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6500 - FDIC Consumer Protection
Appendix A—Effect on State Laws
Request for determination
A request for a determination that a state law is inconsistent or
that a state law is substantially the same as the act and regulation
shall be in writing and addressed to the Secretary, Board of Governors
of the Federal Reserve System, Washington, D.C. 20551. The request
shall be made pursuant to the procedures herein and the Board's Rules
of Procedure (12 CFR Part 262).
Supporting documents
A request for a determination shall include the following items:
(1) The text of the state statute, regulation, or other document
that is the subject of the request.
(2) Any other statute, regulation, or judicial or administrative
opinion that implements, interprets, or applies the relevant provision.
(3) A comparison of the state law with the corresponding
provision of the federal law, including a full discussion of the basis
for the requesting party's belief that the state provision is either
inconsistent or substantially the same.
(4) Any other information that the requesting party believes may
assist the Board in its determination.
Public notice of determination
Notice that the Board intends to make a determination (either on
request or on its own motion) will be published in the Federal
Register, with an opportunity for public comment,
{{4-30-01 p.6670.05}}unless the Board finds that notice and
opportunity for comment would be impracticable, unnecessary, or
contrary to the public interest and publishes its reasons for such
decision.
Subject to the Board's Rules Regarding Availability of Information
(12 CFR Part 261), all requests made, including any documents and other
material submitted in support of the requests, will be made available
for public inspection and copying.
Notice after determination
Notice of a final determination will be published in the
Federal Register, and the Board will furnish a copy of such
notice to the party who made the request and to the appropriate state
official.
Reversal of determination
The Board reserves the right to reverse a determination for any
reason bearing on the coverage or effect of state or federal law.
Notice of reversal of a determination will be published in the
Federal Register and a copy furnished to the appropriate
state official.
[Codified to 12 C.F.R. Part 226, Appendix A]
[Appendix A amended at 46 Fed. Reg. 29246, June 1,
1981]
Appendix B—State Exemptions
Application
Any state may apply to the Board for a determination that a class of
transactions subject to state law is exempt from the requirements of
the act and this regulation. An application shall be in writing and
addressed to the Secretary, Board of Governors of the Federal Reserve
System, Washington, D.C. 20551, and shall be signed by the appropriate
state official. The application shall be made pursuant to the
procedures herein and the Board's Rules of Procedure (12 CFR Part 262).
Supporting documents
An application shall be accompanied by:
(1) The text of the state statute or regulation that is the
subject of the application, and any other statute, regulation, or
judicial or administrative opinion that implements, interprets, or
applies it.
(2) A comparison of the state law with the corresponding
provisions of the federal law.
(3) The text of the state statute or regulation that provides for
civil and criminal liability and administrative enforcement of the
state law.
(4) A statement of the provisions for enforcement,
including an identification of the state office that administers the
relevant law, information on the funding and the number and
qualifications of personnel engaged in enforcement, and a description
of the enforcement procedures to be followed, including information on
examination procedures, practices, and policies. If an exemption
application extends to federally chartered institutions, the
applicant
{{12-31-87 p.6671}}must furnish evidence that arrangements
have been made with the appropriate federal agencies to ensure adequate
enforcement of state law in regard to such creditors.
(5) A statement of reasons to support the applicant's claim that
an exemption should be granted.
Public notice of application
Notice of an application will be published, with an opportunity for
public comment, in the Federal Register, unless the Board
finds that notice and opportunity for comment would be impracticable,
unnecessary, or contrary to the public interest and publishes its
reasons for such decision.
Subject to the Board's Rules Regarding Availability of Information
(12 CFR Part 261), all applications made, including any documents and
other material submitted in support of the applications, will be made
available for public inspection and copying. A copy of the application
also will be made available at the Federal Reserve Bank of each
district in which the applicant is situated.
Favorable determination
If the Board determines on the basis of the information before it
that an exemption should be granted, notice of the exemption will be
published in the Federal Register, and a copy furnished to
the applicant and to each federal official responsible for
administrative enforcement.
The appropriate state official shall inform the Board within 30 days
of any change in its relevant law or regulations. The official shall
file with the Board such periodic reports as the Board may require.
The Board will inform the appropriate state official of any
subsequent amendments to the federal law, regulation, interpretations,
or enforcement policies that might require an amendment to state law,
regulation, interpretations, or enforcement procedures.
Adverse determination
If the Board makes an initial determination that an exemption should
not be granted, the Board will afford the applicant a reasonable
opportunity to demonstrate further that an exemption is proper. If the
Board ultimately finds that an exemption should not be granted, notice
of an adverse determination will be published in the Federal
Register and a copy furnished to the applicant.
Revocation of exemption
The Board reserves the right to revoke an exemption if at any time
it determines that the standards required for an exemption are not met.
Before taking such action, the Board will notify the appropriate
state official of its intent, and will afford the official such
opportunity as it deems appropriate in the circumstances to demonstrate
that revocation is improper. If the Board ultimately finds that
revocation is proper, notice of the Board's intention to revoke such
exemption will be published in the Federal Register with a
reasonable period of time for interested persons to comment.
Notice of revocation of an exemption will be published in the
Federal Register. A copy of such notice will be furnished to
the appropriate state official and to the federal officials responsible
for enforcement. Upon revocation of an exemption, creditors in that
state shall then be subject to the requirements of the federal law.
[Codified to 12 C.F.R. Part 226, Appendix
B]
Appendix C—Issuance of Staff Interpretations
Official staff interpretations
Officials in the Board's Division of Consumer and Community Affairs
are authorized to issue official staff interpretations of this
regulation. These interpretations provide the protection afforded under
§ 130(f) of the act. Except in
unusual circumstances, such interpretations will not be issued
separately but will be incorporated in an official commentary to the
regulation which will be amended periodically.
{{12-31-87 p.6672}}
Requests for issuance of official staff interpretations
A request for an official staff interpretation shall be in writing
and addressed to the Director, Division of Consumer and Community
Affairs, Board of Governors of the Federal Reserve System, Washington,
D.C. 20551. The request shall contain a complete statement of all
relevant facts concerning the issue, including copies of all pertinent
documents.
Scope of interpretations
No staff interpretations will be issued approving creditors' forms,
statements, or calculation tools or methods. This restriction does not
apply to forms, statements, tools, or methods whose use is required or
sanctioned by a government agency.
[Codified to 12 C.F.R. Part 226, Appendix C]
Appendix D—Multiple Advance Construction Loans
Section 226.17(c)(6)
permits creditors to treat multiple advance loans to finance
construction of a dwelling that may be permanently financed by the same
creditor either as a single transaction or as more than one
transaction. If the actual schedule of advances is not known, the
following methods may be used to estimate the interest portion of the
finance charge and the annual percentage rate and to make disclosures.
If the creditor chooses to disclose the construction phase separately,
whether interest is payable periodically or at the end of construction,
Part I may be used. If the creditor chooses to disclose the
construction and the permanent financing as one transaction, Part II
may be used.
