h 1 of the notice is an estimate. language of the parenthetical is optional. _PPENDIX H-CLOSED-END MODEL FORMS AND CLAUSES Models H-1 and H-2. Creditors make several types of changes to ed-end model forms H-1 (credit and H-2 (loan) and still be ed to be in compliance with the lation, provided that the required osures are made clearly and conuously. Permissible changes ine the addition of the information nitted by footnote 37 to § 226.17 "directly related" information as forth in the commentary to 5.17(a). he creditor may also delete or, on ti-purpose forms, indicate inapplie disclosures, such as: The itemization of the amount financed on. (See Samples H-12 through H-15.) The credit life and disability insurance osures. (See Samples H-11 and H-12.) The property insurance disclosures. (See ples H-10 through H-12, and H-14.) The "filing fees" and "non-filing insur" disclosures. (See Samples H-11 and 2.) The prepayment penalty or rebate disures. (See Samples H-12 and H-14.) The total sale price. (See Samples H-11 ugh H-15.) ther permissible changes include: Adding the creditor's address or telene number. (See the commentary to 6.18(a).) Combining required terms where several erical disclosures are the same, for ince, if the "total of payments" equals the al sale price." (See the commentary to 6.18.) Rearranging the sequence or location of disclosures-for instance, by placing the criptive phrases outside the boxes coning the corresponding disclosures, or by uping the descriptors together as a glosy of terms in a separate section of the regated disclosures; by placing the paynt schedule at the top of the form; or by nging the order of the disclosures in the xes, including the annual percentage rate d finance charge boxes. Using brackets, instead of checkboxes, indicate inapplicable disclosures. Using a line for the consumer to initial, her than a checkbox, to indicate an elecn to receive an itemization of the amount anced. Deleting captions for disclosures. • Using a symbol, such as an asterisk, for estimated disclosures, instead of an "e." Adding a signature line to the insurance disclosures to reflect joint policies. Separately itemizing the filing fees. • Revising the late charge disclosure in accordance with the commentary to § 226.18(1). 2. Model H-3. Creditors have considerable flexibility in filling out Model H-3 (itemization of the amount financed). Appropriate revisions, such as those set out in the commentary to § 226.18(c), may be made to this form without loss of protection from civil liability for proper use of the model forms. 3. Models H-4 through H-7. The model clauses are not included in the model forms although they are mandatory for certain transactions. Creditors using the model clauses when applicable to a transaction are deemed to be in compliance with the regulation with regard to that disclosure. 4. Model H-4. This model contains the variable rate model clauses and is intended to give creditors considerable flexibility in structuring variable rate disclosures to fit individual plans. The information about circumstances, limitations, and effects of an increase may be given in terms of the contract interest rate or the annual percentage rate. Clauses are shown for hypothetical examples based on the specific amount of the transaction and based on a representative amount. Creditors may preprint the variable rate disclosures based on a representative amount for similar types of transactions, instead of constructing an individualized example for each transaction. In both representative examples and transaction-specific examples, creditors may refer either to the incremental change in rate, payment amount, or number of payments, or to the resulting rate, payment amount, or number of payments. For example, creditors may state that the rate will increase by 2%, with a corresponding $150 increase in the payment, or creditors may state that the rate will increase to 16%, with a corresponding payment of $850. 5. Model H-5. This contains the demand feature clause. 6. Model H-6. This contains the assumption clause. 7. Model H-7. This contains the required deposit clause. 8. Models H-8 and H-9. These models contain the rescission notices for a typical closed-end transaction and a refinancing, respectively. The last paragraph of each model form contains a blank for the date by which the consumer's notice of cancellation must be sent or delivered. A parenthetical is included to address the situation in which the consumer's right to rescind the transaction exists beyond 3 business days following the date of the transaction, for example, where the notice or material disclosures are delivered late or where the date of the transaction in paragraph 1 of the notice is an estimate. The language of the parenthetical is not optional. of 9. Sample forms. The sample forms (H-10 through H-15) serve a different purpose than the model forms. The samples illustrate various ways adapting the model forms to the individual transactions described in the commentary to Appendix H. The deletions and rearrangments shown relate only to the specific transactions described. As a result, the samples do not provide the general protection from civil liability provided by the model forms and clauses. 10. Sample H-10. This sample illustrates an automobile credit sale. The cash price is $7,500 with a downpayment of $1,500. There is an 8% add-on interest rate and a term of 3 years, with 36 equal monthly payments. The credit life insurance premium and the filing fees are financed by the creditor. There is a $25 credit report fee paid by the consumer before consummation, which is a prepaid finance charge. 11. Sample H-11. This sample illustrates an installment loan. The amount of the loan is $5,000. There is a 12% simple interest rate and a term of 2 years. The date of the transaction is expected to be April 15, 1981, with the first payment due on June 1, 1981. The first payment amount is labelled as an estimate since the transaction date is uncertain. The odd days' interest ($26.67) is collected with the first payment. The remaining 23 monthly payments are equal. 