Each depositor insured to at least $250,000 per insured bank

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.

Appendix C to Part 226—Issuance of Staff Interpretations

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, DC 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.

Appendix D to Part 226—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.

Assume a $50,000 loan commitment at 10.5% interest with a 5-month construction period and a prepaid finance charge of 2 points.

(A)	(B)
Estimated Interest
$25,000 x .105 q 12 x 5 = $1,093.75	$50,000 × .105 12 × 5 = $2,187.50
Estimated APR:
(1,093.75 q 1,000) x 100 q 5 x 12 =	(2,187.50 + 1,000) × 100 5 × 12 =
(25,000 – 1,000)	(25,000 -- 1,000)
20.94%	31.88%
Disclosures:
Amount financed $49,000.00	$49,000.00
Prepaid finance charge 1,000.00	1,000.00
FINANCE CHARGE (Estimate) 2,093.75	3,187.50
ANNUAL PERCENTAGE RATE
(Estimate) 20.94%	31.88%
Repayment One payment of principal of	4 monthly payments of $437.50, begin-
$50,000 on 12-12-80. Interest on the	ning 8-12-80, and a final payment of
amount of credit outstanding will be	$50,437.50 on 12-12-80
paid monthly.
Total of payments (Estimate) $51,093.75	$52,187.50

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).

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.

Computation of Estimated APR
Interest on Amount Advanced				Interest on Entire Commitment
Estimated construction interest
$25,000 × .105 12 × 5 = $1,093.75			$50,000 × 105 12 × 5 = $2,187.50
260 x $457.37	$164,653.20		$164,653.20
Principal	– 50,000.00		– 50,000.00
Interest on Per
manent Fin.	114,653.20		114,653.20
Construction
Interest	+ 1,093.75		+ 2,187.50
Points	+ 1,000.00	$116,746.95	+ 1,000.00	$117,840.70
Estimated amount financed:
Principal	$ 50,000.00		$ 50,000.00
Construction
Interest –	1,093.75		-- 2,187.50
Points --	1,000.00	$47,906.26	– 1,000.00	$ 46,812.50
Number of payments		360		360
Payment amount		$457.37		$457.37
First payment period (5 2) + 1
		3/n$ months	(5 q 2) + 1	31/2 months
Estimated APR (Actuarial)		10.75%		11.03%
Estimated APR (Volume I):
11,674,695 = 243.70 = FC/$100			11,784,070 = 251.73 = FC/$100
47,906.25			46,812.50
First period adjustment =			First period adjustment =
3 mo., 15 days = + 5.0			3 mo., 15 days = + 5.0
Using 365 payment line, the figure			Using 365 payment line, the
closest to 243.70 is 247.00, which			figure closest to 251.73 is
corresponds to an APR of		11%	253.93, which corresponds to
			an APR of	11.25%
Disclosures
Amount financed		$ 49,000.00	$49,000.00
Prepaid finance charge		1,000.00	1,000.00
FINANCE CHARGE (Estimate)		116,746.95	117,840.70
			11.25%
ANNUAL PERCENTAGE RATE
(Estimate)		11%
Repayment Interest on the amount of credit outstanding during the construction period will be paid monthly, followed by 360 monthly payments of $457.37, beginning 1-12-81			5 monthly payments of $437.50 beginning 8-12-80, followed by 360 monthly payments of $457.37 beginning 1-12-81
Total of payments (Estimate)		$165,746.95		$166,840.70

[Codified to 12 C.F.R. Part 226, Appendix D]

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 the card issuer and the seller are the same or related persons; no finance charge is imposed; consumers are billed in full for each use of the card on a transaction-by-transaction basis, by means of an invoice or other statement reflecting each use of the card; and no cumulative account is maintained which reflects the transactions by each consumer during a period of time, such as a month. The term "related person" refers to, for example, a franchised or licensed seller of a creditor's product or service or a seller who assigns or sells sales accounts to a creditor or arranges for credit under a plan that allows the consumer to use the credit only in transactions with that seller. A seller is not related to the creditor merely because the seller and the creditor have an agreement authorizing the seller to honor the creditor's credit card.

1.  Section 226.6(a)(5) or § 226.6(b)(5)(iii).

2.  Section 226.6(a)(2) or § 226.6(b)(3)(ii)(B), as applicable. The disclosure required by § 226.6(a)(2) or § 226.6(b)(3)(ii)(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. A tabular format is not required.

