Federal Register / Vol. 65, No. 227 / Friday, November 24, 2000 / Rules and Regulations 70465

PART 1011—MILK IN THE TENNESSEE

VALLEY MARKETING AREA

[REMOVED AND RESERVED]

For the reasons set forth in the

preamble and under the authority 7

U.S.C. 601–674, 7 CFR part 1011 is

removed and reserved.

Dated: November 15, 2000.

Richard M. McKee,

Deputy Administrator, Dairy Programs.

[FR Doc. 00–29943 Filed 11–22–00; 8:45 am]

BILLING CODE 3410–02–P

FEDERAL RESERVE SYSTEM

12 CFR Part 226

[Regulation Z; Docket No. R–1089]

Truth in Lending

AGENCY: Board of Governors of the

Federal Reserve System.

ACTION: Final rule; staff commentary.

SUMMARY: The Board is publishing a

final rule amending the staff

commentary that interprets the

requirements of Regulation Z (Truth in

Lending). The Board is required to

adjust annually the dollar amount that

triggers requirements for certain

mortgages bearing fees above a certain

amount. The Home Ownership and

Equity Protection Act of 1994 (HOEPA)

sets forth rules for home-secured loans

in which the total points and fees

payable by the consumer at or before

loan consummation exceed the greater

of $400 or 8 percent of the total loan

amount. In keeping with the statute, the

Board has annually adjusted the $400

amount based on the annual percentage

change reflected in the Consumer Price

Index that is in effect on June 1. The

adjusted dollar amount for 2001 is $465.

EFFECTIVE DATE: January 1, 2001.

FOR FURTHER INFORMATION CONTACT:

Minh-Duc T. Le, Staff Attorney,

Division of Consumer and Community

Affairs, Board of Governors of the

Federal Reserve System, at (202) 452–

3667. For the users of

Telecommunications Device for the Deaf

only, please contact Janice Simms at

(202) 872–4984.

SUPPLEMENTARY INFORMATION:

I. Background

The Truth in Lending Act (TILA; 15

U.S.C. 1601–1666j) requires creditors to

disclose credit terms and the cost of

consumer credit as an annual

percentage rate. The act requires

additional disclosures for loans secured

by a consumer’s home, and permits

consumers to cancel certain transactions

that involve their principal dwelling.

TILA is implemented by the Board’s

Regulation Z (12 CFR part 226). The

Board’s official staff commentary (12

CFR part 226 (Supp. I)) interprets the

regulation, and provides guidance to

creditors in applying the regulation to

specific transactions.

In 1995, the Board published

amendments to Regulation Z

implementing HOEPA, contained in the

Riegle Community Development and

Regulatory Improvement Act of 1994,

Public Law 103–325, 108 Stat. 2160 (60

FR 15463). These amendments are

contained in § 226.32 of the regulation

and impose substantive limitations and

additional disclosure requirements on

certain closed-end mortgage loans

bearing rates or fees above a certain

percentage or amount. As enacted, the

statute requires creditors to comply with

the HOEPA rules if the total points and

fees payable by the consumer at or

before loan consummation exceed the

greater of $400 or 8 percent of the total

loan amount. TILA and Regulation Z

provide that the $400 figure shall be

adjusted annually on January 1 by the

annual percentage change in the

Consumer Price Index (CPI) that was

reported on the preceding June 1. (15

U.S.C. 1602(aa)(3) and 12 CFR

226.32(a)(1)(ii)). The Board adjusted the

$400 amount to $451 for the year 2000.

The Bureau of Labor Statistics

publishes consumer-based indices

monthly, but does not ‘‘report’’ a CPI

change on June 1; adjustments are

reported in the middle of each month.

The board uses the CPI–U index, which

is based on all urban consumers and

represents approximately 80 percent of

the U.S. population, as the index for

adjusting the $400 figure. The

adjustment to the CPI–U index reported

by the Bureau of Labor Statistics on May

15, 2000, was the CPI–U index ‘‘in

effect’’ on June 1, and reflects the

percentage increase from April 1999 to

April 2000. The adjustment to the $400

figure below reflects a 3.1 percent

increase in the CPI–U index for this

period and is rounded to whole dollars

for ease of compliance.

II. Adjustment and Commentary

Revision

For the reasons set forth in the

preamble, for purposes of determining

whether a mortgage transaction is

covered by 12 CFR 226.32 (based on the

total points and fees payable by the

consumer at or before loan

consummation), a loan is covered if the

points and fees exceed the greater of

$465 or 8 percent of the total loan

amount, effective January 1, 2001.

Comment 32(a)(1)(ii)–2, which lists the

adjustments for each year, is amended

to reflect the dollar adjustment for 2001.

Because the timing and method of the

adjustment is set by statute, the Board

finds that notice and public comment

on the change are unnecessary.

III. Regulatory Flexibility Analysis

The Board certifies that this

amendment will not have a substantial

effect on the regulated entities because

the only change is to raise the

exemption level for transactions

requiring HOEPA disclosures.

List of Subjects in 12 CFR Part 226

Advertising, Federal Reserve System,

Mortgages, Reporting and recordkeeping

requirements, Truth in lending.

For the reasons set forth in the

preamble, the Board amends Regulation

Z, 12 CFR part 226, as set forth below:

PART 226—TRUTH IN LENDING

(REGULATION Z)

1. The authority citation for part 226

would continue to read as follows:

Authority: 12 U.S.C. 3806; 15 U.S.C. 1604

and 1637(c)(5).

2. In Supplement I to Part 226, under

Section 226.32—Requirements for

Certain Closed-End Home Mortgages,

under paragraph 32(a)(1)(ii), paragraph

2.vi. is added.

Supplement I to Part 226—Official Staff

Interpretations

* * * * *

Subpart E—Special Rules for Certain

Home Mortgage Transactions

* * * * *

§ 226.32—Requirements for Certain ClosedEnd Home Mortgages

32(a) Coverage.

* * * * *

Paragraph 32(a)(1)(ii).

* * * * *

2. Annual adjustment of $400 amount.

* * * * *

vi. For 2001, $465, reflecting a 3.1 percent

increase in the CPI–U from June 1999 to June

2000, rounded to the nearest whole dollar.

* * * * *

By order of the Board of Governors of the

Federal Reserve System, acting through the

Director of the Division of Consumer and

Community Affairs under delegated

authority, November 20, 2000.

Jennifer J. Johnson,

Secretary of the Board.

[FR Doc. 00–30044 Filed 11–22–00; 8:45 am]

BILLING CODE 6210–01–P