based on the value”.

13. On page 66582, in the first column, line 29, in § 226.42(f)(2)(i) introductory text, correct “a creditor shall” to read “a creditor or its agents shall”.

Supplement I to Part 226 [Corrected]

14. On page 66583, in the first column, line 57, in paragraph 1(d)(5)-1.ii, correct “(ii)” to read “ii.”.

15. On page 66583, in the first column, line 63, in paragraph 1(d)(5)-1.ii, correct “§ 226.42(b) and (e)” to read “§ 226.42(c) and (e).”

16. On page 66583, in the third column, lines 50-51, in paragraph 42(c)(1)-3, correct “See comment 42(b)(5)-1.” to read “See comment 42(b)(3)-1.”

17. On page 66584, in the first column, line 7, in paragraph 42(c)(1)-4, correct “exceed” to read “exceeds”.

18. On page 66584, in the third column, lines 13-14, in paragraph 42(d)(2)(ii)-1, correct “(as defined in paragraph (d)(4)(ii) and comment 42(d)(4)(ii)-1)” to read “(as defined in paragraph (d)(5)(i) and comment 42(d)(5)(i)-1)”.

19. On page 66585, in the first column, lines 1 and 3, in paragraph 42(d)(3)-1 (continued from previous page), correct “paragraph (d)(2)” to read “paragraph (d)(3)”.

20. On page 66585, in the second column, lines 35-36 and line 37, in paragraph 42(d)(4)(ii)-1, correct “paragraph (d)(4)(i)” to read “paragraph (d)(4)(ii)”.

21. On page 66585, in the second column, line 46, in paragraph 42(d)(5)(i)-1, correct “paragraphs (d)(3) and (d)(4)(ii)” to read “paragraphs (d)(2) and (d)(4)(i)”.

22. On page 66587, in the first column, lines 22-26, in paragraph 42(g)(1)-1, correct “Uniform Standards of Professional Appraisal Practice established by the Appraisal Standards Board of the Appraisal Foundation (as defined in 12 U.S.C. 3350(9) (USPAP)” to read “Uniform Standards of Professional Appraisal Practice (USPAP) established by the Appraisal Standards Board of the Appraisal Foundation (as defined in 12 U.S.C. 3350(9))”.

23. On page 66587, in the second column, line 31, in paragraph 42(g)(1)-4, add “and” before “other persons that provide `settlement services' ”.

By order of the Board of Governors of the Federal Reserve System, acting through the Secretary under delegated authority, December 14, 2010.

Robert deV. Frierson,

Deputy Secretary of the Board.