58672 Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Notices 

1. AGUIRRE GALINDO, Manuel, c/o 

COMPLEJO TURISTICO OASIS S.A. DE 

C.V., Playas de Rosarito, Baja California, 

Mexico; c/o INMOBILIARIA ESPARTA 

S.A. DE C.V., Tijuana, Baja California, 

Mexico; DOB 02 Nov 1950; POB 

Tijuana, Baja California, Mexico; R.F.C. 

# AUGM–501102–PM3 (Mexico) 

(individual) 

2. GALINDO LEYVA, Esperanza, c/o 

COMPLEJO TURISTICO OASIS, S.A. de 

C.V., Playas de Rosarito, Rosarito, Baja 

California, Mexico; 536 Huerto Place, 

Chula Vista, CA 91910; 950 Norella 

Street, Chula Vista, CA 91910; c/o 

PLAYA MAR S.A. DE C.V., Tijuana, 

Baja California, Mexico; c/o 

INMOBILIARIA LA PROVINCIA S.A. 

DE C.V., Tijuana, Baja California, 

Mexico; DOB 16 Aug 1920; POB San 

Ignacio, Sinaloa, Mexico; Passport 

99020017901 (Mexico); R.F.C. # GALE–

200816–6IA (Mexico); alt. R.F.C. # 

GALE–241004–61A (Mexico) 

(individual) [SDNTK] 

Dated: September 28, 2006. 

Adam J. Szubin, 

Director, Office of Foreign Assets Control. 

[FR Doc. E6–16424 Filed 10–3–06; 8:45 am] 

BILLING CODE 4811–37–P 

DEPARTMENT OF THE TREASURY 

Office of the Comptroller of the 

Currency 

[Docket No. 06–12] 

BOARD OF GOVERNORS OF THE 

FEDERAL RESERVE SYSTEM 

[Docket No. OP–1267] 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

DEPARTMENT OF THE TREASURY 

Office of Thrift Supervision 

[No. 2006–36] 

NATIONAL CREDIT UNION 

ADMINISTRATION 

Proposed Illustrations of Consumer 

Information for Nontraditional 

Mortgage Products 

AGENCIES: Office of the Comptroller of 

the Currency, Treasury (OCC); Board of 

Governors of the Federal Reserve 

System (Board); Federal Deposit 

Insurance Corporation (FDIC); Office of 

Thrift Supervision, Treasury (OTS); and 

National Credit Union Administration 

(NCUA). 

ACTION: Notice of proposed illustrations 

of consumer information with request 

for comment. 

SUMMARY: The OCC, Board, FDIC, OTS, 

and NCUA (the Agencies), request 

comment on these Proposed 

Illustrations of Consumer Information 

for Nontraditional Mortgage Products. 

The illustrations are intended to assist 

institutions in implementing the 

consumer protection portion of the 

Interagency Guidance on Nontraditional 

Mortgage Product Risks (Interagency 

Guidance), which is being published 

simultaneously with this notice. The 

illustrations are not intended as model 

forms, and institutions will not be 

required to use them. Rather, they are 

provided at the request of commenters 

to the Interagency Guidance to illustrate 

the type of information that the 

Interagency Guidance contemplates. 

DATES: Comments must be submitted on 

or before December 4, 2006. 

ADDRESSES: The Agencies will jointly 

review all of the comments submitted. 

Therefore, interested parties may send 

comments to any of the Agencies and 

need not send comments (or copies) to 

all of the Agencies. Please consider 

submitting your comments by e-mail or 

fax since paper mail in the Washington 

area and at the Agencies is subject to 

delay. Interested parties are invited to 

submit comments to: 

OCC: You should include ‘‘OCC’’ and 

Docket Number 06–12 in your comment. 

You may submit your comment by any 

of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• OCC Web site: http:// 

www.occ.treas.gov. Click on ‘‘Contact 

the OCC,’’ scroll down and click on 

‘‘Comments on Proposed Regulations.’’

• E–Mail Address: 

regs.comments@occ.treas.gov. 

• Fax: (202) 874–4448. 

• Mail: Office of the Comptroller of 

the Currency, 250 E Street, SW., Mail 

Stop 1–5, Washington, DC 20219. 

• Hand Delivery/Courier: 250 E 

Street, SW., Attn: Public Information 

Room, Mail Stop 1–5, Washington, DC 

20219. 

Instructions: All submissions received 

must include the agency name (OCC) 

and docket number for this notice. In 

general, the OCC will enter all 

comments received into the docket 

without change, including any business 

or personal information that you 

provide. 

