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Jan 14, 2010
Categories: Consumer Lending

Regulation Z Final Rule - Sections Effective February 22, 2010

Posted by Steve Van Beek

Due to the size and scope of the recent final rule from the Federal Reserve, we have attempted to organize the new requirements into [somewhat] manageable sections.  Keep in mind that the sections below do not attempt to cover every requirement of the Regulation Z amendments but, rather, aim to organize the final rule so that credit union professionals can review and analyze the requirements in a more efficient manner.

As Anthony mentioned yesterday, some of the amendments have mandatory compliance dates of February 22, 2010 and others have mandatory compliance dates of July 1, 2010.  In order to prevent confusion, this posting only lists sections with mandatory compliance dates of February 22, 2010.

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What does this blog post do?

It cuts apart the 1155-page final rule and splits it into separate PDF documents.  Each section listed below has links to 3 PDF documents (some have 4 including model forms) which pinpoint where the particular requirement is discussed in the Federal Reserve's monster document.  Thus, if you want to work on understanding the new opt-in for over-the-limit fees you can click on the links under that subsection to review the relevant material without being distracted by other requirements.

What is in each PDF document? 

Regulatory Text - these PDFs contain that actual regulatory text of Regulation Z.

Official Staff Commentary - these PDFs contain the Federal Reserve's staff commentary which is the Fed's guidance in plain-English.  The commentary is a very useful tool to analyze for clarity regarding the requirements.

Preamble - these PDFs contain the Fed's section-by-section analysis of the new requirements.  The preamble discusses the proposed rule, comment letters received, and the rationale behind the Fed's decision to regulate (or not regulate) in a certain way.  The preamble can be an extremely important resource to understand the background behind the requirements. 

Note: The references to the Credit CARD Act simply identify the legal authority for the requirement.

Regulation Z - Requirements Effective February 22, 2010

Periodic Statements Sent 21-days Before Due Date
Regulation Z: 12 CFR 226.5(b)(2) Credit CARD Act: Section 106(b)

Late Payment Disclosures on Periodic Statements
Regulation Z: 12 CFR 226.7(b)(11) Credit CARD Act: Section 202

Repayment Disclosures on Periodic Statements – Minimum Payment Warning
Regulation Z: 12 CFR 226.7(b)(12) Credit CARD Act: Section 201

Format of Late Payment and Repayment Disclosures on Periodic Statements
Regulation Z: 12 CFR 226.7(b)(13) Credit CARD Act: Section 201

Subsequent Disclosures (i.e. Change-in-Terms Notices)
Regulation Z: 12 CFR 226.9(c)(2) Credit CARD Act: Section 101(a)

Disclosures Upon Renewal of Credit Card (incl. Annual Fees)

Regulation Z: 12 CFR 226.9(e) Credit CARD Act: Section 203

Increases in APR Due to 60-Day Delinquency
Regulation Z: 12 CFR 226.9(g) Credit CARD Act: Section 101(b)

Right to Reject Changes-in-Terms
Regulation Z: 12 CFR 226.9(h) Credit CARD Act: Section 101(a)

Crediting of Payments
Regulation Z: 12 CFR 226.10 Credit CARD Act: Sections 104; 106(a) & 102(a)
[Includes subsections on payments at branches, payments on days the CU is not open for business, fees related to method of payment, and changes of address by card issuers.]  See Bookmarks in PDFs.

Timely Settlement of Estates
Regulation Z: 12 CFR 226.11(c) Credit CARD Act: Section 504

Consideration of Ability to Repay & Issuing Cards to Consumers Under 21
Regulation Z: 12 CFR 226.51 Credit CARD Act: Sections 109; 301 & 303

Subprime Fees on Credit Cards

Regulation Z: 12 CFR 226.52 Credit CARD Act: Section 105

Payment Allocation - Amount Above Min Payment to Highest APR Balance
Regulation Z: 12 CFR 226.53 Credit CARD Act: Section 104

Double-Cycle Billing Prohibition
Regulation Z: 12 CFR 226.54 Credit CARD Act: Section 102

Restrictions on Increasing APRs on Existing Balances
Regulation Z: 12 CFR 226.55 Credit CARD Act: Section 101(b)

Opt-In Requirement Before Assessing Over-the-Limit Fees
Regulation Z:  12 CFR 226.56 Credit CARD Act: Section 102

Marketing to College Students & College CC Agreements
Regulation Z: 12 CFR 226.57 Credit CARD Act: Section 304

Internet Posting of Credit Card Agreements
Regulation Z: 12 CFR 226.58 Credit CARD Act: Section 204

And, as they used to say at the end of G.I. Joe cartoons: "Now you know, and knowing is half the battle."  If only that were true.

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