Part I—Construction period disclosed separately.
A. If interest is payable only on the amount actually advanced for
the time it is outstanding:
1. Estimated interest--Assume that one-half of the commitment
amount is outstanding at the contract interest rate for the entire
construction period.
2. Estimated annual percentage rate--Assume a single payment loan
that matures at the end of the construction period. The finance charge
is the sum of the estimated interest and any prepaid finance charge.
The amount financed for computation purposes is determined by
subtracting any prepaid finance charge from one-half of the commitment
amount.
3. Repayment schedule--The number and amounts of any interest
payments may be omitted in disclosing the payment schedule under
§ 226.18(g). The fact that
interest payments are required and the timing of such payments shall be
disclosed.
4. Amount financed--The amount financed for disclosure purposes
is the entire commitment amount less any prepaid finance charge.
B. If interest is payable on the entire commitment amount without
regard to the dates or amounts of actual disbursement:
1. Estimated interest--Assume that the entire commitment amount
is outstanding at the contract interest rate for the entire
construction period.
2. Estimated annual percentage rate--Assume a single payment loan
that matures at the end of the construction period. The finance charge
is the sum of the estimated interest and any prepaid finance charge.
The amount financed for computation purposes is determined by
subtracting any prepaid finance charge from one-half of the commitment
amount.
3. Repayment schedule--Interest payments shall be disclosed in
making the repayment schedule disclosure under § 226.18(g).
4. Amount financed--The amount financed for disclosure purposes
is the entire commitment amount less any prepaid finance charge.
Example:
Assume a $50,000 loan commitment at 10.5% interest with a 5-month
construction period and a prepaid finance charge of 2
points.
{{2-28-06 p.6673}}
Part II—Construction and permanent financing disclosed as one
transaction.
A. The creditor shall estimate the interest payable during the
construction period to be included in the total finance charge as
follows:
1. If interest is payable only on the amount actually advanced
for the time it is outstanding, assume that one-half of the commitment
amount is outstanding at the contract interest rate for the entire
construction period.
2. If interest is payable on the entire commitment amount without
regard to the dates or amounts of actual disbursement, assume that the
entire commitment amount is outstanding at the contract rate for the
entire construction period.
B. The creditor shall compute the estimated annual
percentage rate as follows:
1. Estimated interest payable during the construction period
shall be treated for computation purposes as a prepaid finance charge
(although it shall not be treated as a prepaid finance charge for
disclosure purposes).
2. The number of payments shall not include any payments of
interest only that are made during the construction period.
3. The first payment period shall consist of one-half of the
construction period plus the period between the end of the construction
period and the first amortization payment.
C. The creditor shall disclose the repayment schedule as
follows:
1. For loans under paragraph A.1. of Part II, without reflecting
the number or amounts of payments of interest only that are made during
the construction period. The fact that interest payments must be made
and the timing of such payments shall be disclosed.
2. For loans under paragraph A.2. of Part II, including any
payments of interest only that are made during the construction period.
D. The creditor shall disclose the amount financed as the
entire commitment amount less any prepaid finance charge.
Example:
Assume a $50,000 loan commitment at 10.5% interest with a 5-month
construction period and a prepaid finance charge of 2 points, followed
by 30-year permanent financing at the same rate with monthly
amortization payments of $457.37.
{{2-28-06 p.6674}}
[Codified to 12 C.F.R. Part 226, Appendix D]
[Appendix D amended at 46 Fed. Reg. 29246, June 1,
1981]
Appendix E—Rules for Card Issuers That Bill on a
Transaction-by-Transaction Basis
The following provisions of Subpart B apply if credit cards are
issued and (1) the card issuer and the seller are the same or related
persons; (2) no finance charge is imposed; (3) consumers are billed in
full for each use of the card on a transaction-by-transaction
basis,
{{10-31-00 p.6675}}by means of an invoice or other
statement reflecting each use of the card; and (4) no cumulative
account is maintained which reflects the transactions by each consumer
during a period of time, such as a month:
Section 226.6(d), and,
as applicable, § 226.6(b) and (c). The disclosure required by
§ 226.6(b) shall be limited to those charges that are or may be
imposed as a result of the deferral of payment by use of the card, such
as late payment or delinquency charges.
Section 226.7(b) and
§ 226.7(k). Creditors may comply by placing the required
disclosures on the invoice or statement sent to the consumer for each
transaction.
Section
226.9(a). Creditors may comply by mailing or delivering
the statement required by § 226.6(d) (See Appendix G-3) to each
consumer receiving a transaction invoice during a one-month period
chosen by the card issuer or by sending either the statement prescribed
by § 226.6(d) or an alternative billing error rights statement
substantially similar to that in Appendix G-4, with each invoice sent
to a consumer.
Section 226.9(c).
Section 226.10.
Section
226.11. This section applies when a card issuer receives
a payment or other credit that exceeds by more than $1 the amount due,
as shown on the transaction invoice. The requirement to credit amounts
to an account may be complied with by other reasonable means, such as
by a credit memorandum. Since no periodic statement is provided, a
notice of the credit balance shall be sent to the consumer within a
reasonable period of time following its occurrence unless a refund of
the credit balance is mailed or delivered to the consumer within 7
business days of its receipt by the card issuer.
Section 226.12 including § 226.12(c) and (d), as
applicable. Section 226.12(e) is inapplicable.
Section 226.13, as applicable. All references to
"periodic statement" shall be read to indicate the invoice or
other statement for the relevant transaction. All actions with regard
to correcting and adjusting a consumer's account may be taken by
issuing a refund or a new invoice, or by other appropriate means
consistent with the purposes of the section.
Section 226.15, as applicable.
[Codified to 12 C.F.R. Part 226, Appendix E]
[Appendix E amended at 46 Fed. Reg. 60190, December 9,
1981]
Appendix F—Annual Percentage Rate Computations for Certain
Open-End Credit Plans
In determining the denominator of the fraction under
§ 226.14(c)(3), no amount will be used more than once when adding the
sum of the balances 1
subject to periodic rates to the sum of the amounts subject to specific
transaction charges. In every case, the full amount of transactions
subject to specific transaction charges shall be included in the
denominator. Other balances or parts of balances shall be included
according to the manner of determining the balance subject to a
periodic rate, as illustrated in the following examples of accounts on
monthly billing cycles:
1. Previous balance--none.
A specific transaction of $100 occurs on the first day of the
billing cycle. The average daily balance is $100. A specific
transaction charge of 3% is applicable to the specific transaction.
The periodic rate is 11/2% applicable to the average daily
balance. The numerator is the amount of the finance charge, which is
$4.50. The denominator is the amount of the transaction (which is
$100), plus the amount by which the balance subject to the periodic
rate exceeds the amount of the specific transactions (such excess in
this case is 0), totaling $100.
The annual percentage rate is the quotient (which is 41/2%)
multiplied by 12 (the number of months in a year), i.e.,
54%.