12. Sample H-12. This sample illus trates a refinancing and consolidation loan. The amount of the loan is $5,000. There is a 15% simple interest rate and a term of 3 years. The date of the transaction is April 1, 1981, with the first payment due on May 1, 1981. The first 35 monthly payments are equal. with an odd final payment. The cred:* disability insurance premium is fi nanced. In calculating the annual percentage rate, the U.S. Rule has been used. Since an itemization of the amount financed is included with the disclosures, the statement regarding the consumer's option to receive an itemization is deleted. 13. Samples H-13 through H-15 These samples illustrate various mortgage transactions. They assume that the mortgages are subject to the Rea Estate Settlement Procedures Act (RESPA). As a result, no option regarding the itemization of the amount financed has been included in the sam ples, because providing the good faith estimates of settlement costs required by RESPA satisfies Truth in Lending's amount financed itemization requirement. (See footnote 39 to § 226.18(c). 14. Sample H-13. This sample illustrates a mortgage with a demand feature. The loan amount is $44,900, pay. able in 360 monthly installments at a simple interest rate of 14.75%. The 15 days of interim interest ($294.34) is collected as a prepaid finance charge at the time of consummation of the loan (April 15, 1981). In calculating the disclosure amounts, the minor irregularities provision in § 226.17(c)(4) has been used. The property insurance premiums are not included in the payment schedule. This disclosure statement could be used for notes with the 7-year call option required by the Federal National Mortgage Association (FNMA) in states where due-on-sale clauses are prohibited. 15. Sample H-14. This sample illustrates a variable rate mortgage. The loan amount is $44,900, payable in 360 monthly installments at an initial interest rate of 14.75%. All payment periods are regular. Two points ($898) have been imposed and included in the prepaid finance charge. The note provides that the interest rate may vary with the lender's prime rate, with a um permissible increase of 5% e term of the mortgage. The inrate may not vary more frey than once a year, and may not e by more than 1% annually. luctuations will be reflected in nthly payment amount. ample H-15. This sample illusa graduated payment mortgage 5-year graduation period and a rcent yearly increase in payThe loan amount is $44,900, e in 360 monthly installments imple interest rate of 14.75%. bints ($898), as well as an initial age guarantee insurance premi$225.00, are included in the preinance charge. The mortgage tee insurance premiums are cald on the basis of 4 of 1% of the nding principal balance under nual reduction plan. The abbre disclosure permitted under 8(g)(2) is used for the payment ale for years 6 through 30. The ment disclosure refers to both ies and rebates because informapout penalties is required for the e interest portion of the obligand information about rebates is ed for the mortgage insurance n of the obligation. ly applied to calculate the annual percentage rate for an individual transaction, they may also be utilized to program calculators and computers to perform the calculations. 2. Relation to Board tables. The Board's Annual Percentage Rate Tables also provide creditors with a calculation tool that applies the technical information in Appendix J. An annual percentage rate computed in accordance with the instructions in the tables is deemed to comply with the regulation. Volume I of the tables may be used for credit transactions involving equal payment amounts and periods, as well as for transactions involving any of the following irregularities: odd first period, odd first payment and odd last payment. Volume II of the tables may be used for transactions that involve any type of irregularities. These tables may be obtained from any Federal Reserve Bank or from the Board in Washington, D.C. 20551, upon request. References Statute: Section 107. Other sections: § 226.22. Previous regulation: § 226.40 (Supplement I). 1981 changes: Paragraph (b)(2) has been revised to clarify that the term of the transaction never begins earlier than consummation of the transaction. Paragraph (b)(5)(vi) has been revised to permit creditors in all cases where the transaction term equals a whole number of months, to use either the 12-month method or the 365-day method to compute the number of unit-periods per year. [46 FR 50288, Oct. 9, 1981, as amended at 46 FR 58644, Dec. 3, 1981; 46 FR 60190, Dec. 9, 1981; 46 FR 61067, Dec. 15, 1981] For the purposes of this part,1 unless the context indicates otherwise, the following definitions apply: (a) "Board" means the Board of Governors of the Federal Reserve System. (b) "Consumer complaint" means an allegation by or on behalf of an individual, group of individuals, or other entity that a particular act or practice of a State member bank is unfair or deceptive, or in violation of a regulation issued by the Board pursuant to a Federal statute, or in violation of any other Act or regulation under which the bank must operate. (c) "State member bank" means a bank that is chartered by a State and is a member of the Federal Reserve System. (d) Unless the context indicates otherwise, "bank" shall be construed to mean a "State member bank," and "complaint" to mean a "consumer complaint." (Sec. 18(f), Federal Trade Commission Act, as amended by Pub. L. 93-637) [41 FR 44362, Oct. 8, 1976] § 227.2 Consumer complaint procedure. (a) Submission of complaints. (1) Any consumer having a complaint regarding a State member bank is invited to submit it to the Federal Reserve System. The complaint should be submitted in writing, if possible, and should