Lending Archive

In a press release, the Federal Trade Commission has announced that two payday loan lead generators have agreed to settle charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires. The settlements require the respondents to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act (TILA) and Regulation Z.

On June 14, 2007, the Federal Reserve Board published proposed amendments to Regulation Z, which implements the Truth in Lending Act (TILA), and to the staff commentary to the regulation, following a comprehensive review of TILA's rules for open-end (revolving) credit that is not home-secured. The proposed revisions addressed disclosures provided with credit card applications and solicitations, at account-opening, on periodic statements, when terms are changed on an account, and in advertisements.

The Board is seeking comment on a limited number of additional revisions to the regulation and commentary. New proposed amendments address creditors' responsibilities to establish reasonable instructions for receiving timely payments and when a due date falls on a weekend or holiday. Creditors' responsibilities when investigating a claim of unauthorized transactions or an allegation of a billing error are also addressed. Advertisements for deferred interest plans would be required to provide additional information about how interest could be imposed.

Comments submitted to the Board in response to the June 2007 proposed revisions remain under consideration by the Board and need not be submitted a second time.

Comments on this additional proposal must be received on or before July 18, 2008. 

The FRB, OTS, and NCUA (collectively, the Agencies) are proposing to exercise their authority under section 5(a) of the Federal Trade Commission Act to prohibit unfair or deceptive acts or practices. The proposed rule would prohibit institutions from engaging in certain acts or practices in connection with consumer credit cards accounts and overdraft services for deposit accounts. This proposal evolved from the Board's June 2007 Notice of Proposed Rule under the Truth in Lending Act and OTS's August 2007 Advance Notice of Proposed Rulemaking under the Federal Trade Commission Act. The proposed rule relates to other Board proposals under the Truth in Lending Act and the Truth in Savings Act, which are published elsewhere in the May 20, 2008 Federal Register.

Comments on this must be received on or before August 4, 2008.

The Federal Reserve Board has proposed rules to prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.

According to the FRB’s press release, the rules, proposed for public comment under the Federal Trade Commission Act (FTC Act), also would forbid banks from imposing interest charges using the "two-cycle" billing method, would require that consumers receive a reasonable amount of time to make their credit card payments, and would prohibit the use of payment allocation methods that unfairly maximize interest charges. They also include protections for consumers that use overdraft services offered by their bank.

The proposed changes to the Board’s Regulation AA (Unfair or Deceptive Acts or Practices) would be complemented by separate proposals that the Board is issuing under the Truth in Lending Act (Regulation Z) and the Truth in Savings Act (Regulation DD).

In a press release, the Federal Trade Commission has announced that it has issued its annual report to the Federal Reserve Board on FTC enforcement activities in 2007 related to the Truth in Lending Act, Consumer Leasing Act, Equal Credit Opportunity Act, and Electronic Fund Transfer Act.

The Federal Reserve Board has announced the adoption of amendments to five consumer financial services and fair lending regulations (Regulations B, E, M, Z, and DD) to clarify the requirements for providing consumer disclosures in electronic form.

The United States Court of Appeals for the Seventh Circuit, has issued a ruling in the case of Hamm verses Ameriquest Mortgage Company.  In this case, the court ruled that a financial institution must specifically state, in its Truth in Lending disclosures, the payment period for a borrower's loan.

Sandra F. Braunstein, Director, Division of Consumer and Community Affairs recently spoke before the Subcommittee on Oversight and Investigations, Committee on Financial Services, U.S. House.  In her speech, Braunstein discussed whether the collection of data by creditors on credit applicants' personal characteristics (such as race, ethnicity, and sex) for non-mortgage loans is appropriate, and if so, how this might best be accomplished.

In a press release, the Federal Trade Commission has announced that it has issued its annual report to the Federal Reserve Board on FTC enforcement activities in 2007 related to the Truth in Lending Act, Consumer Leasing Act, Equal Credit Opportunity Act, and Electronic Fund Transfer Act.

The Federal Reserve Board has announced the adoption of amendments to five consumer financial services and fair lending regulations (Regulations B, E, M, Z, and DD) to clarify the requirements for providing consumer disclosures in electronic form.

The Board is publishing amendments to Regulation B (Equal Credit Opportunity Act) to update the address where questions should be directed concerning creditors for which the Federal Reserve System administers compliance with the regulation.

Effective Date: October 29, 2007. Compliance is optional until October 1, 2008.

In a press release, the OCC, FRB, FDIC and OTS have announced the availability of the 2008 list of distressed or underserved nonmetropolitan middle-income geographies in which bank revitalization or stabilization activities will receive Community Reinvestment Act (CRA) consideration as “community development.” The 2008 list incorporates a one-year lag period for geographies that were designated as distressed or underserved in 2007, but were not designated as such in the 2008 release. Geographies subject to the one-year lag period are eligible to receive consideration for community development activities for 12 months following publication of the 2008 list.