{{10-31-00 p.6676}}
2. Previous balance--$100.
A specific transaction of $100 occurs at the midpoint of the billing
cycle. The average daily balance is $150. A specific transaction charge
of 3% is applicable to the specific transaction. The periodic rate is
11/2% applicable to the average daily balance. The numerator is
the amount of the finance charge which is $5.25. The denominator is the
amount of the transaction (which is $100), plus the amount by which the
balance subject to the periodic rate exceeds the amount of the specific
transaction (such excess in this case is $50), totaling $150. As
explained in example 1, the annual percentage rate is 31/2% ×
12 = 42%.
3. If, in example 2, the periodic rate applies only to the
previous balance, the numerator is $4.50 and the denominator is $200
(the amount of the transaction, $100, plus the balance subject only to
the periodic rate, the $100 previous balance). As explained in example
1, the annual percentage rate is 21/4% × 12 = 27%.
4. If, in example 2, the periodic rate applies only to an
adjusted balance (previous balance less payments and credits) and the
consumer made a payment of $50 at the midpoint of the billing cycle,
the numerator is $3.75 and the denominator is $150 (the amount of the
transaction, $100, plus the balance subject to the periodic rate, the
$50 adjusted balance). As explained in example 1, the annual percentage
rate is 21/2% × 12 = 30%.
5. Previous balance--$100.
A specific transaction (check) of $100 occurs at the midpoint of the
billing cycle. The average daily balance is $150. The specific
transaction charge is $.25 per check. The periodic rate is
11/2% applied to the average daily balance. The numerator is
the amount of the finance charge, which is $2.50 and includes the $.25
check charge and the $2.25 resulting from the application of the
periodic rate. The denominator is the full amount of the specific
transaction (which is $100) plus the amount by which the average daily
balance exceeds the amount of the specific transaction (which in this
case is $50), totaling $150. As explained in example 1, the annual
percentage rate would 12/3% × 12 = 20%.
6. Previous balance--none.
A specific transaction of $100 occurs at the midpoint of the billing
cycle. The average daily balance is $50. The specific transaction
charge is 3% of the transaction amount or $3.00. The periodic rate is
11/2% per month applied to the average daily balance. The
numerator is the amount of the finance charge, which is $3.75,
including the $3.00 transaction charge and $.75 resulting from
application of the periodic rate. The denominator is the full amount of
the specific transaction ($100) plus the amount by which the balance
subject to the periodic rate exceeds the amount of the transaction
($0). Where the specific transaction amount exceeds the balance subject
to the periodic rate, the resulting number is considered to be zero
rather than a negative number ($50 -- $100 = -- $50). The denominator,
in this case, is $100. As explained in example 1, the annual percentage
rate is 33/4% × 12 = 45%.
[Codified to 12 C.F.R. Part 226, Appendix
F]
Appendix G—Open-End Model Forms and Clauses
G--1 Balance-Computation Methods Model Clauses (§§ 226.6 and
226.7)
G--2 Liability for Unauthorized Use Model Clause (§ 226.12)
G--3 Long-Form Billing-Error Rights Model Form (§§ 226.6 and
226.9)
G--4 Alternative Billing-Error Rights Model Form (§ 226.9)
G--5 Rescission Model Form (When Opening an Account) (§ 226.15)
G--6 Rescission Model Form (For Each Transaction) (§ 226.15)
G--7 Rescission Model Form (When Increasing the Credit Limit)
(§ 226.15)
G--8 Rescission Model Form (When Adding a Security Interest)
(§ 226.15)
G--9 Rescission Model Form (When Increasing the Security)
(§ 226.15)
G--10(A) Applications and Solicitations Model Forms (Credit Cards)
(§ 226.5a(b))
G--10(B) Applications and Solicitations Sample (Credit Card)
(§ 226.5a(b))
G--10(C) Applications and Solicitations Model Form (Charge Cards)
(§ 226.5a(b))
{{4-30-01 p.6676.01}}
G--11 Applications and Solicitations Made Available to General
Public Model Clauses (§ 226.5a(e))
G--12 Charge Card Model Clause (When Access to Plan Offered by
Another) (§ 226.5a(f))
G--13(A) Change in Insurance Provider Model Form (Combined Notice)
(§ 226.9(f))
G--13(B) Change in Insurance Provider Model Form (§ 226.9(f)(2))
G--14A Home Equity Sample
G--14B Home Equity Sample
G--15 Home Equity Model Clauses
G–1—BALANCE COMPUTATION METHODS MODEL
CLAUSES
(a) Adjusted balance method
We figure [a portion of] the finance charge on your account by
applying the periodic rate to the "adjusted balance" of your
account. We get the "adjusted balance" by taking the balance you
owed at the end of the previous billing cycle and subtracting [any
unpaid finance charges and] any payments and credits received during
the present billing cycle.
(b) Previous balance method
We figure [a portion of] the finance charge on your account by
applying the periodic rate to the amount you owe at the beginning of
each billing cycle [minus any unpaid finance charges.] We do not
subtract any payments or credits received during the billing cycle.
[The amount of payments and credits to your account this billing cycle
was $ _______.]
(c) Average daily balance method (excluding current
transactions)
We figure [a portion of] the finance charge on your account by
applying the periodic rate to the "average daily balance" of your
account (excluding current transactions). To get the "average daily
balance" we take the beginning balance of your account each day and
subtract any payments or credits [and any unpaid finance
charges]. We do not add in any new [purchases/advances/loans]. This
gives us the daily balance. Then, we add all the daily balances for the
billing cycle together and divide the total by the number of days in
the billing cycle. This gives us the "average daily balance."
(d) Average daily balance method (including current
transactions)
We figure [a portion of] the finance charge on your account by
applying the periodic rate to the "average daily balance" of your
account (including current transactions). To get the "average daily
balance" we take the beginning balance of your account each day, add
any new [purchases/advances/loans], and subtract any payments or
credits, [and unpaid finance charges]. This gives us the daily
balance. Then, we add up all the daily balances for the billing cycle
and divide the total by the number of days in the billing cycle. This
gives us the "average daily balance."
(e) Ending balance method
We figure [a portion of] the finance charge on your
account by applying the periodic rate to the amount you owe at the end
of each cycle (including new purchases and deducting payments and
credits made during the billing cycle).
G–2—LIABILITY FOR UNAUTHORIZED USE
MODEL CLAUSE
You may be liable for the unauthorized use of your credit card [or
other term that describes the credit card.] You will not be liable for
unauthorized use that occurs after you notify [name of card issuer or
its designee] at [address], orally or in writing, of the
loss, theft, or possible unauthorized use. In any case, your liability
will not exceed [insert $50 or any lesser amount under agreement with
the cardholder.]
{{4-30-01 p.6676.02}}
G–3—LONG FORM BILLING ERROR RIGHTS MODEL FORM
YOUR BILLING RIGHTS
KEEP THIS NOTICE FOR FUTURE USE
This notice contains important information about your rights and our
responsibilities under the Fair Credit Billing Act.