3.  Section 226.6(a)(4) or § 226.6(b)(5)(ii).

4.  Section 226.7(a)(2) or § 226.7(b)(2), as applicable; § 226.7(a)(9) or § 226.7(b)(9), as applicable. Creditors may comply by placing the required disclosures on the invoice or statement sent to the consumer for each transaction.

5.  Section 226.9(a). Creditors may comply by mailing or delivering the statement required by § 226.6(a)(5) or § 226.6(b)(5)(iii) (see appendix G--3 and G--3(A) to this part) 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(a)(5) or § 226.6(b)(5)(iii), or an alternative billing error rights statement substantially similar to that in appendix G--4 and G--4(A) to this part, with each invoice sent to a consumer.

6.  Section 226.9(c). A tabular format is not required.

7.  Section 226.10.

Appendix F—Optional Annual Percentage Rate Computations for Creditors Offering Open-End Plans Subject to the Requirements of § 226.5b

Appendix G to Part 226—Open-End Model Forms and Clauses

G--1  Balance Computation Methods Model Clauses (Home-equity Plans) (§§ 226.6 and   226.7)

G--1(A)  Balance Computation Methods Model Clauses (Plans other than Home-equity   Plans) (§§ 226.6 and 226.7)

G--2  Liability for Unauthorized Use Model Clause (Home-equity Plans) (§ 226.12)

G--2(A)  Liability for Unauthorized Use Model Clause (Plans Other Than Home-equity   Plans) (§ 226.12)

G--3  Long-Form Billing-Error Rights Model Form (Home-equity Plans) (§§ 226.6 and   226.9)

G--3(A)  Long-Form Billing-Error Rights Model Form (Plans Other Than Home-equity   Plans) (§§ 226.6 and 226.9)

G--4  Alternative Billing-Error Rights Model Form (Home-equity Plans) (§ 226.9)

G--4(A)  Alternative Billing-Error Rights Model Form (Plans Other Than Home-equity   Plans) (§ 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 Form (Credit Cards) (§ 226.5a(b))

G--10(B)  Applications and Solicitations Sample (Credit Cards) (§ 226.5a(b))

G--10(C)  Applications and Solicitations Sample (Credit Cards) (§ 226.5a(b))

G--10(D)  Applications and Solicitations Model Form (Charge Cards) (§ 226.5a(b))

G--10(E)  Applications and Solicitations Sample (Charge Cards) (§ 226.5a(b))

G--11  Applications and Solicitations Made Available to General Public Model Clauses   (§ 226.5a(e))

G--12  Reserved

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--16(A)  Debt Suspension Model Clause (§ 226.4(d)(3))

G--16(B)  Debt Suspension Sample (§ 226.4(d)(3))

G--17(A)  Account-opening Model Form (§ 226.6(b)(2))

G--17(B)  Account-opening Sample (§ 226.6(b)(2))

G--17(C)  Account-opening Sample (§ 226.6(b)(2))

(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 billing cycle (including new purchases and deducting payments and credits made during the billing cycle).

(f)  Daily balance method (including current transactions)

(a)  Adjusted balance method

We figure the interest 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 interest or other finance charges and] any payments and credits received during the present billing cycle.

(b)  Previous balance method

We figure the interest charge on your account by applying the periodic rate to the amount you owe at the beginning of each billing cycle. We do not subtract any payments or credits received during the billing cycle.

(c)  Average daily balance method (excluding current transactions)

We figure the interest charge on your account by applying the periodic rate to the "average daily balance" of your account. To get the "average daily balance" we take the beginning balance of your account each day and subtract [any unpaid interest or other finance charges and] any payments or credits. We do not add in any new [purchases/advances/fees]. 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 the interest charge on your account by applying the periodic rate to the "average daily balance" of your account. To get the "average daily balance" we take the beginning balance of your account each day, add any new [purchases/advances/fees], and subtract [any unpaid interest or other finance charges and] any payments or credits. 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 the interest charge on your account by applying the periodic rate to the amount you owe at the end of each billing cycle (including new [purchases/advances/fees] and deducting payments and credits made during the billing cycle).

