| |
Regulation
B
Equal Credit Opportunity
Regulation B prohibits creditors from discriminating against credit
applicants, establishes guidelines for gathering and evaluating credit
information, and requires written notification when credit is
denied.
The regulation prohibits creditors from discrimination
against applicants on the basis of age, race, color, religion, national origin,
sex, marital status, or receipt of income from public assistance
programs.
Model credit application forms are provided in the regulation
to facilitate compliance. By properly using these forms, creditors can be
assured of being in compliance with the application requirements.
The
regulation also requires creditors to give applicants a written notification of
rejection of an application, a statement of the applicant's rights under the
Equal Credit Opportunity Act, and a statement either of the reasons for the
rejection or of the applicant's right to request the reasons. Creditors who
furnish credit information, when reporting information on married borrowers,
must report information in the names of each spouse.
The regulation
establishes a special residential mortgage credit monitoring system for
regulatory agencies by requiring that lenders ask for and note the race,
national origin, sex, marital status, and age of residential mortgage
applicants. The regulation covers all credit transactions (unlike other
regulations that may cover only consumer credit), with some modifications
applicable to certain classes of transactions. |
| ↑ top |
Regulation
C
Home Mortgage Disclosure
Regulation C requires certain mortgage lenders to disclose data
regarding their lending patterns.
The regulation carries out the
Home Mortgage Disclosure Act of 1975, providing citizens and public officials
with data to help determine whether lenders are meeting the credit needs of
their communities and complying with fair lending laws.
The regulation
applies to banks, savings and loans, credit unions and mortgage companies that
have offices in Metropolitan Statistical Areas and that meet certain coverage
criteria relating to asset size and volume of lending. These institutions must
record and make available to the public data on mortgage loans that they
originate or purchase and also on applications for such loans. In many
instances, the race or national origin, gender, and income of the applicant
must be reported as well as the location of the property and the type of
loan.
The Board may exempt from Regulation C any institution complying
with substantially similar state laws. |
| ↑ top |
Regulation
D
Reserve Requirements
Regulation D
imposes uniform reserve requirements on all depository institutions with
transaction accounts or nonpersonal time deposits; defines such deposits and
requires reports of deposits to the Federal Reserve.
This
regulation sets uniform reserve requirements for all depository institutions.
The reserve requirements are based on various deposit account classifications.
The regulation is important to consumers because it defines transaction,
savings and time deposit account categories.
Transaction accounts
are:
- checking accounts
- negotiable order of withdrawal
- (NOW) accounts
- share draft accounts at credit unions
- automatic transfer service (ATS)
accounts
Savings accounts are:
- share accounts at credit unions
- passbook savings accounts
- statement savings accounts
- money market deposit accounts
Time deposits are:
- certificates of deposits (CDs)
- certain "club" accounts
- share certificates at credit unions
|
| ↑ top |
Regulation
E
Electronic Fund
Transfers
Regulation E establishes the
rights, liabilities, and responsibilities of parties in electronic fund
transfers (EFT) and protects consumers using EFT systems.
Regulation E prescribes rules for the solicitation and issuance of EFT cards;
governs consumers' liability for unauthorized electronic fund transfers
(resulting, for example, from lost or stolen cards); requires institutions to
disclose certain terms and conditions of EFT services; provides for
documentation of electronic transfers (on periodic statements, for example)-
sets up a resolution procedure for errors; and covers notice of crediting and
stoppage of preauthorized payments from a customer's account.
Stored-value cards (also known as "smart cards") and home banking by
personal computer would be subject to Regulation E because the act governs
electronic fund transfers.
|
| |
Regulation
H
Membership Requirements for State Chartered
Banks
This regulation is important for
consumers because it requires lenders to disclose information regarding flood
hazard areas which require additional insurance.
This regulation
sets forth the procedures for state-chartered banks to become members of the
Federal Reserve Bank System and states the privileges and requirements of
membership. Of importance for consumers is the requirement that lenders
disclose to borrowers if their structure is in a designated flood hazard area
and that the lender require borrowers to purchase flood insurance if their
improved property is in a designated flood hazard area.
|
| ↑ top |
Regulation
M
Consumer Leasing
Regulation M implements the consumer leasing provisions of the Truth in
Lending Act.