Notify Us In Case of Errors or Questions About Your
Bill
If you think your bill is wrong, or if you need more
information about a transaction on your bill, write us [on a separate
sheet] at [address] [the address listed on your bill]. Write to us
as soon as possible. We must hear from you no later than 60 days after
we sent you the first bill on which the error or problem appeared. You
can telephone us, but doing so will not preserve your rights.
In your letter, give us the following information:
• Your name and account number.
• The dollar amount of the suspected error.
• Describe the error and explain, if you can, why you
believe there is an error. If you need more information, describe the
item you are not sure about.
If you have authorized us to pay your credit card bill automatically
from your savings or checking account, you can stop the payment on any
amount you think is wrong. To stop the payment your letter must reach
us three business days before the automatic payment is scheduled to
occur.
Your Rights and Our Responsibilities After We Receive
Your Written Notice
We must acknowledge your letter within 30 days, unless we
have corrected the error by then. Within 90 days, we must either
correct the error or explain why we believe the bill was correct.
After we receive your letter, we cannot try to collect any amount you
question, or report you as delinquent. We can continue to bill you for
the amount you question, including finance charges, and we can apply
any unpaid amount against your credit limit. You do not have to pay any
questioned amount while we are investigating, but you are still
obligated to pay the parts of your bill that are not in question.
If we find that we made a mistake on your bill, you will not have to
pay any finance charges related to any questioned amount. If we didn't
make a mistake, you may have to pay finance charges, and you will have
to make up any missed payments on the questioned amount. In either
case, we will send you a statement of the amount you owe and the date
that it is due.
If you fail to pay the amount that we think you owe, we may report
you as delinquent. However, if our explanation does not satisfy you and
you write to us within ten days telling us that you still refuse to
pay, we must tell anyone we report you to that you have a question
about your bill. And, we must tell you the name of anyone we reported
you to. We must tell anyone we report you to that the matter has been
settled between us when it finally is.
If we don't follow these rules, we can't collect the first $50 of the
questioned amount, even if your bill was correct.
Special Rule for Credit Card Purchases
If you have a problem with the quality of property or services that
you purchased with a credit card, and you have tried in good faith to
correct the problem with the merchant, you may have the right not to
pay the remaining amount due on the property or services. There are two
limitations on this right:
(a) You must have made the purchase in your home state or, if
not within your home state, within 100 miles of your current mailing
address; and
(b) The purchase price must have been more than $50.
These limitations do not apply if we own or operate the merchant, or
if we mailed you the advertisement for the property or services.
G–4—ALTERNATIVE BILLING ERROR RIGHTS
MODEL FORM
BILLING RIGHTS SUMMARY
In Case of Errors or Questions About Your Bill
If you think your bill is wrong, or if you need more
information about a transaction on your bill, write us [on a
separate sheet] at [address] [the address shown on your bill] as
soon as possible. We must hear from you no later than 60 days after we
sent you the first bill on which the error or problem
{{4-30-01 p.6676.03}}appeared. You can telephone us, but
doing so will not preserve your rights.
In your letter, give us the following information:
• Your name and account number.
• The dollar amount of the suspected error.
• Describe the error and explain, if you can, why you
believe there is an error. If you need more information, describe the
item you are unsure about.
You do not have to pay any amount in question while we are
investigating, but you are still obligated to pay the parts of your
bill that are not in question. While we investigate your question, we
cannot report you as delinquent or take any action to collect
the amount you question.
Special Rule for Credit Card Purchases
If you have a problem with the quality of goods or services that you
purchased with a credit card, and you have tried in good faith to
correct the problem with the merchant, you may not have to pay the
remaining amount due on the goods or services. You have this protection
only when the purchase price was more than $50 and the purchase was
made in your home state or within 100 miles of your mailing address.
(If we own or operate the merchant, or if we mailed you the
advertisement for the property or services, all purchases are covered
regardless of amount or location of purchase.)
G–5—RESCISSION MODEL FORM (WHEN OPENING AN
ACCOUNT)
NOTICE OF RIGHT TO CANCEL
1. Your Right to Cancel.
We have agreed to establish an open-end credit account for you, and
you have agreed to give us a [mortgage/lien/security interest]
[on/in] your home as security for the account. You have a legal right
under federal law to cancel the account, without cost, within three
business days after the latest of the following events:
(1) the opening date of your account which is _______ ; or
(2) the date you received your Truth-in-Lending disclosures;
or
(3) the date you received this notice of your right to cancel
the account.
If you cancel the account, the [mortgage/lien/security interest]
[on/in] your home is also cancelled. Within 20 days of receiving your
notice, we must take the necessary steps to reflect the fact that the
[mortgage/lien/security interest] [on/in] your home has been
cancelled. We must return to you any money or property you have given
to us or to anyone else in connection with the account.
You may keep any money or property we have given you until we have
done the things mentioned above, but you must then offer to return the
money or property, if it is impractical or unfair for you to return the
property, you must offer its reasonable value. You may offer to
return the property at your home or at the location of the property.
Money must be returned to the address shown below. If we do not take
possession of the money or property within 20 calendar days of your
offer, you may keep it without further obligation.
2. How to Cancel.
If you decide to cancel the account, you may do so by notifying us,
in writing, at
(creditor's name and business address).
You may use any written statement that is signed and dated by you
and states your intention to cancel, or you may use this notice by
dating and signing below. Keep one copy of this notice no matter how
you notify us because it contains important information about your
rights.
If you cancel by mail or telegram, you must send the notice no later
than midnight
of (date) (or
midnight of the third business day following the latest of the three
events listed above). If you send or deliver your written notice to
cancel some other way, it must be delivered to the above address no
later than that time. I WISH TO CANCEL.
____________________________________________
Consumer's Signature Date
{{4-30-01 p.6677}}
G–6—RESCISSION MODEL FORM (FOR EACH
TRANSACTION)
NOTICE OF RIGHT TO CANCEL
1. Your Right to Cancel.
We have extended credit to you under your open-end credit account.
This extension of credit will increase the amount you owe on your
account. We already have a [ mortgage/lien/security interest]
[on/in] your home as security for your account. You have a legal
right under federal law to cancel the extension of credit, without
cost, within three business days after the latest of the following
events:
(1) the date of the additional extension of credit which is _______ ; or
(2) the date you received your Truth-in-Lending disclosures;
or
(3) the date you received this notice of your right to cancel
the additional extension of credit.
If you cancel the additional extension of credit, your cancellation
will only apply to the additional amount and to any increase in the
[mortgage/lien/security interest] that resulted because of the
additional amount. It will not affect the amount you presently owe, and
it will not affect the [mortgage/lien/security interest] we already
have [on/in] your home. Within 20 calendar days after we receive your
notice of cancellation, we must take the necessary steps to reflect the
fact that any increase in the [mortgage/lien/security interest]
[on/in] your home has been cancelled. We must also return to you any
money or property you have given to us or to anyone else in connection
with this extension of credit.