(f)  Daily balance method (including current transactions)

We figure the interest charge on your account by applying the periodic rate to the "daily balance" of your account for each day in the billing cycle. To get the "daily balance" we take the beginning balance of your account each day, add any new [purchases/advances/fees], and subtract [any unpaid interest or other finance charges and] any payments or credits. This gives us the daily balance.

G--2--Liability for Unauthorized Use Model Clause (Home-Equity Plans)

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. [You may also contact us on the Web: [Creditor Web or email address]] In any case, your liability will not exceed [insert $50 or any lesser amount under agreement with the cardholder].

G--2(A)--Liability for Unauthorized Use Model Clause (Plans Other Than Home-Equity   Plans)

If you notice the loss or theft of your credit card or a possible unauthorized use of your card, you should write to us immediately at: [address] [address listed on your bill], or call us at [telephone number].

[You may also contact us on the Web: {Creditor Web or email address]]

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 may also contact us on the Web: [Creditor Web or email address]] 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.

Your Billing Rights: Keep This Document For Future Use

This notice tells you about your rights and our responsibilities under the Fair Credit Billing Act.

What To Do If You Find A Mistake On Your Statement

If you think there is an error on your statement, write to us at:

[Creditor Name]

[Creditor Address]

[You may also contact us on the Web: [Creditor Web or email address]]

In your letter, give us the following information:

•  Account information: Your name and account number.

•  Dollar amount: The dollar amount of the suspected error.

•  Description of problem: If you think there is an error on your bill, describe what you believe is wrong and why you believe it is a mistake. You must contact us:

•  Within 60 days after the error appeared on your statement.

•  At least 3 business days before an automated payment is scheduled, if you want to stop payment on the amount you think is wrong.

You must notify us of any potential errors in writing . You may call us, but if you do we are not required to investigate any potential errors and you may have to pay the amount in question.

What Will Happen After We Receive Your Letter

When we receive your letter, we must do two things:

1.  Within 30 days of receiving your letter, we must tell you that we received your letter. We will also tell you if we have already corrected the error.

2.  Within 90 days of receiving your letter, we must either correct the error or explain to you why we believe the bill is correct.

While we investigate whether or not there has been an error:

•  We cannot try to collect the amount in question, or report you as delinquent on that amount.

•  The charge in question may remain on your statement, and we may continue to charge you interest on that amount.

•  While you do not have to pay the amount in question, you are responsible for the remainder of your balance.

•  We can apply any unpaid amount against your credit limit. After we finish our investigation, one of two things will happen:

•  If we made a mistake: You will not have to pay the amount in question or any interest or other fees related to that amount.

•  If we do not believe there was a mistake: You will have to pay the amount in question, along with applicable interest and fees. We will send you a statement of the amount you owe and the date payment is due. We may then report you as delinquent if you do not pay the amount we think you owe.

If you receive our explanation but still believe your bill is wrong, you must write to us within 10 days telling us that you still refuse to pay. If you do so, we cannot report you as delinquent without also reporting that you are questioning your bill. We must tell you the name of anyone to whom we reported you as delinquent, and we must let those organizations know when the matter has been settled between us.

If we do not follow all of the rules above, you do not have to pay the first $50 of the amount you question even if your bill is correct.

Your Rights If You Are Dissatisfied With Your Credit Card Purchases

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. [You may also contact us on the Web: [Creditor Web or e-mail address]] 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 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--4(A)--Alternative Billing-Error Rights Model Form (Plans Other Than Home-Equity   Plans)

What To Do If You Think You Find A Mistake On Your Statement

If you think there is an error on your statement, write to us at:

[Creditor Name]

[Creditor Address]

[You may also contact us on the Web: [Creditor Web or e-mail address]]

In your letter, give us the following information:

•  Account information: Your name and account number.

•  Dollar amount: The dollar amount of the suspected error.

If you are dissatisfied with the goods or services that you have purchased with your 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 purchase.

To use this right, all of the following must be true:

1.  The purchase must have been made in your home state or within 100 miles of your current mailing address, and the purchase price must have been more than $50. (Note:Neither of these are necessary if your purchase was based on an advertisement we mailed to you, or if we own the company that sold you the goods or services.)

2.  You must have used your credit card for the purchase. Purchases made with cash advances from an ATM or with a check that accesses your credit card account do not qualify.

