Home Equity Loan Consumer Protection Act of 1988
PL 100-709 (H.R.3011), enacted 11/23/1988

PUBLIC LAW 100-709—NOV. 23, 1988 
102 STAT. 4725 
Public Law 100-709 
100th Congress 
An Act 
To fimend the Truth in Lending Act to establish additional disclosure, advertising, 
and other requirements for home equity loans. 
Be it enacted by the Senate and Houslp of Representatives of the 
United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Home Equity Loan Consumer 
Protection Act of 1988". 
SEC. 2. DISCLOSURE AND ADVERTISING REQUIREMENTS FOR HOME 
EQUITY LOANS. 
(a) DISCLOSURE REQUIREMENTS.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting after section 
127 the following new section: 
"SEC. 127A. DISCLOSURE REQUIREMENTS FOR OPEN END CONSUMER 
CREDIT PLANS SECURED BY THE CONSUMER'S PRINCIPAL 
DWELLING. 
"(a) APPUCATION DISCLOSURES.—In the case of any open end 
consumer credit plan which provides for any extension of credit 
which is secured by the consumer's principal dwelling, the creditor 
shall make the following disclosures in accordance with sub-
section (b): 
"(1) FIXED ANNUAL PERCENTAGE RATE.—Each annual percent-
age rate imposed in connection with extensions of credit under 
the plan and a statement that such rate does not include costs 
other than interest. 
"(2) VARIABLE PERCENTAGE RATE.—In the case of a plan which 
provides for variable rates of interest on credit extended under 
the plan— 
"(A) a description of the manner in which such rate will 
be computed and a statement that such rate does not 
include costs other than interest; 
"(B) a description of the manner in which any chemges in 
the annual percentage rate will be made, including— 
"(i) any negative amortization and interest rate 
carryover; 
"(ii) the timing of any such changes; 
"(iii) any index or margin to which such changes in 
the rate are related; and 
"(iv) a source of information about any such index; 
"(C) if an initial annual percentage rate is offered which 
is not based on an index— 
"(i) a statement of such rate and the period of time 
such initial rate will be in effect; and 
"(ii) a statement that such rate does not include costs 
other than interest; 
Nov. 23, 1988 
[H.R. 3011] 
Home Equity 
Loan Consumer 
Protection Act of 
1988. 
15 use 1601 
note. 
15 u s e 1637a. 
102 STAT. 4726 
PUBLIC LAW 100-709—NOV. 23, 1988 
"(D) a statement that the consumer should ask about the 
current index value and interest rate; 
"(E) a statement of the maximum amount by which the 
annual percentage rate may change in any 1-year period or 
a statement that no such limit exists; 
"(F) a statement of the maximum annual percentage rate 
that may be imposed at any time under the plan; 
"(G) subject to subsection (bX3), a table, based on a 
$10,000 extension of credit, showing how the annual 
percentage rate and the minimum periodic pa3niient 
amount under each repayment option of the plan would 
have been affected during the preceding 15-year period by 
changes in any index used to compute such rate; 
"(H) a statement of— 
"(i) the maximum annual percentage rate which may 
be imposed under each repayment option of the plan; 
"(ii) the minimum amount of any periodic payment 
which may be required, based on a $10,000 outstanding 
balance, under each such option when such maximum 
annual percentage rate is in effect; and 
"(iii) the earliest date by which such maximum 
annual interest rate may be imposed; and 
"(I) a statement that interest rate information will be 
provided on or with each periodic statement. 
"(3) OTHER PEES IMPOSED BY THE CREDITOR.—An itemization of 
any fees imposed by the creditor in connection with the avaU-
abUity or use of credit under such plan, including annual fees, 
application fees, transaction fees, and closing costs (including 
costs commonly described as 'points'), and the time when such 
fees are payable. 
"(4) ESTIMATES OF FEES WHICH MAY BE IMPOSED BY THIRD 
PARTIES.— 
"(A) AGGREGATE AMOUNT.—An estimate, based on the 
creditor's experience with such plans and stated as a single 
amount or as a reasonable range, of the aggregate amount 
of additional fees that may be imposed by third parties 
(such as governmental authorities, appraisers, and attor-
neys) in connection with opening an account under the 
plan. 
"(B) STATEMENT OF AVAILABILITY.—A statement that the 
consumer may ask the creditor for a good faith estimate by 
the creditor of the fees that may be imposed by third 
parties. 