You may keep any money or property we have given you until we have
done the things mentioned above, but you must then offer to return the
money or property. If it is impractical or unfair for you to return the
property, you must offer its reasonable value. You may offer to return
the property at your home or at the location of the property. Money
must be returned to the address shown below. If we do not take
possession of the money or property within 20 calendar days of your
offer, you may keep it without further obligation.
2. How to Cancel.
If you decide to cancel the additional extension of credit, you may
do so by notifying us, in writing, at
(creditor's name and business address).
You may use any written statement that is signed and dated by you
and states your intention to cancel, or you may use this notice by
dating and signing below. Keep one copy of this notice no matter how
you notify us because it contains important information about your
rights.
If you cancel by mail or telegram, you must send the notice no
later than midnight of (date) (or midnight of the
third business day following the latest of the three events listed
above). If you send or deliver your written notice to cancel some other
way, it must be delivered to the above address no later than that time.
I WISH TO CANCEL.
____________________________________________
Consumer's Signature Date
G–7—RESCISSION MODEL FORM (WHEN INCREASING THE
CREDIT LIMIT)
NOTICE OF RIGHT TO CANCEL
1. Your Right to Cancel.
We have agreed to increase the credit limit on your open-end
credit account. We have a [mortgage/lien/security interest] [on/in]
your home as security for your account. Increasing the credit
limit will increase the amount of the [mortgage/lien/security
interest] [on/ in] your home. You have a legal right under
federal law to cancel the increase in your credit limit, without cost,
within three business days after the latest of the following events:
(a) the date of the increase in your credit limit which
is _______ ; or
(2) the date you received your Truth-in-Lending
disclosures; or
{{4-30-01 p.6678}}
(3) the date you received this notice of your right to cancel
the increase in your credit limit.
If you cancel, your cancellation will apply only to the increase in
your credit limit and to the [mortgage/lien/security interest] that
resulted from the increase in your credit limit. It will not affect the
amount you presently owe, and it will not affect the
[mortgage/lien/security interest] we already have [on/in] your
home. Within 20 calendar days after we receive your notice of
cancellation, we must take the necessary steps to reflect the fact that
any increase in the [mortgage/lien/security interest] [on/in] your
home has been cancelled. We must also return to you any money or
property you have given to us or to anyone else in connection with this
increase.
You may keep any money or property we have given you until we have
done the things mentioned above, but you must then offer to return the
money or property. If it is impractical or unfair for you to return the
property, you must offer its reasonable value. You may offer to return
the property at your home or at the location of the property. Money
must be returned to the address shown below. If we do not take
possession of the money or property within 20 calendar days of
your offer, you may keep it without further obligation.
2. How to Cancel.
If you decide to cancel the increase in your credit limit, you may
do so by notifying us, in writing, at (creditor's name and business address).
You may use any written statement that is signed and dated by you
and states your intention to cancel, or you may use this notice by
dating and signing below. Keep one copy of this notice no matter how
you notify us because it contains important information about your
rights.
If you cancel by mail or telegram, you must send the notice no
later than midnight of (date) (or midnight of the
third business day following the latest of the three events listed
above). If you send or deliver your written notice to cancel some other
way, it must be delivered to the above address no later than that time.
I WISH TO CANCEL.
____________________________________________
Consumer's Signature Date
G–8—RESCISSION MODEL FORM (WHEN ADDING A SECURITY
INTEREST)
NOTICE OF RIGHT TO CANCEL
1. Your Right to Cancel.
You have agreed to give us a [mortgage/lien/security interest]
[on/in] your home as security for your existing open-end credit
account. You have a legal right under federal law to cancel the
[mortgage/lien/security interest], without cost, within three
business days after the latest of the following events:
(1) the date of the [mortgage/lien/security interest] which
is _______ ; or
(2) the date you received your Truth-in-Lending disclosures; or
(3) the date you received this notice of your right to cancel
the [mortgage/lien/security interest].
If you cancel the [mortgage/lien/security interest], your
cancellation will apply only to the [mortgage/lien/security
interest]. It will not affect the amount you owe on your
account. Within 20 calendar days after we receive your notice of
cancellation, we must take the necessary steps to reflect that any
[mortgage/lien/security interest] [on/in] your home has been
cancelled. We must also return to you any money or property you have
given to us or to anyone else in connection with this increase.
You may keep any money or property we have given you until we have
done the things mentioned above, but you must then offer to return the
money or property. If it is impractical or unfair for you to return the
property, you must offer its reasonable value. You may make the offer
at your home or at the location of the property. Money must be returned
to the address shown below. If we do not take possession of the money
or property within 20 calendar days of your offer, you may keep it
without further obligation.
{{4-30-01 p.6678.01}}
2. How to Cancel.
If you decide to cancel the [mortgage/lien/security interest],
you may do so by notifying us, in writing, at
(creditor's name and business address).
You may use any written statement that is signed and dated by you
and states your intention to cancel, or you may use this notice by
dating and signing below. Keep one copy of this notice no matter how
you notify us because it contains important information about your
rights.
If you cancel by mail or telegram, you must send the notice no
later than midnight of (date) (or midnight of the
third business day following the latest of the three events listed
above). If you send or deliver your written notice to cancel some other
way, it must be delivered to the above address no later than that time.
I WISH TO CANCEL.
______________
Consumer's Signature Date
G–9—RESCISSION MODEL FORM (WHEN INCREASING THE
SECURITY)
NOTICE OF RIGHT TO CANCEL
1. Your Right to Cancel.
You have agreed to increase the amount of the
[mortgage/lien/security interest] [on/in] your home that we hold as
security for your open-end credit account. You have a legal right under
federal law to cancel the increase, without cost, within three business
days after the latest of the following events:
(1) the date of the increase in the security which
is _______ ; or
(2) the date you received your Truth-in-Lending disclosures;
or
(3) the date you received this notice of your right to cancel
the increase in the security.
If you cancel the increase in the security, your cancellation will
apply only to the increase in the amount of the
[mortgage/lien/security interest]. It will not affect the amount you
presently owe on your account, and it will not affect the
[mortgage/lien/security interest] we already have [on/in] your
home. Within 20 calendar days after we receive your notice of
cancellation, we must take the necessary steps to reflect that any
increase in the [mortgage/lien/security interest] [on/in] your home
has been cancelled. We must also return to you any money or property
you have given to us or to anyone else in connection with this
increase.
Your may keep any money or property we have given you until we have
done the things mentioned above, but you must then offer to
return the money or property. If it is impractical or unfair for you to
return the property, you must offer its reasonable value. You may offer
to return the property at your home or at the location of the property.
Money must be returned to the address shown below. If we do not take
possession of the money or property within 20 calendar days of your
offer, you may keep it without further obligation.
2. How to Cancel.
If you decide to cancel the increase in security, you may do so by
notifying us, in writing, at
(creditor's name and business address).