3.  You must not yet have fully paid for the purchase.

If all of the criteria above are met and you are still dissatisfied with the purchase, contact us in writing [or electronically] at:

[Creditor Name]

[Creditor Address]

[[Creditor Web address]]

While we investigate, the same rules apply to the disputed amount as discussed above. After we finish our investigation, we will tell you our decision. At that point, if we think you owe an amount and you do not pay we may report you as delinquent.

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.

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

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.

____________________________________________

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

(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.

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

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].

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.

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.

____________________________________________

[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 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. 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.

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 of 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.

This 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 monthly and will equal the finance charges that accrued on the outstanding balance during the preceding month.

•  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.

G--18(H)--Deferred Interest Periodic Statement Clause

[You must pay your promotional balance in full by [date] to avoid paying accrued interest charges.]

Unless you tell us otherwise, we will decline any transaction that causes you to go over your credit limit. If you want us to authorize these transactions, you can request over-the-credit limit coverage.

If you have over-the-credit limit coverage and you go over your credit limit, we will charge you a fee of $XX and may increase your APRs to the Penalty APR of XX.XX%. You will only pay one fee per billing cycle, even if you go over your limit multiple times in the same cycle.

Even if you request over-the-credit limit coverage, in some cases we may still decline a transaction that would cause you to go over your limit, such as if you are past due or significantly over your credit limit.

If you want over-the-limit coverage and to allow us to authorize transactions that go over your credit limit, please:

--Call us at [telephone number];

--Visit [Web site]; or

--Check or initial the box below, and return the form to us at [address].

_______ I want over-the-limit coverage. I understand that if I go over my credit limit, I will be charged a fee of $_______ and my APRs may be increased. [I have the right to cancel this coverage at any time.]

[_______ I do not want over-the-limit coverage. I understand that transactions that exceed my credit limit will not be authorized.]

Printed Name: _______

Date: _______

[Account Number]: _______

G--25(B)--Revocation Notice for Periodic Statement Regarding Over-the-Credit Limit   Transactions

Appendix H to Part 226—Closed-End Model Forms and Clauses

H--1 Credit Sale Model Form (§ 226.18)

H--2 Loan Model Form (§ 226.18)

H--3 Amount Financed Itemization Model Form (§ 226.18(c))

H--4(A) Variable-Rate Model Clauses (§ 226.18(f)(1))

H--4(B) Variable-Rate Model Clauses (§ 226.18(f)(2))

H--4(C) Variable-Rate Model Clauses (§ 226.19(b))

H--4(D) Variable-Rate Model Clauses (§ 226.20(c)) H--4(E)--Fixed-Rate Mortgage Interest Rate and Payment Summary Model Clause (§ 226.18(s))H--4(F)--Adjustable-Rate Mortgage or Step-Rate Mortgage Interest Rate and Payment Summary Model Clause (§ 226.18(s)) H--4(G)--Mortgage with Negative Amortization Interest Rate and Payment Summary Model Clause (§ 226.18(s)) H--4(H)--Fixed-Rate Mortgage with Interest-Only Interest Rate and Payment Summary Model Clause (§ 226.18(s)) H--4(I)--Adjustable-Rate Mortgage Introductory Rate Disclosure Model Clause (§ 226.18(s)(2)(iii)) H--4(J)--Balloon Payment Disclosure Model Clause (§ 226.18(s)(5)) H--4(K)--No Guarantee to Refinance Statement Model Clause (§ 226.18(t))

H--5 Demand Feature Model Clauses (§ 226.18(i))

H--6 Assumption Policy Model Clause (§ 226.18(q))

H--7 Required Deposit Model Clause (§ 226.18(r))

H--8 Rescission Model Form (General) (§ 226.23)

H--9 Rescission Model Form (Refinancing (with Original Creditor)) (§ 226.23)

H--10 Credit Sale Sample

H--11 Installment Loan Sample

H--12 Refinancing Sample

H--13 Mortgage with Demand Feature Sample

H--14 Variable-Rate Mortgage Sample (§ 226.19(b))

H--15 Graduated-Payment Mortgage Sample

H--16 Mortgage Sample

H--17(A) Debt Suspension Model Clause

Itemization of the Amount Financed of $ _______

$ _______    Amount given to you directly

$ _______    Amount paid on your account

Amount paid to others on your behalf

$ _______    to [public officials] [credit bureau] [appraiser] [insurance company]

$ _______    to [name of another creditor]

$ _______    to (other)

$ _______    Prepaid finance charge

H–4(A)—VARIABLE RATE MODEL CLAUSES

The annual percentage rate may increase during the term of this transaction if:

[the prime interest rate of    (creditor)    increases.]

