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ICBA Asks Fed to Withdraw "Clear and Conspicuous" Proposal

FEBRUARY 6, 2004


ICBA Asks Fed to Withdraw "Clear and Conspicuous" Proposal

The ICBA urged the Federal Reserve to withdraw its proposal to adopt a uniform definition for "clear and conspicuous" consumer disclosures, unless the Fed can assure that the changes will not require revision of existing disclosures. The Fed proposed to apply the definition in Reg P (privacy ) to Regs B, E, M, Z and DD (equal credit, electronic fund transfers, consumer leasing, Truth-in-Lending and Truth-in-Savings).

"While the ICBA generally believes that consistency in regulatory definitions is appropriate and can serve to reduce regulatory burden and cost, we are very concerned that this proposal may produce the unintended consequence of time-consuming and costly review and revisions of existing disclosures to ensure compliance with a new standard," wrote ICBA chairman Rusty Cloutier.

The ICBA suggested two alternative approaches: incorporate the change over time during regular review of each regulation, or clearly specify that the revised definition is not a substantive change and that disclosure formats acceptable under existing regulations are acceptable under the revised definition.

The ICBA agreed with an additional change to Reg Z, Truth-in-Lending, clarifying that "amount" means a numerical figure rather than a narrative description. ICBA also urged the Fed to ensure that banks are protected when a customer exercises the right of rescission but, under court order, the bank must release the lien before the principal balance has been returned. The full ICBA letter is available at www.icba.org.