"(5) STATEMENT OF RISK OP LOSS OF DWELLING.—A statement 
that— 
"(A) any extension of credit under the plan is secured by 
the consumer's dwelling; and 
"(B) in the event of any default, the consumer risks the 
loss of the dwelling. 
"(6) CONDmONS TO WHICH DISCLOSED TERMS ARE SUBJECT.— 
"(A) PERIOD DURING WHICH SUCH TERMS ARE AVAILABLE.— 
A clear and conspicuous statement— 
"(i) of the time by which an application must be 
submitted to obtain the terms discl(^ed; or 
"(ii) if applicable, that the terms are subject to 
change. 
PUBLIC LAW 100-709—NOV. 23, 1988 
102 STAT. 4727 
"(B) 
RIGHT OF REFUSAL IF CERTAIN TERMS CHANGE.—A 
statement that— 
"(i) the consumer may elect not to enter into an 
agreement to open an account under the plan if any 
term changes (other than a change contemplated by a 
variable feature of the plan) before any such agreement 
is final; and 
"(ii) if the consumer makes an election described in 
clause (i), the consumer is entitled to a refund of all 
fees paid in connection with the application. 
"(C) RETENTION OF INFORMATION.—A statement that the 
consumer should make or otherwise retain a copy of 
information disclosed under this subparagraph. 
"(7) 
RIGHTS OF CREDITOR WITH RESPECT TO EXTENSIONS OF 
CREDIT.—A statement that— 
"(A) under certain conditions, the creditor may terminate 
any account under the plan £ind require immediate repay-
ment of any outstanding balance, prohibit any additional 
extension of credit to the account, or reduce the credit limit 
applicable to the account; and 
(B) the consumer may receive, upon request, more spe-
cific information about the conditions under which the 
creditor may take any action described in subparagraph 
(A). 
"(8) REPAYMENT OPTIONS AND MINIMUM PERIODIC PAYMENTS.— 
The repayment options under the plan, including— 
(A) if applicable, any differences in repayment options 
with regard to— 
*^i) any period during which additional extensions of 
credit may be obtained; and 
"(ii) any period during which repayment is required 
to be made and no additional extensions of credit may 
be obtained; 
"(B) the length of any repayment period, including any 
differences in the length of any repayment period with 
regard to the periods described in clauses (i) and (ii) of 
subparagraph (A); and 
"(C) an explanation of how the amount of any minimum 
monthly or periodic payment will be determined under 
each such option, including any differences in the deter-
mination of any such amount with regard to the periods 
described in clauses (i) and (ii) of subparagraph (A). 
"(9) EbCAMPLE OF MINIMUM PAYMENTS AND MAXIMUM REPAY-
MENT PERIOD.—An example, based on a $10,000 outstanding 
balance and the interest rate (other than a rate not based on the 
index under the plan) which is, or was recently, in effect under 
such plan, showing the minimum monthly or periodic payment, 
and the time it would take to repay the entire $10,000 if the 
consumer paid only the minimum periodic payments and 
obtained no additional extensions of credit. 
"(10) STATEMENT CONCERNING BALLOON PAYMENTS.—If, under 
any repayment option of the plan, the pajnnent of not more 
than the minimum periodic payments required under such 
option over the length of the repayment period— 
"(A) would not repay any of the principal balance; or 
"(B) would repay less than the outstanding balance by the 
end of such period. 
102 STAT. 4728 
PUBLIC LAW 100-709—NOV. 23, 1988 
as the case may be, a statement of such fact, including an 
explicit statement that at the end of such repayment period a 
balloon payment (as defined in section 147(f)) would result 
which would be required to be paid in full at that time. 
"(11) NEGATIVE AMORTIZATION.—If applicable, a statement 
that— 
"(A) any limitation in the plan on the amount of any 
increase in the minimum payments may result in negative 
amortization; 
"(B) n^ative amortization increases the outstanding 
principal bcdance of the account; and 
"(C) negative amortization reduces the consumer's equity 
in the consumer's dwelling. 
"(12) LIMITATIONS AND MINIMUM AMOUNT REQUIREMENTS ON 
EXTENSIONS OF CREDIT.— 
"(A) NuikfBER AND DOLLAR AMOUNT LIMITATIONS.—^Any 
limitation contained in the plan on the number of exten-
sions of credit and the amount of credit which may be 
obtained during any month or other defined time period. 
"(B) MINIMUM BALANCE AND OTHER TRANSACTION AMOUNT 
REQUIREMENTS.—^Any requirement which establishes a 
minimum amount for— 
"(i) the initial extension of credit to an account under 
the plan; 
"(ii) any subsequent extension of credit to an account 
under the plan; or 
"(iii) any outstanding balance of an account under 
the plan. 
