Reduction in Annual Percentage Rate (Interpretation of Regulation Z), Circular No. 70-83
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FEDERAL RESERVE BANK OF DALLAS DALLAS. TEXAS 75222 Circular No. 70-83 April 2, 1970 REDUCTION IN ANNUAL PERCENTAGE RATE (INTERPRETATION OF REGULATION Z) To Banks, Other Financial Institutions, Trade Associations, and Others concerned in the Eleventh Federal Reserve District: Quoted below is a press release issued by the Board of Governors of the Federal Reserve System on March 31? 1970: "The Board of Governors of the Federal Reserve System today issued the attached interpretation of one provision in its Truth in Lending Regulation Z. The interpretation specifies that when the annual percentage rate on outstanding credit is reduced, but other credit terms remain the same, the new rate may be provided to the customer without making a complete new set of disclosures." The text of the interpretation is printed on the reverse. Yours very truly, P. E. Coldwell President This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library ([email protected])
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TITLE 12 - BANKS AND BANKING CHAPTER II - FEDERAL RESERVE SYSTEM SUBCHAPTER A - BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (Reg. Z) PART 226 - TRUTH IN LENDING REDUCTION IN ANNUAL PERCENTAGE RATE Section 226.817 Reduction In Annual Percentage Rate (a) Section 226.8(j) specifies that if any existing extension of credit is refinanced, such transaction shall be considered a new trans action subject to the disclosure requirements of Regulation Z. The question arises as to whether a reduction in the annual percentage rate applicable to an existing extension of credit, when no other credit terms are changed, constitutes a refinancing under section 226.8(j). (b) When no other credit terms are changed, a reduction in the annual percentage rate applicable to an existing extension of credit does not constitute a refinancing under section 226.8(j), and no disclosures are required.
(interprets and applies 15 U.S.C. 1638 and 15 U.S.C. 1639) By order of the Board of Governors, March 315 1970. (Signed) Kenneth A. Kenyon Kenneth A. Kenyon, Deputy Secretary.