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Circular Letters

Circular Letter 5670

October 18, 2005

To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Chief Executive Officer and Chief Compliance Officer

Subject: Regulation Z: Truth in Lending; Request for Comments and Extension of Comment Period

Summary:

The Board of Governors of the Federal Reserve System has issued for public comment a second advance notice of proposed rulemaking (ANPR) concerning the open-end (revolving) credit rules of the Board’s Regulation Z, which implements the Truth in Lending Act (TILA). The second ANPR solicits public comments on how the Board should implement amendments to TILA made by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Bankruptcy Act). The amendments principally deal with open-end credit accounts and require new disclosures on periodic statements and on credit card applications and solicitations.

The Board periodically reviews each of its regulations to update them, if necessary. In December 2004, the Board published an initial ANPR to commence a comprehensive review of the open-end credit rules and to solicit comment on a variety of issues relating to the format of open-end credit disclosures, the content of disclosures, and the substantive protections provided under the regulation. The comment period closed in March 2005.

In April 2005, the Bankruptcy Act was enacted, which contains several amendments to TILA, including provisions requiring new disclosures for open-end credit accounts. The Board plans to implement the amendments as part of its review of Regulation Z and is publishing this second ANPR to reopen and extend the public comment period. Combining the two rulemakings will allow the Board to coordinate the changes to the TILA disclosures and should impose less regulatory burden on creditors.

The Federal Register External Links notice, published October 17, 2005.

Date: Comments must be received on or before December 16, 2005.

For Further Information Contact:

Krista P. DeLargy, Senior Attorney, Jane E. Ahrens, Senior Counsel, or Elizabeth A. Eurgubian, Attorney, 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.