April 15, 2002 News Archive

Revisions to Staff Commentary on Regulation Z
The Board issued a press release on revisions to the staff commentary on Regulation Z (Truth in Lending). The revisions clarify how creditors that place Truth in Lending Act disclosures on the same document with the credit contract may satisfy the requirement for providing the disclosures, in a form the consumer may keep, before consummation. The revisions also provide guidance on disclosing costs for certain credit insurance policies and on the definition of "business day" for purposes of the right to rescind certain home-secured loans. The revisions are effective immediately.

Agencies issue final rule lowering risk weighting for claims on securities firms
In a joint press release on April 9, the federal banking agencies issued a final rule(PDF) amending their risk-based capital standards for banks, bank holding companies and savings associations (institutions) to reduce the risk weight applied to claims on, or guaranteed by, qualifying securities firms. The final rule lowers the risk weight applied to claims on, or guaranteed by, qualifying securities firms from 100 percent to 20 percent. This change is consistent with the treatment of claims on securities firms under an April 1998 amendment to the Basel Accord.

The final rule is effective July 1, 2002; however, institutions may choose to immediately apply the provisions of the final rule in the risk-based capital calculations for the March 31, 2002 call reports.

Governor Gramlich remarks on the Community Reinvestment Act
On April 8 in an address at the Consumer Bankers' Association Community Reinvestment Act Conference in Arlington, Virginia, Governor Gramlich remarked on the twenty-fifth anniversary of the Community Reinvestment Act (CRA). His remarks included the changes in the financial landscape that have taken place over these years, questions raised about the geographical focus of CRA, banking industry concerns of the profitability of CRA-related lending, the lack of viable opportunities within CRA markets, and community development successes.