You may use any written statement that is signed and dated by you
and states your intention to cancel, or you may use this notice by
dating and signing below. Keep one copy of this notice no matter how
you notify us because it contains important information about your
rights.
If you cancel by mail or telegram, you must send the notice no
later than midnight of (date) (or midnight of the
third business day following the latest of the three events listed
above). If you send or deliver your written notice to cancel some other
way, it must be delivered to the above address no later than that time.
I WISH TO CANCEL.
______________
Consumer's Signature Date
{{4-30-01 p.6678.02}}
G–10(A)—APPLICATIONS AND SOLICITATIONS MODEL FORM (CREDIT
CARDS)
G-10(A)-APPLICATIONS AND SOLICITATIONS MODEL FORM (CREDIT CARDS) (pdf)
(59Kb, PDF File - PDF help or hard copy)
G–10(B)—APPLICATION AND SOLICITATIONS SAMPLE (CREDIT
CARDS)
G-10(B)-APPLICATIONS AND SOLICITATIONS SAMPLE (CREDIT CARDS) (pdf)
(57Kb, PDF File - PDF help or hard copy)
{{6-30-89 p.6678.03}}
G–10(C)—APPLICATIONS AND SOLICITATIONS MODEL FORM (CHARGE
CARDS)
G–11—APPLICATIONS AND SOLICITATIONS MADE AVAILABLE
TO GENERAL PUBLIC MODEL CLAUSES
(a) Disclosure of Required Credit Information
The information about the costs of the card described in this
[application] [solicitation]is accurate as of (month/year).
This information may have changed after that date. To find out
what may have changed, [call us at (telephone number)]
[write to use at (address)].
(b) Disclosure With Account Opening Statement
To find out about changes in the information in this [application]
[solicitation], [call us at (telephone number)] [write
to us at (address) ].
(c) No Disclosure of Credit Information
There are costs associated with the use of this card. To obtain
information about these costs, call us at (telephone number)
or write to us at (address).
G–12—CHARGE CARD MODEL CLAUSE (WHEN ACCESS TO PLAN OFFERED
BY ANOTHER)
This charge card may allow you to access credit offered by another
creditor. Our decision about issuing you a charge card will be
independent of the other creditor's decision about allowing you access
to a line of credit. Therefore, approval by us to issue you a card does
not constitute approval by the other creditor to grant you credit
privileges. If we issue you a charge card, you may receive it before
the other creditor decides whether or not to grant you credit
privileges.
G–13(A)—CHANGE IN INSURANCE PROVIDER MODEL FORM (COMBINED
NOTICE)
The credit card account you have with us is insured. This is to
notify you that we plan to replace your current coverage with insurance
coverage from a different insurer.
If we obtain insurance for your account from a different insurer,
you may cancel the insurance.
[Your premium rate will increase to
$ _______ per _______ .]
[Your coverage will be affected by the following:
 The elimination of a type of coverage previously provided
to you. [(explanation)] [See _______ of the
attached policy for details.]
A lowering of the age at which your coverage will terminate
or will become more restrictive. [(explanation)]
[See _______ of the attached policy or certificate for
details.]
A decrease in your maximum insurable loan balance, maximum
periodic benefit payment, maximum number of payments, or any other
decrease in the dollar amount
{{6-30-89 p.6678.04}}of your coverage or benefits.
[(explanation)] [See _______ of the attached policy
or certificate for details.]
A restriction on the eligibility for benefits for you or
others. [(explanation)] [See _______ of the
attached policy or certificate for details.]
A restriction in the definition of "disability" or
other key term of coverage. [(explanation)]
[See _______ of the attached policy or certificate for
details.]
The addition of exclusions or limitations that are broader
or other than those under the current coverage.
[(explanation)] [See _______ of the attached policy
or certificate for details.]
An increase in the elimination (waiting) period or a change
to nonretroactive coverage. [(explanation)]
[See _______ of the attached policy or certificate for
details).]
[The name and mailing address of the new insurer providing the
coverage for your account is (name and address).]
G–13(B)—CHANGE IN INSURANCE PROVIDER MODEL FORM
We have changed the insurer providing the coverage for your
account. The new insurer's name and address are (name and
address). A copy of the new policy or certificate is attached.
You may cancel the insurance for your account.
G–14A—HOME EQUITY SAMPLE
IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT
This disclosure contains important information about our Home Equity
Line of Credit. You should read it carefully and keep a copy for your
records.
Availability of Terms: To obtain the terms described
below, you must submit your application before January 1, 1990.
If these terms change (other than the annual percentage rate) and
you decide, as a result, not to enter into an agreement with us, you
are entitled to a refund of any fees that you have paid to us or anyone
else in connection with your application.
Security Interest: We will take a mortgage on your
home. You could lose your home if you do not meet the obligations in
your agreement with us.
Possible Actions: Under certain circumstances, we can
(1) terminate your line, require you to pay us the entire outstanding
balance in one payment, and charge you certain fees; (2) refuse to make
additional extensions of credit; and (3) reduce your credit limit.
If you ask, we will give you more specific information concerning
when we can take these actions.
Minimum Payment Requirements: You can obtain advances
of credit for 10 years (the "draw period"). During the draw
period, payments will be due monthly. Your minimum monthly payment will
equal the greater of $100 or 1/360th of the outstanding balance plus
the finance charges that have accrued on the outstanding balance.
After the draw period ends, you will no longer be able to obtain
credit advances and must pay the outstanding balance over 5 years (the
"repayment period"). During the repayment period, payments will
be due monthly. Your minimum monthly payment will equal 1/60th of the
balance that was outstanding at the end of the draw period plus the
finance charges that have accrued on the remaining balance.
Minimum Payment Example: If you made only the minimum
monthly payments and took no other credit advances, it would take 15
years to pay off a credit advance of $10,000 at an ANNUAL
PERCENTAGE
{{6-30-89 p.6678.05}}RATE of 12%. During that period, you
would make 120 monthly payments varying between $127.78 and $100.00
followed by 60 monthly payments varying between $187.06 and $118.08.
Fees and Charges: To open and maintain a line of
credit, you must pay the following fees to us:
• Application fee: $150 (due at application)
• Points: 1% of credit limit (due when account opened)
• Annual maintenance fee: $75 (due each year)
You also must pay certain fees to third parties to open a line.
These fees generally total between $500 and $900. If you ask, we will
give you an itemization of the fees you will have to pay to third
parties.
Minimum Draw and Balance Requirements: The minimum
credit advance you can receive is $500. You must maintain an
outstanding balance of at least $100.
Tax Deductibility: You should consult a tax advisor
regarding the deductibility of interest and charges for the line.
Variable-Rate Information: The line has a variable-rate
feature, and the annual percentage rate (corresponding to the periodic
rate) and the minimum payment can change as a result.
The annual percentage rate includes only interest and not other
costs.
The annual percentage rate is based on the value of an index. The
index is the monthly average prime rate charged by banks and is
published in the Federal Reserve Bulletin. To determine
the annual percentage rate that will apply to your line, we add a
margin to the value of the index.
