–Proposed Rules Raise Coverage from Current $25,000; Indexed Thereafter
WASHINGTON (MNI) – The Federal Reserve issued the following
notification Monday, signalling increases in Dodd-Frank consumer
protections to credit transactions, including auto leases, up to
$50,000:
The Federal Reserve Board on Monday proposed two rules that would
expand the coverage of consumer protection regulations to credit
transactions and leases of higher dollar amounts.
The proposed rules would amend Regulation Z (Truth in Lending) and
Regulation M (Consumer Leasing) to implement a provision of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank
Act). Effective July 21, 2011, the Dodd-Frank Act requires that the
protections of the Truth in Lending Act (TILA) and the Consumer Leasing
Act (CLA) apply to consumer credit transactions and consumer leases up
to $50,000, compared with $25,000 currently. This amount will be
adjusted annually to reflect any increase in the Consumer Price Index.
TILA requires creditors to disclose key terms of consumer loans and
prohibits creditors from engaging in certain practices with respect to
those loans. Currently, consumer loans of more than $25,000 are
generally exempt from TILA. However, private education loans and loans
secured by real property (such as mortgages) are subject to TILA
regardless of the amount of the loan.
The CLA requires lessors to provide consumers with disclosures
regarding the cost and other terms of personal property leases. An
automobile lease is the most common type of consumer lease covered by
the CLA. Currently, a lease is exempt from the CLA if the consumers
total obligation exceeds $25,000.
The notices that will be published in the Federal Register are
attached. Comments on the proposals must be submitted by the later of 30
days after publication in the Federal Register or February 1, 2011.
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$]