You may review comments and other 

related materials by any of the following 

methods: 

• Viewing Comments Personally: You 

may personally inspect and photocopy 

comments at the OCC’s Public 

Information Room, 250 E Street, SW., 

Washington, DC. You can make an 

appointment to inspect comments by 

calling (202) 874–5043. 

• Viewing Comments Electronically: 

You may request that we send you an 

electronic copy of comments via e-mail 

or mail you a CD–ROM containing 

electronic copies by contacting the OCC 

at regs.comments@occ.treas.gov. 

• Docket Information: You may also 

request available background 

documents and project summaries using 

the methods described above. 

Board: You may submit comments, 

identified by Docket No. OP–1267, by 

any of the following methods: 

• Agency Web site: http:// 

www.federalreserve.gov. Follow the 

instructions for submitting comments at 

http://www.federalreserve.gov/ 

generalinfo/foia/ProposedRegs.cfm. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail: 

regs.comments@federalreserve.gov. 

Include the docket number in the 

subject line of the message. 

• Fax: 202/452–3819 or 202/452–

3102. 

• Mail: Jennifer J. Johnson, Secretary, 

Board of Governors of the Federal 

Reserve System, 20th Street and 

Constitution Avenue, NW., Washington, 

DC 20551. 

All public comments are available 

from the Board’s Web site at 

www.federalreserve.gov/generalinfo/ 

foia/ProposedRegs.cfm as submitted, 

unless modified for technical reasons. 

Accordingly, your comments will not be 

edited to remove any identifying or 

contact information. Public comments 

may also be viewed in electronic or 

paper form in Room MP–500 of the 

Board’s Martin Building (20th and C 

Streets, NW.) between 9 a.m. and 5 p.m. 

on weekdays. 

FDIC: You may submit comments by 

any of the following methods: 

• Agency Web site: http:// 

www.fdic.gov/regulations/laws/federal/ 

propose.html. Follow the instructions 

for submitting comments on the Agency 

Web site. 

• E-Mail: Comments@FDIC.gov. 

• Mail: Robert E. Feldman, Executive 

Secretary, Attention: Comments, Federal 

Deposit Insurance Corporation, 550 17th 

Street, NW., Washington, DC 20429. 

• Hand Delivery/Courier: Guard 

station at the rear of the 550 17th Street 

Building (located on F Street) on 

business days between 7 a.m. and 5 p.m. 


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Instructions: All submissions received 

must include the agency name. All 

comments received will be posted 

without change to http://www.fdic.gov/ 

regulations/laws/federal/propose.html 

including any personal information 

provided. 

OTS: You may submit comments, 

identified by docket number 2006–36, 

by any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• E-mail address: 

regs.comments@ots.treas.gov. Please 

include docket number 2006–36 in the 

subject line of the message and include 

your name and telephone number in the 

message. 

• Fax: (202) 906–6518. 

• Mail: Regulation Comments, Chief 

Counsel’s Office, Office of Thrift 

Supervision, 1700 G Street, NW., 

Washington, DC 20552, Attention: No. 

2006–36. 

• Hand Delivery/Courier: Guard’s 

Desk, East Lobby Entrance, 1700 G 

Street, NW., from 9 a.m. to 4 p.m. on 

business days. Address envelope as 

follows: Attention: Regulation 

Comments, Chief Counsel’s Office, 

Attention: No. 2006–36. 

Instructions: All submissions received 

must include the agency name and 

docket number for this proposed 

Guidance. All comments received will 

be posted without change to the OTS 

Internet Site at http://www.ots.treas.gov/ 

pagehtml.cfm?catNumber=67&an=1, 

including any personal information 

provided. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http:// 

www.ots.treas.gov/ 

pagehtml.cfm?catNumber=67&an=1. In 

addition, you may inspect comments at 

the OTS’s Public Reading Room, 1700 G 

Street, NW., by appointment. To make 

an appointment for access, call (202) 

906–5922, send an e-mail to 

public.info@ots.treas.gov, or send a 

facsimile transmission to (202) 906–

7755. (Prior notice identifying the 

materials you will be requesting will 

assist us in serving you.) We schedule 

appointments on business days between 

10 a.m. and 4 p.m. In most cases, 

appointments will be available the next 

business day following the date we 

receive a request. 

NCUA: You may submit comments by 

any of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• NCUA Web site: http:// 

www.ncua.gov/ 

RegulationsOpinionsLaws/ 

proposed_regs/proposed_regs.html. 

Follow the instructions for submitting 

comments. 

