Z - Disclosure of Required Deposits, Your Letter of September 13, 1997. A disclosure is required under the facts described in your letter.
Regulation Z requires disclosure statements for certain lending transactions.
However, if the credit union takes a security interest in the share account or does not permit the member to withdraw funds from the share account, the credit union is requiring the member to maintain the account as a condition of the loan and the disclosure is required. We contacted an attorney at the Federal Reserve Board and confirmed our opinion that the disclosure is required under the circumstances described in your letter.