"(13) STATEMENT REGARDING CONSULTATION OP TAX ADVISOR.— 
A statement that the consumer should consult a tax advisor 
regarding the deductibility of interest and charges under the 
plan. 
"(14) DISCLOSURE REQUIREMENTS ESTABLISHED BY BOARD.—Any 
other term which the Board requires, in reg^ations, to be 
disclosed. 
"(b) TIME AND FORM OP DISCLOSURES.— 
"(1) TIME OF DISCLOSURE.— 
"(A) IN GENERAL.—^The disclosures required under subsec-
tion (a) with respect to any open end consumer credit plan 
which provides for any extension of credit which is secured 
by the consumer's principal dwelling and the pamphlet 
required under suteection (e) shall be provided to any 
consumer at the time the creditor distributes an application 
to establish an account under such plan to such consumer. 
"(B) TELEPHONE, PUBUCATIONS, AND 3d PARTY APPUCA-
TiONS.—In the case of telephone applications, applications 
contained in magazines or other publications, or applica-
tions provided by a third party, the disclosures required 
under subsection (a) and the pamphlet required imder 
subsection (e) shall be provided by the creditor before the 
end of the 3-day period beginning on the date the creditor 
receives a completed application from a consumer. 
"(2) FORM.— 
"(A) IN GENERAL.—Except as provided in paragraph 
(1)(B), the disclosures required under subsection (a) shall be 
provided on or with any application to establish an account 
under an open end consumer credit plan which provides for 
PUBLIC LAW 100-709—NOV. 23, 1988 
102 STAT. 4729 
any extension of credit which is secured by the consumer's 
principal dwelling. 
"(B) SEGREGATION OF REQUIRED DISCLOSURES FROM OTHER 
INFORMATION.—^The disclosures required under subsection 
(a) shall be conspicuously segregated from all other terms, 
dat£^ or additional information provided in connection with 
the application, either by grouping the disclosures sepa-
rately on the application form or by providing the disclo-
sures on a separate form, in accordance with regulations of 
the Board. 
"(C) PRECEDENCE OF CERTAIN INFORMATION.—The disclo-
sures required by paragraphs (5), (6), and (7) of subsection 
(a) shall precede all of the other required disclosures. 
"(D) SPECIAL PROVISION RELATING TO VARIABLE INTEREST 
R
A
T
E INFORMATION.—Whether or not the disclosures re-
quired under subsection (a) are provided on the application 
form, the variable rate information described in subsection 
(aX2) may be provided separately from the other informa-
tion required to be disclosed. 
"(3) REQUIREMENT FOR HISTORICAL TABLE.—In preparing the 
table required imder subsection (aX2XG), the creditor shall 
consistently select one rate of interest for each year and the 
manner of selecting the rate from year to year shall be consist-
ent with the plan. 
"(c) 3d PARTY APPUCATIONS.—In the case of an application to open 
an account under any open end consumer credit plan described in 
subsection (a) which is provided to a consumer by any person other 
than the creditor— 
"(1) such person shall provide such consumer with— 
"(A) the disclosures required under subsection (a) with 
respect to such plan, in accordance with subsection (b); and 
"(B) the pamphlet required under subsection (e); or 
"(2) if such person cannot provide specific terms about the 
plan because specific information about the plan terms is not 
available, no nonrefundable fee may be imposed in connection 
with such application before the end of the 3-day period begin-
ning on the date the consumer receives the disclosures required 
under subsection (a) with respect to the application. 
"(d) PRINCIPAL DWELLING DEFINED.—For purposes of this section 
and sections 137 and 147, the term 'principal dwelling* includes any 
second or vacation home of the consimier. 
"(e) PAMPHLET.—In addition to the disclosures required under 
subsection (a) with respect to an application to open an account 
under any open end consumer credit plan described in such subsec-
tion, the creditor or other person providing such disclosures to the 
consumer shall provide— 
"(1) a pamphlet published by the Board pursuant to section 4 
of the Home Equity Consumer Protection Act of 1988; or 
"(2) any pamphlet which provides substantially similar 
information to the information described in such section, as 
determined by the Board.". 
