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Changes Proposed to Regulation Z's Credit Disclosures

Monday, October 1, 2007

The Federal Reserve Board wants more effective disclosures for consumers from credit-card accounts and other revolving credit plans as part of its sweeping review of open-end credit rules. To that end, the Board has proposed amendments to Regulation Z (Truth in Lending), and you have a chance to comment on the proposal until Oct. 12.

The amendments, based on consumer testing feedback, focus on the rules for open-end credit accounts that are primarily general purpose and retail credit-card plans. In short, the changes are designed to make disclosures and information more understandable for consumers.

The proposal would require changes to the format, timing and content of disclosures for credit-card applications and solicitations. It would also change the information that consumers receive throughout the life of an open-end account, including account-opening and periodic statements.

In addition, disclosures with credit-card applications and solicitations would highlight fees and penalty rates. Creditors would be required to summarize key terms at account opening and a change in terms. Periodic statements would identify costs for interest and fees.

Two alternatives are being considered for the effective or historical annual percentage rate disclosed on periodic statements. The proposal would also increase the circumstances under which consumers receive written notice of changes in terms to their accounts. For more information or to comment, go to