[the balance in your deposit account falls below $ _______ .]

[you terminate your employment with    (employer)        .]

[The interest rate will not increase above  _______ %.]

[The maximum interest rate increase at one time will be _______ %.]

[The rate will not increase more than once every        (time period)        .]

Any increase will take the form of:

[higher payment amounts.]

[more payments of the same amount.]

[a larger amount due at maturity.]      

Example based on the specific transaction

[If the interest rate increases by _______ % in    (time period),

[your regular payments will increase to $ _______ .]

[you will have to make _______ additional payments.]

[your final payment will increase to $ _______ .]]

Example based on a typical transaction

[If your loan were for $ _______ at _______ % for    (term)    and the rate increased to _______ % in    (time period),

[your regular payments would increase by $ _______ .]

[you would have to make _______ additional payments.]

[your final payment would increase by $ _______ .]]

H–4(B) VARIABLE-RATE MODEL CLAUSES

Your loan contains a variable-rate feature. Disclosures about the variable-rate feature have been provided to you earlier.

H--4(C)--Variable-Rate Model Clauses

This disclosure describes the features of the adjustable-rate mortgage (ARM) program you are considering. Information on other ARM programs is available upon request.

How Your Interest Rate and Payment Are Determined

•  Your interest rate will be based on [an index plus a margin] [a formula].

•  Your payment will be based on the interest rate, loan balance, and loan term.

--[The interest rate will be based on (identification of index) plus our margin. Ask for our current interest rate and margin.]

--[The interest rate will be based on (identification of formula). Ask us for our current interest rate.]

--Information about the index [formula for rate adjustments] is published [can be found] _______ .

•  Your interest rate can change (frequency).

•  [Your interest rate cannot increase or decrease more than _______ percentage points at each adjustment.]

•  Your interest rate cannot increase [or decrease] more than _______ percentage points over the term of the loan.

How Your Payment Can Change

•  Your payment can change (frequency) based on changes in the interest rate.

•  [Your payment cannot increase more than (amount or percentage) at each adjustment.]

•  You will be notified in writing _______ days before the due date of a payment at a new level. This notice will contain information about your interest rates, payment amount, and loan balance.

•  [You will be notified once each year during which interest rate adjustments, but no payment adjustments, have been made to your loan. This notice will contain information about your interest rates, payment amount, and loan balance.]

•  [For example, on a $10,000 [term] loan with an initial interest rate of _______ [(the rate shown in the interest rate column below for the year 19_______)] [(in effect (month) (year)], the maximum amount that the interest rate can rise under this program is _______ percentage points, to _______ %, and the monthly payment can rise from a first-year payment of $ _______ to a maximum of $ _______ in the _______ year. To see what your payments would be, divide your mortgage amount by $10,000; then multiply the monthly payment by that amount. (For example, the monthly payment for a mortgage amount of $60,000 would be: $60,000 $10,000 = 6; 6 × ____________________________________________= $ ____________________________________________ per month.)]

[Example

The example below shows how your payments would have changed under this ARM program based on actual changes in the index from 1982 to 1996. This does not necessarily indicate how your index will change in the future.

The example is based on the following assumptions:

*This is a margin we have used recently, your margin may be different.

Your new interest rate will be _______ %, which is based on an index value of _______ %.

Your previous interest rate was _______ %, which was based on an index value of _______ %.

[The new interest rate does not reflect a change of _______ percentage points in the index value which was not added because of _______ .]

[The new payment will be $ _______ .]

[Your new loan balance is $ _______ .]

[Your (new) (existing) payment will not be sufficient to cover the interest due and the difference will be added to the loan amount. The payment amount needed to pay your loan in full by the end of the term at the new interest rate is $ _______ .]

H–4(F)—ADJUSTABLE-RATE MORTGAGE OR STEP-RATE MORTGAGE INTEREST RATE AND PAYMENT SUMMARY MODEL CLAUSE

H-4(G)—MORTGAGE WITH NEGATIVE AMORTIZATION INTEREST RATE AND PAYMENT SUMMARY MODEL CLAUSE

H–4(I)—ADJUSTABLE-RATE MORTGAGE INTRODUCTORY RATE DISCLOSURE MODEL CLAUSE

[Introductory Rate Notice

You have a discounted introductory rate of _______ % that ends after (period).