(b) AoDmoNAL DISCLOSURES WHEN ACCOUNT IS OPENED.—Section 
127(a) of the Truth in Lending Act (15 U.S.C. 1637(a)) is amended by 
adding at the end thereof the following new paragraph: 
"(8) In the case of any account under an open end consumer 
credit plan which provides for any extension of credit which is 
102 STAT. 4730 
PUBLIC LAW 100-709—NOV. 23, 1988 
secured by the consumer's principal dwelling, any information 
which— 
"(A) is required to be disclosed under section 127A(a); and 
"(B) the Board determines is not described in any other 
paragraph of this subsection.", 
(c) ADVERTISING REQUIREMENTS.—Chapter 3 of the Truth in Lend-
ing Act (15 U.S.C. 1661 et seq.) is amended by adding at the end 
thereof the following new section: 
15 use 1665b. 
"SEC. 147. ADVERTISING OF OPEN END CONSUMER CREDIT PLANS 
SECURED BY THE CONSUMER'S PRINCIPAL DWELLING. 
"(a) IN GENERAL.—If any advertisement to aid, promote, or assist, 
directly or indirectly, the extension of consumer credit through an 
open end consumer credit plan under which extensions of credit are 
secured by the consumer's principal dwelling states, affirmatively or 
negatively, any of the specific terms of the plan, including any 
periodic payment amount required under such plan, such advertise-
ment shall also clearly and conspicuously set forth the following 
information, in such form and manner as the Board may require: 
"(1) LOAN FEES AND OPENING COST ESTIMATES.—Any loan fee 
the amount of which is determined as a percentage of the credit 
limit applicable to an account under the plan and an estimate of 
the aggregate amount of other fees for opening the account, 
based on the creditor's experience with the plan and stated as a 
single amount or as a reasonable range. 
"(2) PERIODIC RATES.—In any case in which periodic rates may 
be used to compute the finance charge, the periodic rate^ 
expressed as an annual percentage rate. 
(3) HIGHEST ANNUAL PERCENTAGE RATE.—The highest annual 
percentage rate which may be imposed under the plan. 
"(4) OTHER INFORMATION.—Any other information the Board 
may by regulation require. 
"(b) TAX DEDUCTIBILITY.—If any advertisement described in 
subsection (a) contains a statement that any interest expense 
incurred with respect to the plan is or may be tax deductible, the 
advertisement shall not be misleading with respect to such 
deductibility. 
"(c) CERTAIN TERMS PROHIBITED.—No advertisement described in 
subsection (a) with respect to any home equity account may refer to 
such loan as 'free money' or use other terms determined by the 
Board by regulation to be misleading. 
"(d) DISCOUNTED INITIAL RATE.— 
"(1) IN GENERAL.—If any advertisement described in subsec-
tion (a) includes an initial annual percentage rate that is not 
determined by the index or* formula used to make later interest 
rate adjustments, the advertisement shall also state with equal 
prominence the current annual percentage rate that would 
have been applied using the index or formula if such initial rate 
had not been offered. 
"(2) QUOTED RATE MUST BE REASONABLY CURRENT.—The annual 
percentage rate required to be disclosed under the paragraph (1) 
rate must be current as of a reasonable time given the media 
involved. 
"(3) PERIOD DURING WHICH INITIAL RATE IS IN EFFECT.—Any 
advertisement to which paragraph (1) applies shall also state 
the period of time during which the initial annual percentage 
rate referred to in such paragraph will be in effect. 
PUBLIC LAW 100-709—NOV. 23, 1988 
102 STAT. 4731 
"(e) BAULOON PATBIENT.—^If any advertisement described in 
subsection (a) contains a statement r^arding the minimum monthly 
payment under the plan, the advertisement shall also disclose, if 
appli(»ble, the fact that the plan includes a balloon payment. 
"(f) BALLOON PAYMENT DEFINED.—^For purposes of this section and 
section 127A, the term 'balloon payment' means, with respect to any 
open end consumer credit plan under which extensions of credit are 
secured by the consumer's principal dwelling, any repayment option 
under which— 
"(1) the account holder is required to repay the entire amount 
of any outstanding balance as of a specified date or at the end of 
a specified period of time, as determined in accordance with the 
terms of tiie agreement pursuant to which such credit is 
extended and 
"(2) the aggr^ate amount of the minimum periodic payments 
requjbred would not fiilly amortize such outstanding balance by 
such date or at the end of such period.". 
(d) TECHNICAL AND CONFORMING AMENDBCENTS.—Section 122(b) of 
the Trulii in Lending Act (15 U.S.C. 1632(b)) is amended by striking 
out "section 128(bXl)" and inserting in lieu thereof "sections 
127A(bX3) and 128(bXl)". 
SBC 3. HOME EQUITY PROTECTIONS. 
Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is 
amended by adding at the end thereof the following new section: 
"SEC. 137. HOME EQUITY PLANS. 
15 USC 1647. 
"(a) INDEX REQUIREMENT.—^In the case of extensions of credit 
under an open end consumer credit plan which are subject to a 
variable rate and are secured by a consumer's principal dwelling, 
the indfflc or other rate of interest to which changes in the annual 
percentage rate are related shall be based on an index or rate of 
interest which is publicly available and is not under the control of 
the creditor. 
"(b) GROUNDS FOR ACCELERATION OF OUTSTANDING BALANCE.—A 
creditor may not unilaterally terminate any account under an open 
end consumer credit plan under which extensions of credit are 
secured by a consumer's principal dwelling and require the imme-
diate repayment of any outstanding balance at sudi time, except in 
the case of— 
"(1) fi:aud or material misrepresentation on the part of the 
consumer in connection with the account; 
"(2) failure by the consumer to meet the repayment terms of 
the agreement for any outstanding balance; or 
"(3) any other action or failure to act by the consumer which 
adversely aCTects the creditor's security for the account or any 
r i ^ t of the creditor in such security. 
"(c) CHANGE IN TERMS.— 
"(1) IN GENERAL.—No open end consumer credit plan under 
which extensions of credit are secured by a consumer's principal 
dwelling may contain a provision which permits a creditor to 
change unilaterally any term required to be disclosed under 
section 127 
A(a) or any other term, except a change in insignifi-
cant terms such as the address of tiie creditor for billing 
purposes. 
102 STAT. 4732 
PUBLIC LAW 100-709—NOV. 23, 1988 
"(2) CERTAIN CHANGES NOT PRECLUDED.—Notwithstanding the 
provisions of subsection (1), a creditor may make any of the 
following changes: 
"(A) Change the index and margin applicable to exten-
sions of credit under such plan if the index used by the 
creditor is no longer available and the substitute index and 
margin would result in a substantially similar interest rate. 
"(B) Prohibit additional extensions of credit or reduce the 
credit limit applicable to an account under the plan during 
any period in which the value of the consumers principal 
dwelling which secures any outstanding balance is signifi-
cantly less than the original appraisal value of the 
dwelling. 
"(C) Prohibit additional extensions of credit or reduce the 
credit limit applicable to the account during any period in 
which the creditor has reason to believe that the consumer 
will be unable to comply with the repayment requirements 
of the account due to a material change in the consumer's 
financial circumstances. 
"(D) Prohibit additional extensions of credit or reduce the 
credit limit applicable to the account during any period in 
which the consumer is in default with respect to any mate-
rial obligation of the consumer under the agreement. 
"(E) Prohibit additional extensions of credit or reduce the 
credit limit applicable to the account during any period in 
which— 
"(i) the creditor is precluded by government action 
from imposing the annual percentage rate provided for 
in the account agreement; or 
"(ii) any government action is in effect which ad-
versely affects the priority of the creditor's security 
interest in the account to the extent that the value of 
the creditor's secured interest in the property is less 
than 120 percent of the amount of the credit limit 
applicable to the account. 
"(F) Any change that will benefit the consumer. 
"(3) 
MATERIAL 
OBUGATIONS.—Upon the request of the 
consumer and at the time an agreement is entered into by a 
consumer to open an account under an open end consumer 
credit plan under which extensions of credit are secured by the 
consumer's principal dwelling, the consumer shall be given a 
list of the categories of contract obligations which are deemed 
by the creditor to be material obligations of the consumer under 
the agreement for purposes of pareigraph (2)(D). 
"(4) CONSUMER BENEFIT.— 
"(A) IN GENERAL.—For purposes of paragraph (2)(F), a 
change shall be deemed to benefit the consumer if the 
change is unequivocally beneficial to the borrower and the 
change is beneficial through the entire term of the 
agreement. 
"(B) BOARD CATEGORIZATION.—The Board may, by regula-
tion, determine categories of changes that benefit the 
consumer. 
"(d) TERMS CHANGED AFTER APPLICATION.—If any term or condi-
tion described in section 127A(a) which is disclosed to a consumer in 
connection with an application to open an account under £ui open 
end consumer credit plan described in such section (other than a 
PUBLIC LAW 100-709—NOV. 23, 1988 
102 STAT. 4733 
variable feature of the plan) changes before the account is opened, 
and if, as a result of such change, the consumer elects not to enter 
into the plan agreement, the creditor shall refund all fees paid by 
the consumer in connection with such application. 
