REGULATION Z: REVISION OF REQUIREMENTS FOR CREDIT CARD DISCLOSURES.

The Federal Reserve Board published on September 28, 2000, a final rule amending Regulation Z, which implements the Truth in Lending Act, to revise the disclosure requirements for credit and charge card solicitations and applications.

The act requires that direct mail and other applications and solicitations to open card accounts must disclose the annual percentage rate (APR) and other cost information, generally in tabular form. The Regulation Z amendments are intended to make the disclosures more noticeable and easier to understand.

Under the final rule, disclosures must be in a readily understandable form and readily noticeable to consumers. The APR for purchase transactions must be in eighteen-point type. Cash advance and balance transfer APRs must be included in the table. Balance transfer fees must be disclosed either in or outside of the table. Additional guidance is provided on the requirement that the table be prominently located and on the level of detail about cost information required or permitted in the table. The revisions are effective immediately; compliance is mandatory as of October 1, 2001.

The Board believes that the revisions to the disclosure requirements should help promote increased consumer awareness of the terms and rates of credit card financing.