Regulation M applies to leases of personal property
for more than 4 months for personal, family, or household use. It requires
leasing companies to disclose in writing the cost of a lease, including a
security deposit, monthly payments, license, registration, taxes and
maintenance fees and, in the case of an open-end lease, whether a 'balloon
payment' may be applied. It also requires written disclosure of the terms of a
lease, including insurance, guarantees, responsibility for servicing the
property, standards for wear and tear, and any option to buy.
|
| |
Regulation P
Regulation P requires a financial institution to provide notice to its customers about its privacy policies and practices. The regulation provides consumers with the right to prevent a financial institution from disclosing nonpublic personal information about the consumer to nonaffiliated third parties, by providing a means to "opt out" of the disclosure. |
| |
Regulation
Q
Interest on Demand Deposits,
Advertising
Regulation Q prohibits member
banks from paying interest on demand deposits.
Federal law
prohibits the payment of interest on demand deposits, as defined by section
204.2(b) of Regulation D. The prohibition of payment of interest on demand
deposits is designed to address the lack of uniformity that contributed to bank
failures during the depression. The prohibition prevents either strong
institutions or troubled institutions from creating a bidding war for
funds. |
| ↑ top |
Regulation V
Regulation V improves the procedures by which consumers access their credit files or credit scores that are maintained by reporting agencies. The regulation also requires financial institutions to identify patterns, practices, or other activities regarding a consumer's account that may indicate the existence of fraudulent activity or identity theft.
|
| |
Regulation
Z
Truth in Lending
Regulation Z
prescribes uniform methods of computing the cost of credit, disclosure of
credit terms, and procedures for resolving errors on certain credit accounts.
It also gives consumers the right to cancel certain transactions involving
their principal residence.
The credit provisions of the regulation
apply to all persons who extend consumer credit more than 25 times a year or,
in the case of consumer credit secured by real estate, more than 5 times a
year. Consumer credit is generally defined as credit offered or extended to
individuals for personal, family, or household purposes, where the credit is
repayable in more than four installments or for which a finance charge is
imposed.
The major provisions of the regulation require lenders to:
- provide borrowers with meaningful, written
information on essential credit terms, including the cost of credit expressed
as an annual percentage rate (APR).
- respond to consumer complaints of billing
errors on certain credit accounts within a specific period.
- identify credit transactions on periodic
statements of open-end credit accounts.
- provide certain rights regarding credit
cards.
- provide good faith estimations of disclosure
information before consummation of certain residential mortgage
transactions.
- provide "early" disclosure of credit terms to
consumers interested in adjustable rate mortgages (ARMS) and home equity lines
of credit.
- comply with special requirements when
advertising credit.
|
| ↑ top |
Regulation
AA
Consumer Complaint
Procedures
Regulation AA establishes consumer
complaint procedures and defines unfair or deceptive acts or practices of banks
in connection with extensions of credit to consumers.
Under the
regulation, a consumer complaint concerning either an alleged unfair or
deceptive practice, or an alleged violation of law or regulation by a state
member bank, will be investigated by the Federal Reserve. Complaints regarding
institutions other than state member banks will be referred to the appropriate
Federal Agency.
- To file a consumer complaint concerning a
national bank contact the local Office of the Comptroller of the Currency.
- To file a consumer complaint concerning a state
member bank (a bank that is a member of the Federal Reserve System) contact
the Federal Reserve Consumer Help Center.
- To file a consumer complaint concerning a
nonmember bank or a savings bank (a bank that is not a member of the Federal
Reserve System) contact the local Federal Deposit Insurance Corporation
('FDIC') office.
- To file a consumer complaint concerning a
savings and loan contact the local Office of Thrift Supervision ('OTS').
- To file a consumer complaint concerning a
credit union contact the local National Credit Union Administration
('NCUA').
Regulation AA also prohibits the
use of certain consumer contract provisions, an accounting practice known as
'pyramiding' (charging a late fee on an unpaid late fee) and misrepresentation
of cosigners liability. |
| ↑ top |
Regulation BB
Community
Reinvestment
Regulation BB implements the
Community Reinvestment Act (CRA) and is designed to encourage banks to help
meet the credit needs of their communities.
Under Regulation BB,
each bank office must make available a statement for public inspection
indicating, on a map, the communities served by that office and the type of
credit the bank is prepared to extend within the communities served. The
regulation requires each bank to maintain a file of public comments relating to
its CRA statement. The Federal Reserve, in examining a bank, must assess its
record in meeting the credit needs of the entire community, including low- and
moderate-income neighborhoods, and must take account of the record in
considering certain bank applications. In addition, the act requires public
disclosure of a bank's CRA rating and CRA performance evaluations. |
| |
Regulation
CC
Availability of Funds and Collection of
Checks
Regulation CC implements the Expedited
Funds Availability Act (EFA) and governs the availability of funds and the
collection and return of checks.