"(e) ADDITIONAL REQUIREMENTS RELATING TO REFUNDS AND IMPOSI-
TION O
P NONREFUNDABLE FEES.— 
"(1) IN GENERAL.—No nonrefundable fee may be imposed by a 
creditor or any other person in connection with any application 
by a consumer to establish an account under any open end 
consumer credit plan which provides for extensions of credit 
which are secured by a consumer's principal dwelling before the 
end of the 3-day period beginning on the date such consumer 
receives the disclosure required under section 127A(a) and the 
pamphlet required under section 127A(e) with respect to such 
application. 
(2) CONSTRUCTIVE RECEIPT.—For purposes of determining 
when a nonrefundable fee may be imposed in accordance with 
this subsection if the disclosures and pamphlet referred to in 
parc^aph (1) are mailed to the consumer, the date of the 
receipt of the disclosures by such consumer shall be deemed co 
be 3 Dusiness days after the date of mailing by the creditor.". 
SEC. 4. CONSUMER EDUCATION. 
15 USC 1637a 
The Board of Governors of the Federal Reserve System shall 
develop and prepare a pamphlet for distribution to consumers which 
contains— 
(1) a general description of open end consumer credit plans 
secured by the consumer's principal dwelling and the terms and 
conditions under which such loans are generally extended; and 
(2) a discussion of the potential advantages and disadvantages 
of such plans, including how to compare among home equity 
plans and between home equity and closed end credit plans. 
SEC. 5. CLERICAL AMENDMENTS. 
(a) CHAPTER 2.—The table of sections for chapter 2 of the Truth in 
Lending Act is amended— 
(1) by inserting after the item relating to section 127 the 
following new item: 
"127A. Disclosure requirements for open end consumer credit plans secured by the 
consumer's principal dwelling."; 
and 
(2) by inserting after the item relating to section 136 the 
following new item: 
"137. Home equity plans.". 
0
1
)
) CHAPTER 3.—The table of sections for chapter 3 of the Truth in 
Lending Act is amended by inserting after the item relating to 
section 146 the following new item: 
"147. Advertising of open end consumer credit plans secured by the consumer's 
principal dwelling.". 
SEC. 6. ABILITY TO COMPARE PLANS. 
(a) STUDY REQUIRED.—Before the end of the 6-month period begin-
ning on the date of the enactment of this Act, the Board of Gov-
ernors of the Federal Reserve System shall conduct a study to 
determine whether the use of the same term, such as annual 
percentage rate, to describe the cost to the consumer for extensions 
102 STAT. 4734 
PUBLIC LAW 100-709—NOV. 23, 1988 
of credit under all forms of consumer credit plans may unduly 
mislead consumers with respect to the comparability of the various 
forms of such extensions of credit. 
db) REPORT REQUIRED.—At the conclusion of the study required 
under subsection (a), the Board of Governors of the Federal Reserve 
System shall submit a report to the Congress containing the Board's 
findings and conclusions in connection with such study and, if 
applicable, such recommendations for legislation or administrative 
action as the Board may determine to be appropriate, including, if 
appropriate, a new term to replace "annual percentage rate" or 
"corresponding nominal percentage rate". 
15 u s e 1637a 
SEC. 7. REGULATIONS AND EFFECTIVE DATE. 
(a) REGULATIONS.—Before the end of the 60-day period beginning 
on the date of the enactment of this Act, the Board of Governors of 
the Federal Reserve System shall prescribe such regulations as may 
be necessary to carry out the proposes of the amendments made by 
this Act. 
(b) EFFECTIVE DATE.—The amendments made by this Act, and the 
regulations prescribed pursuant to subsection (a) with respect to 
such amendments, shall apply to— 
(1) any agreement to open an account under an open end 
consumer credit plan under which extensions of credit are 
secured by a consumer's principal dwelling which is entered 
into after the end of the 5-month period beginning on the date 
on which the regulations prescribed under subsection (a) 
become final; and 
(2) any application to open such an account which is distrib-
uted by, or received by a creditor, after the end of such 5-month 
period. 
(c) VOLUNTARY COMPUANCE.—Notwithstanding subsection 0)), any 
creditor may comply with the amendments made by this Act, in 
accordance with the regulations prescribed by the Board, before the 
effective date established under such subsection. 
Approved November 23, 1988. 
LEGISLATIVE HISTORY—H.R. 3011: 
CONGRESSIONAL RECORD, Vol. 134 (1988): 
June 20, considered and passed House. 
Oct. 21, considered and passed Senate. 
o