Ask us for the current index value, margin and annual percentage
rate. After you open a credit line, rate information will be provided
on periodic statements that we will send you.
Rate Changes: The annual percentage rate can change
each month. The maximum ANNUAL PERCENTAGE RATE that can apply is 18%.
Except for this 18% "cap," there is no limit on the amount by
which the rate can change during any one-year period.
Maximum Rate and Payment Examples: If you had an
outstanding balance of $10,000 during the draw period, the minimum
monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be
$177.78. This annual percentage rate could be reached during the first
month of the draw period.
If you had an outstanding balance of $10,000 at the beginning of the
repayment period, the minimum monthly payment at the maximum ANNUAL
PERCENTAGE RATE of 18% would be $316.67. This annual percentage rate
could be reached during the first month of the repayment period.
Historical Example: The following table shows how the
annual percentage rate and the minimum monthly payments for a single
$10,000 credit advance would have changed based on changes in the index
over the past 15 years. The index values are from September of each
year. While only one payment amount per year is shown, payments would
have varied during each year.
The table assumes that no additional credit advances were taken,
that only the minimum payments were made each month, and that the rate
remained constant during each year. It does not necessarily indicate
how the index or your payments will change in the future.
{{6-30-89 p.6678.06}}
G–14B—HOME EQUITY SAMPLE
IMPORTANT TERMS OF OUR HOME EQUITY LINE OF CREDIT
This disclosure contains important information about our
Home Equity Line of Credit. You should read it carefully and keep a
copy for your records.
Availability of Terms: All of the terms
described below are subject to change.
If these terms change (other than the annual percentage rate) and
you decide, as a result, not to enter into an agreement with us, you
are entitled to a refund of any fees you paid to us or anyone else in
connection with your application.
Security Interest: We will take a mortgage on
your home. You could lose your home if you do not meet the obligations
in your agreement with us.
Possible Actions: We can terminate your line,
require you to pay us the entire outstanding balance in one payment,
and charge you certain fees if:
• You engage in fraud or material misrepresentation in connection
with the line.
• You do not meet the repayment terms.
• Your action or inaction adversely affects the collateral or our
rights in the collateral.
We can refuse to make additional extensions of credit or reduce your
credit limit if:
• The value of the dwelling securing the line declines
significantly below its appraised value for purposes of the line.
• We reasonably believe you will not be able to meet the
repayment requirements due to a material change in your financial
circumstances.
• You are in default of a material obligation in the agreement.
• Government action prevents us from imposing the annual
percentage rate provided for or impairs our security interest such that
the value of the interest is less than 120 percent of the credit line.
• A regulatory agency has notified us that continued advances
would constitute an unsafe and unsound practice.
• The maximum annual percentage rate is reached.
The initial agreement permits us to make certain changes to the
terms of the agreement at specified times or upon the occurrence of
specified events.
Minimum Payment Requirements: You can obtain
advances of credit for 10 years (the "draw period"). You can
choose one of three payment options for the draw period:
• Monthly interest-only payments. Under this
option, your payments will be due
{{6-30-89 p.6678.07}}monthly and will equal the finance
charges that accrued on the outstanding balance during the preceding
month.
• Quarterly interest-only payments. Under this
option, your payments will be due quarterly and will equal the finance
charges that accrued on the outstanding balance during the preceding
quarter.
• 2% of the balance. Under this option, your
payments will be due monthly and will equal 2% of the outstanding
balance on your line plus finance charges that accrued on the
outstanding balance during the preceding month.
If the payment determined under any option is less than $50, the
minimum payment will equal $50 or the outstanding balance on your line,
whichever is less.
Under both the monthly and quarterly interest-only payment options,
the minimum payment will not reduce the principal that is outstanding
on your line.
After the draw period ends, you will no longer be able to obtain
credit advances and must repay the outstanding balance (the
"repayment period"). The length of the repayment period will
depend on the balance outstanding at the beginning of it. During the
repayment period, payments will be due monthly and will equal 3% of
the outstanding balance on your line plus finance charges that accrued
on the outstanding balance or $50, whichever is greater.
Minimun Payment Examples: If you took a single $10,000
advance and the ANNUAL PERCENTAGE RATE was 9.52%.
• Under the monthly interest-only payment option, it would
take 18 years and 1 month to pay off the advance if you made only the
minimum payments. During that period, you would make 120 payments of
$79.33, followed by 96 payments varying between $379.33 and $50 and one
final payment of $10.75.
• Under the 2% of the balance payment option, it would take
10 years and 8 months to pay off the advance if you made only the
mininum payments. During that period, you would make 120 payments
varying between $279.33 and $50, followed by 7 payments of $50 and one
final payment of $21.53.
Fees and Charges: To open and maintain a line of credit,
you must pay us the following fees:
• Application fee: $100 (due at application)
• Points: 1% of credit limit (due when account opened)
• Annual maintenance fee: $50 during the first 3 years, $75
thereafter (due each year)
You also must pay certain fees to third parties to open a line.
These fees generally total between $500 and $900. If you ask, we will
give you an itemization of the fees you will have to pay to third
parties.
Minimum Draw Requirement: The minimum credit
advance that you can receive is $200.
Tax Deductibility: You should consult a tax
adviser regarding the deductibility of interest and charges for the
line.
Variable-Rate Feature: The line has a
variable-rate feature, and the annual percentage rate (corresponding to
the periodic rate) and the minimum monthly payment can change as a
result.
The annual percentage rate includes only interest and not other
costs.
The annual percentage rate is based on the value of an index. During
the draw period, the index is the monthly average prime rate charged by
banks. During the repayment period, the index is the weekly average
yield on U.S. Treasury securities adjusted to a constant maturity of
one year. Information on these indices is published in the
Federal Reserve Bulletin. To determine the annual percentage
rate that will apply to your line, we add a margin to the value of the
index.
The initial annual percentage rate is "discounted"--it is not
based on the index and margin used for later rate adjustments. The
initial rate will be in effect for the first year your credit line is
open.
Ask us for the current index values, margin, discount and annual
percentage rate. After you open a credit line, rate information will be
provided on periodic statements that we send you.
Rate Changes: The annual percentage rate can change
monthly. The maximum ANNUAL PERCENTAGE RATE that can apply is 18%.
Apart from this rate "cap," there is no limit on the amount by
which
{{6-30-89 p.6678.08}}the rate can change during any one-year
period.
Maximum Rate and Payment Examples: If the ANNUAL
PERCENTAGE RATE during the draw period equaled the 18% maximum and you
had an outstanding balance of $10,000:
• Under the monthly interest-only payment option, the minimum
monthly payment would be $150.
• Under the 2% of the balance payment option, the minimum
monthly payment would be $350.
This annual percentage rate could be reached during the first month
of the draw period.
If you had an outstanding balance of $10,000 during the repayment
period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE
RATE of 18% would be $450. This annual percentage rate could be
reached during the first month of the repayment period.