Regulation CC establishes
availability schedules, as provided in the EFA, under which depository
institutions must make funds deposited into transaction accounts available for
withdrawal. The regulation also provides that depository institutions must
disclose their funds availability policies to their customers. In addition,
Regulation CC establishes rules designed to speed the collection and return of
checks and imposes a responsibility on banks to return unpaid checks
expeditiously. The provisions of Regulation CC govern all checks, not just
those collected through the Federal Reserve System. |
| |
Regulation
DD
Truth in Savings
Regulation DD requires depository institutions to disclose the terms of
deposit accounts to consumers.
The regulation applies to consumer
deposit accounts offered by depository institutions (except credit unions,
which are governed by rules of the National Credit Union Administration).
The major provisions of the regulation require institutions to:
- provide consumer account holders with written
information about important terms of an account, including the annual
percentage yield.
- provide fee and other information on any
periodic statement sent to consumers.
- use certain methods to determine the balance on
which interest is calculated.
- comply with special requirements when
advertising deposit accounts.
|
| ↑ top |
Fair Credit
Reporting Act
This act defines a credit
reporting agency and adopts procedures for meeting the needs of lenders while
maintaining fair and equitable use of consumer credit information.
This act establishes procedures for correcting mistakes on a consumer's credit
report and requires that a consumer's record only be provided for legitimate
business purposes. It also requires that the record be kept confidential. A
credit record may be retained seven years for judgements, liens, suits, and
other adverse information except for bankruptcies, which may be retained for
ten years. If a consumer is denied credit, a free credit report may be
requested within 30 days of denial. |
| |
Fair Debt
Collection Practices Act
This act defines
which financial institutions are subject to the act and prohibits abusive debt
collection practices.
The purpose of this act is to eliminate
abusive, deceptive, and unfair debt collection practices. It applies to third
party debt collectors or to those who use a name other than their own in
collecting debts. Most all financial institutions collect debts in their own
name and therefore the act applies to only a few of them. Complaints regarding
debt collection practices should generally be filed with the Federal Trade
Commission. |
| |
Fair
Housing Act
This act prohibits discrimination
on the basis of race, color, sex, religion, handicap, familial status or
national origin in the financing, sale or rental of housing.
The
Fair Housing Act (FHA) was implemented as part of the Civil Rights Act, Title
VIII, in 1968. FHA applies to the sale and rental of housing in addition to
residential real estate-related transactions such as lending.
The FHA
provides that it is unlawful for any person or entity whose business includes
engaging in residential real estate-related transactions to discriminate
against any person in making available such a transaction, or in the terms or
conditions of such a transaction. Such discrimination cannot be based on race,
color, religion, sex, handicap, familial status, or national origin.
The FHA and the Equal Credit Opportunity Act (ECOA) prohibit pre-screening or
discouraging loan applicants. Individuals should be encouraged to apply,
regardless of whether an individual lender believes the loan will or will not
be approved. Under the prohibition, banks should ensure their advertising
policies and underwriting policies and procedures do not have the effect of
inadvertently discouraging or pre-screening potential applicants. Additionally,
loan officers are prohibited from discriminating against persons who exercise
their right under the Consumer Credit Protection Act.
Use of excessive
and burdensome credit qualifying standards for certain groups of persons is
prohibited under FHA. Also prohibited are the imposition on minority loan
applicants of: less favorable interest rates; less favorable terms, conditions,
or requirements; or more arduous administration of foreclosure, late charges,
or penalties. |
| ↑ top |
Right to
Financial Privacy Act
This act establishes
procedures for the release financial records of consumers to government
authorities.
This act provides customers of financial institutions
have a right to expect that their financial activities will have a reasonable
amount of privacy from federal government scrutiny. The act establishes
specific procedures and exceptions concerning the release of customer financial
records to the federal government. |
| |
Real Estate
Settlement Procedures Act
This act requires
lenders to provide consumers with information concerning the costs involved in
residential mortgages before they obtain their loan.
One of the
provisions of this act requires that consumers be provided with pertinent and
timely disclosures regarding the nature and costs of the real estate settlement
process. The act also protects consumers against certain abusive practices,
such as kickbacks, and sets limitations on the use of escrow accounts. The act
requires disclosures for mortgage escrow accounts at closing and annually
thereafter. Disclosures are required to itemized charges paid by the borrower
and what is paid by the servicer from escrow account. |
| ↑ top |
|
|
|
|