include the following information: (i) A description of the act or practice that is thought to be unfair or deceptive, or in violation of existing law or regulation, including all relevant facts; (ii) The name and address of the bank that is the subject of the complaint; and (iii) The name and address of the complainant. (2) Consumer complaints should be made to: (i) The Director, Division of Consumer Affairs, Board of Governors of 'The words "this part," as used herein, mean Title 12, Chapter II, Part 227 of the Code of Federal Regulations, cited as 12 CFR Part 227 and designated as Regulation AA. the Federal Reserve System, Washing ton, D.C. 20551; or (ii) The Federal Reserve Bank of the District in which the bank is located The addresses of the Federal Reserve Banks are as follows: Federal Reserve Bank of Boston, 30 Pear Street, Boston, Massachusetts 02106. Federal Reserve Bank of New York, 33 L erty Street, New York, New York 10045 Federal Reserve Bank of Philadelphia, I' North 6th Street, Philadelphia, Pennsy vania 19105. Federal Reserve Bank of Cleveland, 1455 East Sixth Street, Cleveland, Ohio 44101 Federal Reserve Bank of Richmond. 190 North Ninth Street, Richmond, Virgina 23261. Federal Reserve Bank of Chicago, 230 South La Salle Street, Chicago, Illincs 60690. Federal Reserve Bank of St. Louis. 4!! Locust Street, St. Louis, Missouri 63166. Federal Reserve Bank of Minneapolis, 250 Marquette Street, Minneapolis, Minnesota 55480. Federal Reserve Bank of Kansas City, 925 Grand Avenue, Kansas City, Missour 64198. Federal Reserve Bank of Dallas, 400 South Akard Street, Dallas, Texas 75222. Federal Reserve Bank of Atlanta, 104 Mar ietta Street NW., Atlanta, Georgia 30303 Federal Reserve Bank of San Francisco, 400 Sansome Street, San Francisco, California 94120. (b) Response to complaints. Within 15 business days of receipt of a written complaint by the Board or a Federal Reserve Bank, a substantive response or an acknowledgment setting a reasonable time for a substantive response will be sent to the individua: making the complaint. (c) Referrals to other agencies. Complaints received by the Board or a Federal Reserve Bank regarding an act or practice of an institution other than a State member bank will be forwarded to the Federal agency having jurisdiction over that institution. (Sec. 18(f) Federal Trade Commission Act. as amended by Pub. L. 93-637) [41 FR 44362, Oct. 8, 1976, as amended at 42 FR 2950, Jan. 14, 1977] PART 228-COMMUNITY REINVESTMENT Authority. Purposes. Delineation of community. Community Reinvestment Act State it. Files of public comments and recent Assessing the record of performance. Applicability of the Community nvestment Act to certain special pure banks. [ORITY: Community Reinvestment Act 7 (title VIII, Pub. L. 95-128, 91 Stat. 2 U.S.C. 2901 et seq.)); 12 U.S.C. 321, 14, 1816, 1828, 1842. CE: 43 FR 47148, Oct. 12, 1978, unless vise noted. Authority. · Board of Governors of the FedReserve System issues this part to ment the Community ReinvestAct (12 U.S.C. 2901 et seq.). The ations comprising this part are 1 under the authority of the nunity Reinvestment Act and r the provisions of the United s Code authorizing the Board to uct examinations of State-charbanks that are members of the ral Reserve System (12 U.S.C. to conduct examinations of bank ng companies and their subsidiar12 U.S.C. 1844), and to consider cations for domestic branches by e member banks (12 U.S.C. 321), Federal deposit insurance in conon with applications for memberin the Federal Reserve System by e banks (12 U.S.C. 321, 1814, 1816), erger in which the resulting bank d be a State member bank (12 C. 1828), and for formation of, actions of banks by, and mergers of, I holding companies (12 U.S.C. 7. 2 Purposes. e purposes of this regulation are ncourage State member banks to meet the credit needs of their community or communities; to vide guidance to State member Ks as to how the Board will assess the records of State member banks in satisfying their continuing and affirmative obligations to help meet the credit needs of their local communities, including low- and moderateincome neighborhoods, consistent with the safe and sound operation of those banks; and to provide for taking into account those records in connection with certain applications. § 228.3 Delineation of community. (a) Each State member bank shall prepare, and at least annually review, a delineation of the local community or communities that comprise its entire community, without excluding low- and moderate-income neighborhoods. Maps shall be used to portray community delineations. The reasonableness of the delineations will be reviewed by Federal Reserve System examiners. (b) Except as provided in paragraph (c) of this section, a local community consists of the contiguous areas surrounding each office or group of offices, including any low- and moderateincome neighborhoods in those areas. More than one office of a State member bank may be included in the same local community. Unless the Board determines otherwise, a community delineation need not take account of an off-premises electronic facility that receives deposits for more than one depository institution. In preparing its delineation, a bank may use any one of the three bases set forth below. (1) Existing boundaries such as those of standard metropolitan statistical areas (SMSA's) or counties in which the bank's office or offices are located may be used to delineate a local community. Where appropriate, portions of adjacent areas should be included. The bank may make adjustments in the case of areas divided by State borders or significant geographic barriers, or areas that are extremely large or of unusual configuration. In addition, a small bank may delineate those portions of SMSA's or counties it reasonably may be expected to serve. (2) A bank may use its effective lending territory, which is defined as that local area or areas around each office |