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DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION

 

30

BUREAU OF CONSUMER
CREDIT PROTECTION
Chapter 240

 

029

BUREAU OF FINANCIAL
INSTITUTIONS
Chapter 138 (Regulation 38)

 

TRUTH IN LENDING; REGULATION Z-2

Summary

 This rule was originally promulgated in 1981 and re-promulgated in 1986, 1989, 1992, 1997, 1998 and 2002. This joint re-promulgation, which repeals and replaces both Bureau of Financial Institution Rules, Chapter 138, and Bureau of Consumer Credit Protection Rules, Chapter 240, adopts the latest federal Truth-in-Lending regulations by reference so as to implement Article VIII of the Maine Consumer Credit Code.
 
SECTION 1. AUTHORITY

This rule is being adopted pursuant to 9-A M.R.S. §§ 6-104 and 8-104 by the Bureau of Consumer Credit Protection and the Bureau of Financial Institutions, as the agencies responsible for the administration of the Maine Consumer Credit Code for supervised lenders and supervised financial organizations.
 
SECTION 2. PURPOSE

This rule mandates how the cost of credit and leases must be disclosed to consumers and how billing errors must be resolved in open-end credit.
 
SECTION 3. DEFINITIONS

1. "Administrator" means a person as defined in 9-A M.R.S. § 1-301(2).

2. "Code" means the Maine Consumer Credit Code, Title 9-A M.R.S.
 
SECTION 4. GENERAL PROVISIONS

Except as provided below, the Administrators hereby adopt all final provisions of federal Regulation Z (12 Code of Federal Regulations, Part 226) adopted through February 22, 2010, including all appendices, and all provisions of federal Regulation M (12 Code of Federal Regulations, Part 213) adopted through February 22, 2010 by the Board of Governors of the Federal Reserve System pursuant to Title I (Truth-in-Lending Act) and Title V (General Provisions) of the Consumer Credit Protection Act (15 U.S.C. § 1601 et seq.

The following provisions of Regulations Z and M are not adopted:

1. Reg. Z, § 226.1(e) concerning enforcement and liability, to the extent that additional penalties are set forth in §§ 8-206-E and 8-209 of the Code;

2. Reg. Z, § 226.2(a)(6), the definition of the term "business day," to the extent it differs from the definition of "business day" in § 1-301(6-A) of the Code;

3. Reg. Z, § 226.2(a)(14), the definition of the term "credit," to the extent it differs from the definition of "credit" in § 1-301(15) of the Code;

4. Reg. Z, § 226.2(a)(16), the definition of the term "credit sale," to the extent it differs from the definition of "consumer credit sale" in § 1-301(11) of the Code;

5. Reg. Z, § 226.3(b), which exempts credit (other than credit secured by real property) over $25,000, to the extent there is conflict with § 1-301(11)(A)(vi) (which extends the provisions of the Code to debts secured by manufactured housing and to motor vehicle sales in which the amount financed does not exceed $ 35,000) and § 1-301(14)(A)(iv)(b) (which extends the provisions of the Code to unsecured loans not exceeding $35,000 if made by a supervised lender other than a supervised financial organization);

6. Reg. Z, § 226.4(d)(1)(ii), concerning the form of disclosure of the cost of credit insurance, to the extent that additional substantive and disclosure requirements are imposed by § 4-104 of the Code;

7. Reg. Z, § 226.5a(b)(1)(i), which sets forth the requirements for disclosure of the variable rate feature of a credit or charge card plan, to the extent that its provisions are more limited than those contained in § 3-310(1)(D) of the Code;

8. Reg. Z, § 226.5a(b)(5), which sets forth the requirements for disclosure of a credit card plan's "grace period," to the extent that it contemplates grace periods shorter than the minimum 25-day requirements of §§ 2-202(5) and 2-402(4) of the Code;

9. Reg. Z, §§ 226.5a(b)(9) and 226.5a(b)(10), which set forth the requirements for disclosure of late payment fees and over-the-limit fees, to the extent that such fees are not expressly authorized by § 2-501 of the Code for transactions other than those involving unsecured lender credit cards, for which late payment fees and over-the-limit fees are authorized in § 2-501(4);

10. Reg. Z, § 226.5a(g), which defines various balance computation or calculation methods, to the extent that it contemplates methods other than the "average daily balance (excluding new purchases)," the "average daily balance (including new purchases)," and the "adjusted balance" methods, which are the only methods permitted by §§ 2-202(2) and 2-402(2) of the Code;

11. Reg. Z, § 226.6(a)(2), footnote 12, which sets forth the requirements for disclosure of the variable rate feature of an open-end credit plan, to the extent that its provisions are more limited than those contained in § 3-310(1)(D) of the Code;

12.  Reg. Z, § 226.9(c)(1), concerning the 15-day notice requirement for changes in terms for home equity plans and other forms of open-end credit that are not credit card accounts, to the extent there is a conflict with the 30-day notice requirement in § 3-204 of the Code;

13. Reg. Z, § 226.12(f) concerning discounts, to the extent that sellers in sales transactions are also prohibited from imposing a surcharge on a card holder who elects to use a card in lieu of payment by cash, check or similar means as set forth in § 8-303(2) of the Code;   