• E-mail: Address to 

regcomments@ncua.gov. Include ‘‘[Your 

name] Comments on’’ in the e-mail 

subject line. 

• Fax: (703) 518–6319. Use the 

subject line described above for e-mail. 

• Mail: Address to Mary Rupp, 

Secretary of the Board, National Credit 

Union Administration, 1775 Duke 

Street, Alexandria, Virginia 22314–

3428. 

• Hand Delivery/Courier: Same as 

mail address. 

FOR FURTHER INFORMATION CONTACT: 

OCC: Michael S. Bylsma, Director, 

Stephen Van Meter, Assistant Director, 

or Kathryn D. Ray, Special Counsel, 

Community and Consumer Law 

Division, (202) 874–5750. 

Board: Kathleen C. Ryan, Counsel, 

Division of Consumer and Community 

Affairs, (202) 452–3667; or Andrew 

Miller, Counsel, Legal Division, (202) 

452–3428. For users of 

Telecommunications Device for the Deaf 

(‘‘TDD’’) only, contact (202) 263–4869. 

FDIC: April Breslaw, Acting Associate 

Director, Compliance Policy & Exam 

Support Branch, (202) 898–6609, 

Division of Supervision and Consumer 

Protection; or Richard Foley, Counsel, 

(202) 898–3784, Legal Division. 

OTS: Montrice G. Yakimov, Assistant 

Managing Director, Compliance and 

Consumer Protection Division, (202) 

906–6173; or Glenn Gimble, Senior 

Project Manager, Compliance and 

Consumer Protection Division, (202) 

906–7158. 

NCUA: Cory Phariss, Program Officer, 

Examination and Insurance, (703) 518–

6618. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On December 29, 2005, the Agencies 

published for comment proposed 

Interagency Guidance on Nontraditional 

Mortgage Products, 70 FR 77249 (Dec. 

29, 2005). The consumer protection 

section of the proposed guidance set 

forth recommended practices to ensure 

that consumers have clear and balanced 

information about nontraditional 

mortgages prior to making a mortgage 

product choice, such as when lenders 

provide promotional materials about 

nontraditional mortgages or during faceto-face meetings when consumers are 

shopping for a mortgage. Additionally, 

the proposed guidance recommended 

that monthly statements given with 

payment option mortgages provide 

information that enables consumers to 

make informed payment choices. The 

Agencies have revised the proposed 

guidance based on the comments 

received, and today are publishing the 

final Interagency Guidance in a separate 

Federal Register notice. 

The Interagency Guidance, including 

the consumer protection portion, is a set 

of recommended practices to assist 

institutions in addressing particular 

risks raised by nontraditional mortgage 

products. Several commenters to the 

proposal, including industry trade 

associations, encouraged the Agencies 

to include model or sample disclosures 

or other descriptive materials as part of 

the Interagency Guidance. 

In response to commenters, the 

Agencies believe that illustrations of 

consumer information may be useful to 

institutions as they seek to implement 

the consumer information 

recommendations of the Interagency 

Guidance. The Agencies also believe 

that it would be desirable to seek public 

comment before issuing illustrations of 

the recommended practices, to 

determine the types of illustrations that 

would be most useful to consumers and 

institutions. 

II. Proposed Illustrations 

The Agencies appreciate that some 

institutions, including community 

banks, may prefer not to incur the costs 

and other burdens of developing their 

own consumer information documents 

to address the issues raised in the 

Interagency Guidance, and could benefit 

from illustrations like those below. 

Use of the proposed illustrations 

would be entirely voluntary. 

Accordingly, there is no Agency 

requirement or expectation that 

institutions must use the illustrations in 

their communications with consumers. 

Institutions seeking to follow the 

recommendations set forth in the 

Interagency Guidance could, at their 

option, elect to: 

• Use or not use the illustrations; 

• Provide information based on the 

illustrations, but expand, abbreviate, or 

otherwise tailor any information in the 

illustrations as appropriate to reflect, for 

example: 

Æ The institution’s product offerings, 

such as by deleting information about 

loan products and loan terms not 

offered by the institution and by 

revising the illustrations to reflect 

specific terms currently offered by the 

institution; 

Æ The consumer’s particular loan 

requirements; 

Æ Current market conditions, such as 

by changing the loan amounts, interest 

rates, and corresponding payment 

amounts to reflect current local market 

circumstances; and 


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Æ Other information, consistent with 

the Interagency Guidance, such as the 

payment and loan balance information 

for monthly statements discussed in 

connection with Illustration 3 or 

information about when a prepayment 

penalty may be imposed; or 

• Provide the information described 

in the Interagency Guidance, as 

appropriate, in an alternate format. 