In the (period in sequence), even if market rates do not change, this rate will increase  to _______ %.]

H–4(J)—BALLOON PAYMENT DISCLOSURE MODEL CLAUSE

[Final Balloon Payment due (date): $ _______]

H–4(K)—NO GUARANTEE TO REFINANCE STATEMENT MODEL CLAUSE

There is no guarantee that you will be able to refinance to lower your rate and payments.

H-5—DEMAND FEATURE MODEL CLAUSES

This obligation [is payable on demand.] [has a demand feature.]

[All disclosures are based on an assumed maturity of one year.]

H-6—ASSUMPTION POLICY MODEL CLAUSE

The annual percentage rate does not take into account your required deposit.

H–8—RESCISSION MODEL FORM (GENERAL)

NOTICE OF RIGHT TO CANCEL

You are entering into a transaction that will result in a [mortgage/lien/security interest] [on/in] your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last:

(1)  the date of the transaction, 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.

If you cancel the transaction, the [mortgage/lien/security interest] is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the [mortgage/lien/security interest] [on/in] your home has been cancelled, and we must return to you any money or property you have given to us or to anyone else in connection with this transaction.

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 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.

If you decide to cancel this transaction, 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 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

H--9--Rescission Model Form (Refinancing with Original Creditor)

NOTICE OF RIGHT TO CANCEL

Your Right To Cancel

You are entering into a new transaction to increase the amount of credit previously provided to you. Your home is the security for this new transaction. You have a legal right under federal law to cancel this new transaction, without cost, within three business days from whichever of the following events occurs last:

(1)  the date of this new transaction, which is _______ ; or

(2)  the date you received your new Truth in Lending disclosures; or

(3)  the date you received this notice of your right to cancel.

This disclosure describes the features of the adjustable-rate mortgage (ARM) program you are considering. Information on other ARM programs is available upon request.

How Your Interest Rate and Payment Are Determined

•  Your interest rate will be based on an index rate plus a margin.

•  Your payment will be based on the interest rate, loan balance, and loan term.

--The interest rate will be based on the weekly average yield on United States Treasury securities adjusted to a constant maturity of 1 year (your index), plus our margin. Ask us for our current interest rate and margin.

--Information about the index rate is published weekly in the Wall Street Journal.

•  Your interest rate will equal the index rate plus our margin unless your interest rate "caps" limit the amount of change in the interest rate.

How Your Interest Rate Can Change

•  Your interest rate can change yearly.

•  Your interest rate cannot increase or decrease more than 2 percentage points per year.

•  Your interest rate cannot increase or decrease more than 5 percentage points over the term of the loan.

How Your Monthly Payment Can Change

•  Your monthly payment can increase or decrease substantially based on annual changes in the interest rate.

•  [For example, on a $10,000, 30-year loan with an initial interest rate of 12.41 percent in effect in July 1996, the maximum amount that the interest rate can rise under this program is 5 percentage points, to 17.41 percent, and the monthly payment can rise from a first-year payment of $106.03 to a maximum of $145.34 in the fourth year. To see what your payment is, divide your mortgage amount by $10,000; then multiply the monthly payment by that amount. (For example, the monthly payment for a mortgage amount of $60,000 would be: $60,000$10,000=6; 6×106.03=$636.18 per month.)

•  You will be notified in writing 25 days before the annual payment adjustment may be made. This notice will contain information about your interest rates, payment amount and loan balance.]

[Example

The example below shows how your payments would have changed under this ARM program based on actual changes in the index from 1982 to 1996. This does not necessarily indicate how your index will change in the future. The example is based on the following assumptions:

You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application.

If you obtain this loan, the lender will have a mortgage on your home.

YOU COULD LOSE YOUR HOME, AND ANY MONEY YOU HAVE PUT INTO IT, IF YOU DO NOT MEET YOUR OBLIGATIONS UNDER THE LOAN.

You are borrowing $ _______ (optional credit insurance is is not included in this amount).

The annual percentage rate on your loan will be _______ %.

Your regular   [frequency]   payment will be $ _______ .

[At the end of your loan, you will still owe us $[balloon amount].]

Page 1 of 2

_______

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H–23—Private Education Loan Final Sample (contd.)

