Annual adjustment of fee-based trigger amount for additional disclosure requirements.The Federal Reserve Board on August 19, 2003, published its annual adjustment of the dollar amount that triggers additional disclosure requirements under the Truth in Lending Act Truth in Lending Act n. a Federal statute which requires a commercial lender (bank, savings and loan, mortgage broker) to give a borrower exact information on interest rates and a three-day period in which the borrower may compare and consider competitive terms and cancel the loan agreement. for home mortgage loans that bear rates or fees above a certain amount. The dollar amount of the fee-based trigger has been adjusted to $499 for 2004 based on the annual percentage change reflected in the consumer price index Consumer Price Index (CPI) The CPI, as it is called, measures the prices of consumer goods and services and is a measure of the pace of US inflation. The US Department of Labor publishes the CPI every month. that was in effect on June 1, 2003. The adjustment is effective January 1, 2004. The Home Ownership and Equity Protection Act of 1994 bars credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed the fee-based trigger (initially set at $400 and adjusted annually) or 8 percent of the total loan amount, whichever is larger. |
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