Historical Example: The following table shows how the
annual percentage rate and the monthly payments for a single $10,000
credit advance would have changed based on changes in the indices over
the past 15 years. For the draw period, the index values for the prime
rate are from September of each year. For the repayment period, the
index values for the yield on U.S. Treasury securities are from the
first week ending in July. While only one payment amount per year is
shown, payments under the 2% of the balance payment option and during
the repayment period would have varied during each year.
The table assumes that no additional credit advances were taken,
that only the minimum payments were made, and that the rate remained
constant during each year. It does not necessarily indicate how the
indices or your payments will change in the
future.
{{4-30-99 p.6678.09}}
G–15—Home Equity Model Clauses
(a) Retention of Information: This disclosure contains
important information about our Home Equity Line of Credit. You should
read it carefully and keep a copy for your records.
(b) Availability of Terms: To obtain the terms
described below, you must submit your application before
(date). However the (description of terms) are
subject to change. or
All of the terms described below are subject to change.
If these terms change [(other than the annual percentage rate)]
and you decide, as a result, not to enter into an agreement with us,
you are entitled to a refund of any fees you paid to us or anyone else
in connection with your application.
(c) Security Interest: We will take a [security
interest in/mortgage on] your home. You could lose your home if you do
not meet the obligations in your agreement with us.
(d) Possible Actions: Under certain circumstances, we
can (1) terminate your line, require you to pay us the
entire outstanding balance in one payment [, and charge you certain
fees]; (2) refuse to make additional extensions of credit; (3) reduce
your credit limit [; and (4) make specific changes that are set forth
in your agreement with us].
If you ask, we will give you more specific information about when we
can take these actions. or
Possible Actions: We can terminate your account,
require you to pay us the entire outstanding balance in one payment[,
and charge you certain fees] if:
• You engage in fraud or material misrepresentation in
connection with the line.
• You do not meet the repayment terms.
• Your action or inaction adversely affects the collateral or
our rights in the collateral.
We can refuse to make additional extensions of credit or reduce your
credit limit if:
• The value of the dwelling securing the line declines
significantly below its appraised value for purposes of the line.
[The page following this is 6678.11.]
{{8-31-01 p.6678.11}}
• We reasonably believe you will not be able to meet the
repayment requirements due to a material change in your financial
circumstances.
• You are in default of a material obligation in the
agreement.
• Government action prevents us from imposing the annual
percentage rate provided for or impairs our security interest such that
the value of the interest is less than 120 percent of the credit line.
• A regulatory agency has notified us that continued advances
would constitute an unsafe and unsound practice.
• The maximum annual percentage rate is reached.
[The initial agreement permits us to make certain changes to the
terms of the agreement at specified times or upon the occurrence of
specified events.]
(e) Minimum Payment Requirements: The length of the
[draw period/repayment period] is (length). Payments will
be due (frequency). Your minimum payment will equal
(how payment determined).
[The minimum payment will not reduce the principal that is
outstanding on your line./The minimum payment will not fully repay the
principal that is outstanding on your line.] You will then be required
to pay the entire balance in a single "balloon" payment.
(f) Minimum Payment Example: If you made only the
minimum payments and took no other credit advances, it would take
(length of time) to pay off a credit advance of $10,000 at
an ANNUAL PERCENTAGE RATE of (recent rate). During that
period, you would make (number) (frequency)
payments of $ _______ .
(g) Fees and Charges: To open and maintain a line of
credit, you must pay the following fees to us:
(Description of fee) [$ _______ / _______ %
of _______ ] (When payable)
(Description of fee) [$ _______ / _______ %
of _______ ] (When payable)
You also must pay certain fees to third parties. These fees
generally total [$ _______ / _______ %
of _______ /between $ _______ and $ _______ ]. If
you ask, we will give you an itemization of the fees you will have to
pay to third parties.
(h) Minimum Draw and Balance Requirements: The minimum
credit advance you can receive is $ _______ . You must maintain
an outstanding balance of at least $ _______ .
(i) Negative Amortization: Under some circumstances,
your payments will not cover the finance charges that accrue and
"negative amortization" will occur. Negative amortization will
increase the amount that you owe us and reduce your equity in your
home.
(j) Tax Deductibility: You should consult a tax advisor
regarding the deductibility of interest and charges for the line.
(k) Other Products: If you ask, we will provide you
with information on our other available home equity lines.
(l) Variable-Rate Feature: The plan has a variable-rate
feature and the annual percentage rate (corresponding to the periodic
rate) and the [minimum payment/term of the line] can change as a
result.
The annual percentage rate includes only interest and not other
costs.
The annual percentage rate is based on the value of an index. The
index is the (identification of index) and is [published
in/available from] (source of information). To determine
the annual percentage rate that will apply to your line, we add a
margin to the value of the index.
[The initial annual percentage rate is "discounted"--it is
not based on the index and margin used for later rate adjustments. The
initial rate will be in effect for (period).]
Ask us for the current index value, margin, [discount,] and annual
percentage rate. After you open a credit line, rate information will be
provided on periodic statements that we send you.
(m) Rate Changes: The annual percentage rate can change
(frequency). [The rate cannot increase by more
than _______ percentage points in any one year period./There is
no limit on the amount by which the rate can change in any one year
period.] [The maximum ANNUAL PERCENTAGE RATE that can apply
is _______ %. /The ANNUAL PERCENTAGE RATE cannot increase by
more than _______ percentage points above the initial rate.]
[Ask us for the specific rate limitations that will apply to your
credit line.]
(n) Maximum Rate and Payment Examples: If you had an
outstanding balance of
{{8-31-01 p.6678.12}}$10,000, the minimum payment at the
maximum ANNUAL PERCENTAGE RATE of _______ % would be
$ _______ . This annual percentage rate could be reached
(when maximum rate could be reached).
(o) Historical Example: The following table shows how
the annual percentage rate and the minimum payments for a single
$10,000 credit advance would have changed based on changes in the index
over the past 15 years. The index values are from (when values
are measured). [While only one payment amount per year is shown,
payments would have varied during each year.]
The table assumes that no additional credit advances were taken,
that only the minimum payments were made, and that the rate remained
constant during each year. It does not necessarily indicate how the
index or your payments will change in the
future.
[Codified to 12 C.F.R. Part 226, Appendix G]
[Appendix G amended at 54 Fed. Reg. 13868, April 6, 1989,
effective April 3, 1989, but compliance is optional until August 31,
1989; 54 Fed. Reg. 24689, June 9, 1989, effective June 7, 1989, but
compliance is optional until November 7, 1989; 65 Fed. Reg. 58908,
October 3, 2000, effective September 27, 2000; compliance is mandatory
as of October 1, 2000; 66 Fed. Reg. 43463, August 20,
2001]
1 Where a portion of the finance charge is determined by
application of one or more daily periodic rates, the phrase "sum of
the balances" shall also mean the "average of daily
balances." Go Back to Text
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