Page 2 of 2

Appendix I to Part 226—Federal Enforcement Agencies

The following list indicates which federal agency enforces Regulation Z for particular classes of businesses. Any questions concerning compliance by a particular business should be directed to the appropriate enforcement agency. Terms that are not defined in the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in the International Banking Act of 1978 (12 U.S.C. 3101).

National banks and federal branches and federal agencies of foreign banks

District office of the Office of the Comptroller of the Currency for the district in which the institution is located.

State member banks, branches and agencies of foreign banks (other than federal branches, federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act

Federal Reserve Bank serving the district in which the institution is located.

Non-member insured banks and insured state branches of foreign banks

Federal Deposit Insurance Corporation Regional director for the region in which the institution is located.

Savings institutions insured under the Savings Association Insurance Fund of the FDIC and federally chartered savings banks insured under the Bank Insurance Fund of the FDIC (but not including state-chartered savings banks insured under the Bank Insurance Fund).

Office of Thrift Supervision Regional Director for the region in which the institution is located.

Federal Credit Unions

Regional office of the National Credit Union Administration serving the area in which the Federal credit union is located.

Air Carriers

Assistant General Counsel for Aviation Enforcement and Proceedings, Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590.

Creditors Subject to Packers and Stockyards Act

Farm Credit Administration, 490 L'Enfant Plaza, SW., Washington, DC 20578.

Retail, Department Stores, Consumer Finance Companies, All Other Creditors, and All Nonbank Credit Card Issuers (Creditors operating on a local or regional basis should use the address of the FTC Regional Office in which they operate.)

Division of Credit Practices, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 20580.

Appendix J to Part 226—Annual Percentage Rate Computations
for Closed-End Credit Transactions

(a)  Introduction

(1)  Section 226.22(a) of Regulation Z provides that the annual percentage rate for other than open end credit transactions shall be determined in accordance with either the actuarial method or the United States Rule method. This appendix contains an explanation of the actuarial method as well as equations, instructions and examples of how this method applies to single advance and multiple advance transactions.

(2)  Under the actuarial method, at the end of each unit-period (or fractional unit-period) the unpaid balance of the amount financed is increased by the finance charge earned during that period and is decreased by the total payment (if any) made at the end of that period. The determination of unit-periods and fractional unit-periods shall be consistent with the definitions and rules in paragraphs (b) (3), (4) and (5) of this section and the general equation in paragraph (b)(8) of this section.

(3)  In contrast, under the United States Rule method, at the end of each payment period, the unpaid balance of the amount financed is increased by the finance charge earned during that payment period and is decreased by the payment made at the end of that payment period. If the payment is less than the finance charge earned, the adjustment of the unpaid balance of the amount financed is postponed until the end of the next payment period. If at that time the sum of the two payments is still less than the total earned finance charge for the two payment periods, the adjustment of the unpaid balance of the amount financed is postponed still another payment period, and so forth.

(b)  Instructions and Equations for the Actuarial Method

(1)  General Rule

The annual percentage rate shall be the nominal annual percentage rate determined by multiplying the unit-period rate by the number of unit-periods in a year.

(2)  Term of the Transaction

The term of the transaction begins on the date of its consummation, except that if the finance charge or any portion of it is earned beginning on a later date, the term begins on the later date. The term ends on the date the last payment is due, except that if an advance is scheduled after that date, the term ends on the later date. For computation purposes, the length of the term shall be equal to the time interval between any point in time on the beginning date to the same point in time on the ending date.

(3)  Definitions of Time Intervals

(i)  A period is the interval of time between advances or between payments and includes the interval of time between the date the finance charge begins to be earned and the date of the first advance thereafter or the date of the first payment thereafter, as applicable.

(ii)  A common period is any period that occurs more than once in a transaction.

(iii)  A standard interval of time is a day, week, semimonth, month, or a multiple of a week or a month up to, but not exceeding, 1 year.

Symbols used in the examples shown in this appendix are defined as follows:

(8)  General equation.  The following equation sets forth the relationship among the  terms of a transaction:

Appendix K to Part 226—Total Annual Loan Cost Rate Computations for Reverse Mortgage Transactions

(a)  Introduction. Creditors are required to disclose a series of total annual loan cost rates for each reverse mortgage transaction. This appendix contains the equations creditors must use in computing the total annual loan cost rate for various transactions, as well as instructions, explanations, and examples for various transactions. This appendix is modeled after appendix J of this part (Annual Percentage Rates Computations for Closed-end Credit Transactions); creditors should consult appendix J of this part for additional guidance in using the formulas for reverse mortgages.

