CUNA Regulatory Comment Call


May 23, 2000

Fed Proposal Revises Disclosure Requirements for Credit and Charge Card Solicitations

(MAJOR RULE)

EXECUTIVE SUMMARY

Comments on the proposal are due by July 18, 2000. Please submit your comments to CUNA by July 12, 2000. Please feel free to fax your responses to CUNA at 202-371-8240; e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.com or to Assistant General Counsel Jeffrey Bloch at jbloch@cuna.com; or mail them to Mary or Jeff in c/o CUNA's Regulatory Advocacy Department, 805 15th Street, NW, Suite 300, Washington, DC 20005. You may also contact us if you would like a copy of the proposed rule or you may access it on the Internet at the following address: http://www.bog.frb.fed.us/boarddocs/press/BoardActs/2000/20000518/default.htm

BACKGROUND

TILA is intended 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 and as an APR in a uniform manner. This uniformity is intended to assist consumers in comparison shopping for credit. Regulation Z implements TILA, which contains official staff commentary that interprets the regulation and provides guidance in applying the regulation to specific transactions.

The Fair Credit and Charge Card Disclosure Act of 1988 (Act) amended TILA by requiring that consumers receive important cost information in the form of a table so that they can find the information easily and use it for comparison purposes. This table is commonly referred to as the "Schumer box," named after the law's sponsor, Senator Charles Schumer (D-NY). The table is required to include the APR for purchases, the annual fee, transaction fees, minimum finance charge per billing cycle, the method for calculating finance charges, the grace period, cash advance fees, and fees for late payment or for exceeding the credit limit. These disclosures are required to be "clearly and conspicuously" displayed.

BRIEF DESCRIPTION OF THE PROPOSAL

The proposed rule is intended to further carry out the purposes of the Act and promote more effective disclosures of the costs and terms in credit and charge card solicitations and applications. The proposed rule also revises the model form and includes a new sample form to incorporate the proposed changes. The following are the significant changes that are covered under the proposed rule:

QUESTIONS TO CONSIDER REGARDING THE FED'S REGULATION Z PROPOSAL

Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com