Register today for the CRA & Fair Lending Colloquium to learn more on regulatory trends and current events in CRA, HMDA and fair lending.

In a press release, Comptroller of the Currency John C. Dugan has called for an amendment to the Community Reinvestment Act regulation to provide CRA consideration for community development investments in middle-income communities that are distressed as a result of mortgage foreclosures and related economic factors affecting the area.

The federal bank regulatory agencies announced the annual adjustment to the asset-size thresholds used to define "small bank," "small savings association," "intermediate small bank," and "intermediate small savings association" under the Community Reinvestment Act (CRA) regulations. The annual adjustments for banks are required by the 2005 CRA regulatory amendments and for savings associations by the Office of Thrift Supervision's 2007 CRA regulatory amendments.

The federal bank and thrift regulatory agencies have requested public comment on a series of new and revised interagency questions and answers pertaining to the Community Reinvestment Act (CRA). The Interagency Questions and Answers Regarding Community Reinvestment were first published in 1996 under the auspices of the Federal Financial Institutions Examination Council (FFIEC).

In a press release, the Federal Trade Commission has announced that it has issued its annual report to the Federal Reserve Board on FTC enforcement activities in 2007 related to the Truth in Lending Act, Consumer Leasing Act, Equal Credit Opportunity Act, and Electronic Fund Transfer Act.

The Federal Reserve Board has announced the adoption of amendments to five consumer financial services and fair lending regulations (Regulations B, E, M, Z, and DD) to clarify the requirements for providing consumer disclosures in electronic form.

In a speech to the Independent Bankers Association of Texas, Comptroller of the Currency John C. Dugan said community banks engaged in the commercial real estate lending  need to assess the strength of borrowers and identify problem credits at an early stage. Those community banks with significant concentrations of commercial real estate need to be especially prepared according to Dugan.

The Federal Reserve Board and the Federal Trade Commission have published for comment proposed rules to implement the risk-based pricing provisions in section 311 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which amends the Fair Credit Reporting Act (FCRA). The proposed rules generally require a creditor to provide a risk-based pricing notice to a consumer when the creditor uses a consumer report to grant or extend credit to the consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that creditor.

Comments this proposal must be received on or before August 18, 2008.

In a press release, the Federal Trade Commission has announced that two payday loan lead generators have agreed to settle charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires. The settlements require the respondents to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act (TILA) and Regulation Z.

The Federal Reserve Board has proposed rules to prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.

According to the FRB’s press release, the rules, proposed for public comment under the Federal Trade Commission Act (FTC Act), also would forbid banks from imposing interest charges using the "two-cycle" billing method, would require that consumers receive a reasonable amount of time to make their credit card payments, and would prohibit the use of payment allocation methods that unfairly maximize interest charges. They also include protections for consumers that use overdraft services offered by their bank.

The proposed changes to the Board’s Regulation AA (Unfair or Deceptive Acts or Practices) would be complemented by separate proposals that the Board is issuing under the Truth in Lending Act (Regulation Z) and the Truth in Savings Act (Regulation DD).

In a meeting with compliance examiners, the Comptroller of the Currency John C. Dugan stated that the OCC must continue to focus on consumer compliance while it deals with the credit quality problems that are now confronting the industry.  According to Dugan, "We simply cannot take our eyes off compliance while we address safety and soundness.  We know how to deal with credit issues, and we will work our way through these very difficult problems. What I don't want, though, is to finish dealing with the industry’s safety and soundness issues only to find that we've allowed significant compliance problems to develop in their place."

In a press release, the Federal Trade Commission has announced that two payday loan lead generators have agreed to settle charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires. The settlements require the respondents to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act (TILA) and Regulation Z.

The FDIC has issued enforcement actions against CompuCredit Corporation, Atlanta, Georgia, and two FDIC-supervised banks for allegedly marketing subprime credit cards in violation of the Federal Trade Commission Act (FTC Act) The FDIC settled with a third bank also involved with CompuCredit.

The enforcement actions seek orders that would correct the FTC Act violations, and provide restitution to consumers in the form of credits for certain fees and charges arising from the deceptive marketing practices. It is estimated that such credits will exceed $200 million. The restitution is being sought against CompuCredit, First Bank of Delaware, Wilmington, Delaware, and First Bank & Trust, Brookings, South Dakota. The FDIC is also seeking civil money penalties (CMPs) of $6.2 million against CompuCredit, and a total of $431,000 against First Bank of Delaware and First Bank & Trust.

FDIC Press Release | FTC Press Release

The Federal Reserve Board and the Federal Trade Commission have published for comment proposed rules to implement the risk-based pricing provisions in section 311 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which amends the Fair Credit Reporting Act (FCRA). The proposed rules generally require a creditor to provide a risk-based pricing notice to a consumer when the creditor uses a consumer report to grant or extend credit to the consumer on material terms that are materially less favorable than the most favorable terms available to a substantial proportion of consumers from or through that creditor.