(b)  Instructions and equations for the total annual loan cost rate--(1) General rule. The total annual loan cost rate shall be the nominal total annual loan cost rate determined by multiplying the unit-period rate by the number of unit-periods in a year.

(2)  Term of the transaction. For purposes of total annual loan cost disclosures, the term of a reverse mortgage transaction is assumed to begin on the first of the month in which consummation is expected to occur. If a loan cost or any portion of a loan cost is initially incurred beginning on a date later than consummation, the term of the transaction is assumed to begin on the first of the month in which that loan cost is incurred. For purposes of total annual loan cost disclosures, the term ends on each of the assumed loan periods specified in § 226.33(c)(6).

(3)  Definitions of time intervals.

(i)  A period is the interval of time between advances.

(ii)  A common period is any period that occurs more than once in a transaction.

(iii)  A standard interval of time is a day, week, semimonth, month, or a multiple of a week or a month up to, but not exceeding, 1 year.

Appendix L to Part 226—Assumed Loan Periods for Computations of Total Annual Loan Cost Rates

(a)  Required tables. In calculating the total annual loan cost rates in accordance with appendix K of this part, creditors shall assume three loan periods, as determined by the following table.

Appendix M1 to Part 226—Repayment Disclosures

(a)  Definitions. (1) "Promotional terms" means terms of a cardholder's account that will expire in a fixed period of time, as set forth by the card issuer.

(2)  "Deferred interest or similar plan" means a plan where a consumer will not be obligated to pay interest that accrues on balances or transactions if those balances or transactions are paid in full prior to the expiration of a specified period of time.

Appendix M2 to Part 226—Sample Calculations of Repayment Disclosures

The following is an example of how to calculate the minimum payment repayment estimate, the minimum payment total cost estimate, the estimated monthly payment for repayment in 36 months, the total cost estimate for repayment in 36 months, and the savings estimate for repayment in 36 months using the guidance in Appendix M1 to this part where three annual percentage rates apply (where one of the rates is a promotional APR), the total outstanding balance is $1000, and the minimum payment formula is 2 percent of the outstanding balance or $20, whichever is greater. The following calculation is written in SAS code.

data one;

/*

Note:pmt01 = estimated monthly payment to repay balance in 36 months sumpmts36 = sum of payments for repayment in 36 months

month = number of months to repay total balance if making only minimum payments

pmt = minimum monthly payment

fc = monthly finance charge

sumpmts = sum of payments for minimum payments

*/

* inputs;

* annual percentage rates; apr1=0.0; apr2=0.17; apr3=0.21; * insert in ascending order;

* outstanding balances; cbal1=500; cbal2=250; cbal3=250;

* dollar minimum payment; dmin=20;

* percent minimum payment; pmin=0.02; * (0.02+perrate);

* promotional rate information;

* last month for promotional rate; expm=6; * = 0 if no promotional rate;

* regular rate; rrate=.17; * = 0 if no promotional rate;

array apr(3); array perrate(3);

days=365/12; * calculate days in month;

* calculate estimated monthly payment to pay off balances in 36 months, and total cost of repaying balance in 36 months;

array xperrate(3);

do I=1 to 3;

xperrate(I)=(apr(I)/365)*days; * calculate periodic rate;

end;

if expm gt 0 then xperrate1a=(expm/36)*xperrate1+(1-(expm/36))*(rrate/365)*days;

else xperrate1a=xperrate1;

tbal=cbal1+cbal2+cbal3;

perrate36=(cbal1*xperrate1a+cbal2*xperrate2+cbal3*xperrate3)/(cbal1+cbal2+cbal3);

* months to repay; dmonths=36;

* initialize counters for sum of payments for repayment in 36 months; Sumpmts36=0;

pvaf=(1-(1+perrate36)**-dmonths)/perrate36; * calculate present value of annuity factor;

pmt01=round(tbal/pvaf,0.01); * calculate monthly payment for designated number of months; sumpmts36 = pmt01 * 36;

* calculate time to repay and total cost of making minimum payments each month;

* initialize counter for months, and sum of payments;

month=0;