Whether or not an institution chooses 

to use the proposed illustrations, the 

Interagency Guidance recommends that 

promotional materials and other 

product descriptions provide consumers 

with information about the costs, terms, 

features, and risks of nontraditional 

mortgage products that can assist 

consumers in their product selection 

decisions. This includes information 

about potential payment shock and 

negative amortization and, where 

applicable, information about 

prepayment penalties and the costs of 

reduced documentation loans. The 

recommended information could be 

presented in a brief narrative format as 

shown in Illustration 1 and/or in a chart 

with examples as shown in Illustration 

2. 

Set forth below are three illustrations 

that show how important information 

about nontraditional mortgages could be 

provided to consumers in a concise and 

focused manner and format. The 

Agencies request comment on all 

aspects of these illustrations. We 

encourage specific comment on whether 

the illustrations, as proposed, would be 

useful to institutions, including 

community banks, seeking to implement 

the ‘‘Communications with Consumers’’

portion of the Interagency Guidance, or 

whether changes should be made to 

them. We also encourage specific 

comment on whether the illustrations, 

as proposed, would be useful in 

promoting consumer understanding of 

the risks and material terms of 

nontraditional mortgage products, as 

described in the Interagency Guidance, 

or whether changes should be made to 

them. Finally, we seek comment on 

whether there are other illustrations 

relating to nontraditional mortgages that 

would be useful to institutions and 

consumers. 

The Agencies are aware that 

individual institutions and industry 

associations have developed and are 

likely to continue developing 

documents that can be effective in 

conveying critical information 

discussed in the ‘‘Communications with 

Consumers’’ portion of the Interagency 

Guidance. These illustrations are not 

intended to dissuade institutions and 

trade associations from developing their 

own means of delivering important 

information about nontraditional 

mortgages to consumers. In this regard, 

the Agencies note that they have not 

conducted any consumer testing to 

assess the effectiveness of any existing 

documents currently used by 

institutions, or of the proposed 

illustrations set forth below. 

Commenters are specifically invited to 

provide information on any consumer 

testing they have conducted in 

connection with comparable 

disclosures. 


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Illustration 2 

Some of the information 

recommended by the guidance—in 

particular, some of the more detailed 

information about payment shock and 

negative amortization—may be 

conveyed most effectively through 

quantitative illustrations. The 

Interagency Guidance expressly 

contemplates hypothetical loan 

examples to aid consumer 

understanding. This information also 

could be incorporated into a narrative 

format as shown in Illustration 1. 

Illustration 2 shows another way in 

which this information could be 

presented. The chart and the narrative 

explanation may also be combined into 

a two-page document that both explains 

and illustrates the key facts about 

nontraditional mortgage products. 

BILLING CODE 7535–01–P 


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Illustration 3 

The Interagency Guidance also 

recommends that if institutions provide 

monthly statements to consumers on 

payment option mortgages, those 

statements should provide information 

that enables consumers to make 

informed payment choices, including an 

explanation of each payment option 

available and the impact of that choice 

on loan balances. The following 

illustration shows one way in which 

this information could be presented. It 

is important to note this illustration is 

not intended to set forth all of the 

information that may be useful, and 

could be provided, to consumers on 

their monthly statement, such as the 

current loan balance, an itemization of 

the payment amount devoted to interest 

and to principal, and whether the loan 

balance has increased. 

III. Request for Comment 

As noted above, the Agencies request 

comment on all aspects of the proposed 

illustrations. Comments are specifically 

requested on the usefulness of the 

illustrations, as proposed, for consumers 

and for institutions, or whether changes 

should be made; whether the 

information is set forth in a clear 

manner and format; whether these 

illustrations or a modified form should 

be adopted by the Agencies; and 

whether there are other illustrations 

relating to nontraditional mortgages that 

would be useful to consumers and 

institutions in addition to these. 

Dated: September 25, 2006. 

John C. Dugan, 

Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, September 27, 2006. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this 27th day of 

September, 2006. 

By order of the Federal Deposit Insurance 

Corporation. 

Robert E. Feldman, 

Executive Secretary. 

Dated: September 28, 2006. 

By the Office of Thrift Supervision. 

John M. Reich, 

Director. 

By the National Credit Union 

Administration on : Thursday, September 28, 

2006. 

JoAnn M. Johnson, 

Chairman. 

[FR Doc. 06–8479 Filed 10–3–06; 8:45 am] 

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P; 

6720–01–P; 7535–01–C 


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