Comments this proposal must be received on or before August 18, 2008.

The FRB, OTS, and NCUA (collectively, the Agencies) are proposing to exercise their authority under section 5(a) of the Federal Trade Commission Act to prohibit unfair or deceptive acts or practices. The proposed rule would prohibit institutions from engaging in certain acts or practices in connection with consumer credit cards accounts and overdraft services for deposit accounts. This proposal evolved from the Board's June 2007 Notice of Proposed Rule under the Truth in Lending Act and OTS's August 2007 Advance Notice of Proposed Rulemaking under the Federal Trade Commission Act. The proposed rule relates to other Board proposals under the Truth in Lending Act and the Truth in Savings Act, which are published elsewhere in the May 20, 2008 Federal Register.

Comments on this must be received on or before August 4, 2008.

The Federal Reserve Board and the Federal Trade Commission have announced proposed regulations that generally would require a creditor to provide a consumer with a risk-based pricing notice when, based in whole or in part on the consumer's credit report, the creditor offers or provides credit to the consumer on terms less favorable than the terms it offers or provides to other consumers.

The proposal will soon be published in the Federal Register and the comment period will end 90 days thereafter.

The Federal Reserve Board has proposed rules to prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.

According to the FRB’s press release, the rules, proposed for public comment under the Federal Trade Commission Act (FTC Act), also would forbid banks from imposing interest charges using the "two-cycle" billing method, would require that consumers receive a reasonable amount of time to make their credit card payments, and would prohibit the use of payment allocation methods that unfairly maximize interest charges. They also include protections for consumers that use overdraft services offered by their bank.

The proposed changes to the Board’s Regulation AA (Unfair or Deceptive Acts or Practices) would be complemented by separate proposals that the Board is issuing under the Truth in Lending Act (Regulation Z) and the Truth in Savings Act (Regulation DD).

The U.S. Treasury Department has  released its Blueprint for an improved financial regulatory structure.  This structure is designed to  strengthen consumer protections, improve tools for market stability and enhance financial innovation. Treasury's Blueprint for a Modernized Financial Regulatory Structure also presents a series of short-, intermediate- and long-term recommendations for reform of the U.S. regulatory structure.

Three payday lenders have agreed to settle Federal Trade Commission charges that their Internet advertising stated the cost of loans without disclosing annual percentage rate information that federal law requires.

The Federal Deposit Insurance Corporation (FDIC) is accepting bankers' applications to participate in its Affordable and Responsible Consumer Credit pilot program, which will begin in January 2008. Between 20 and 40 participants will be selected from interested institutions based on information describing their small-dollar loan programs. Applications will be accepted through November 20, 2007.

The OCC, Board, FDIC, and OTS have adopted as final the interim rules issued on April 10, 2007, that implemented section 605 of the Financial Services Regulatory Relief Act of 2006 (FSRRA) and related legislation. These Examination Amendments permit insured depository institutions that have up to $500 million in total assets, and that meet certain other criteria, to qualify for an 18-month (rather than 12-month) on-site examination cycle.

The Amendments are effective on September 25, 2007, the Interim Rules published on April 10, 2007 are adopted as final without change.

The OCC has released two publications that provide the latest OCC interpretations and decisions authorizing activities for national banks and their operating subsidiaries: Significant Legal, Licensing, and Community Development Precedents for National Banks: 2006 (annual) and Activities Permissible for a National Bank, Cumulative: 2006.

In a press release, Comptroller of the Currency John C. Dugan said that consumers should be given the opportunity to “opt out” of certain credit card rate increases and be given the alternative of paying off the card balance at the old rate. Referencing a speech to the Financial Services Roundtable, Mr. Dugan noted that the Federal Reserve is now considering a change to its Truth-in-Lending rules that would generally prohibit rate increases unless the cardholder receives 45 days prior notice. The notice would allow the consumer to avoid the rate increase by paying off the card balance or moving it to another card.

The Federal Financial Institutions Examination Council (FFIEC) has issued updated guidance for examiners, financial institutions, and technology service providers to identify business continuity risks and evaluate controls and risk management practices for effective business continuity planning. The guidance is an update to the “Business Continuity Planning Booklet,” which was issued in March 2003.

In an effort to further expedite the application and decision-making process, the OCC reviewed its current requirements for notarization or bank seals that are required in connection with the filing of applications with the OCC. Following a review of statutes and regulations applicable to all corporate applications, documents, and notices, the OCC issued Bulletin OCC 2008-2 which removes all notary and seal requirements not supported by federal banking code or regulation.

The Federal Financial Institutions Examination Council (FFIEC) has issued guidance for financial institutions in identifying the continuity planning that should be in place to minimize the potential adverse effects of a pandemic. This guidance expands upon the contents of the Interagency Advisory on Influenza Pandemic Preparedness issued in March 2006.