14. Reg. Z, § 226.17(c)(5) and Official Staff Commentary to Reg. Z, § 226.17(c)(1)-17 to the extent there is a conflict with §§8-103 (1-A)(EE) and 8-106(6) of the Code;

15.  Reg. Z, § 226.19(a)(2)(ii), concerning the receipt of corrected disclosures, to the extent that additional disclosure requirements regarding prepayment penalties are imposed by § 8-206(3)(B) of the Code;

16.  Reg. Z, § 226.24(i)(4), to the extent there is a conflict with § 241(15) of Title 9-B, the Maine Banking Code;

17.  Reg. Z, § 226.32 concerning requirements for certain closed-end home mortgages referred to in the Code as high-rate, high-fee mortgages, as a result of this section being supplanted by the provisions of §§ 8-206-A and 8-206-H of the Code, including terms used in §§ 8-206-A and 8-206-H of the Code and defined in
§ 8-103(1-A) and elsewhere in the Code, to the extent there is a conflict with terms defined in federal Regulation Z;

18.  Reg. Z, § 226.34, concerning prohibited acts or practices in connection with certain closed-end home mortgages referred to in the Code as high-rate, high-fee mortgages, as a result of this section being supplanted by the provisions of §§ 8-206-A, 8-206-H and 8-206-I of the Code, including terms used in §§ 8-206-A, 8-206-H and 8-206-I of the Code and defined in § 8-103(1-A) and elsewhere in the Code, to the extent there is a conflict with terms defined in federal Regulation Z;

19.  Reg. Z, § 226.35, concerning prohibited acts or practices in connection with higher-priced mortgage loans, as a result of this section being supplanted by the provisions of § 8-206-I of the Code, including terms used in § 8-206-I of the Code and defined in § 8-103(1-A) and elsewhere in the Code, to the extent there is a conflict with terms defined in federal Regulation Z;

20.  Reg. Z, § 226.36, concerning prohibited acts or practices in connection with credit secured by a consumer’s principal dwelling, as a result of this section being supplanted by § 8-206-J of the Code, including terms used in § 8-206-J of the Code and defined in § 8-103(1-A) and elsewhere in the Code, to the extent there is a conflict with terms defined in federal Regulation Z;

21.  Reg. Z, § 226.52(a)(2), concerning the limitations on fees, to the extent that § 2-501(4)(D) imposes a limit on attorney’s fees of not more than 15% of the unpaid debt incurred in connection with a legal action brought by an attorney who is not a salaried employee of the creditor;
 
22. Reg. Z, Appendix G-1, sub-§§ (b) and (e), to the extent that there is a conflict with §§ 2-202(2) and 2-402(2) of the Code;

23. Reg. M, § 213.4(m)(2) concerning the value of the leased property upon expiration of the lease, to the extent there is a conflict with §3-401 of the Code; and

24. Reg. M, § 213.4(o) and Official Staff Commentary to Reg. M, § 213.4(o)-3, to the extent there is a conflict with Title 11 M.R.S. § 2-1221(2)(b).

The Administrators shall follow the interpretations set forth in the Official Commentaries to Regulations Z and M issued by the Board of Governors of the Federal Reserve System, except for the Official Staff Commentary to provisions for which an exception has been made under this rule or unless the Administrators issue either a rule or advisory ruling, which explains a conflict between Maine law and federal Regulation Z or M and establishes the interpretation of the Administrators.  However, the Administrators shall follow the Official Staff Commentaries relating to §§ 226.32, 226.34 and 226.36 of federal Regulation Z, even though these sections have been excepted from this Regulation Z-2 in their entirety, to the extent that these Official Staff Commentaries relate to language that is identical or substantially similar to State law.
 

 

Drafting Note: These provisions include the final rule found in FR 7658 published by the Federal Register on February 22, 2010, which implements provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009.  Copies of 12 CFR Part 226 may be obtained at cost from either the Bureau of Financial Institutions or the Bureau of Consumer Credit Protection, or from the Federal Reserve Bank of Boston, 600 Atlantic Avenue, Boston, MA 02106 tel. (617) 973-3000. In addition, a copy may be obtained via the Internet at http://www.federalreserve.gov/Regulations/RegRef.htm#z.

Drafting Note: Copies of 12 CFR Part 213 may be obtained at cost from the Bureau of Financial Institutions or from the Bureau of Consumer Credit Protection, or from the Federal Reserve Bank of Boston, 600 Atlantic Avenue, Boston, MA 02106 tel. (617) 973-3000. In addition, a copy may be obtained via the Internet at http://www.federalreserve.gov/Regulations/RegRef.htm#m.

Drafting Note: Readers should be aware that, to the extent that provisions of federal Regulation Z have been adopted in this Regulation Z-2, so also have the effective and mandatory compliance dates in federal Regulation Z been incorporated into this Regulation Z-2 but only with respect to those dates in federal Regulation Z that are prospective.  To the extent that provisions of federal Regulation Z have been adopted with effective and mandatory compliance dates that have already passed, the effective and mandatory compliance dates of these adopted provisions of federal Regulation Z-2 are the effective date of this Regulation Z-2.

Drafting Note: The “ability to repay” provisions in federal and Maine law are substantially the same, but for the provision in 12 CFR § 226.34(a)(4)(ii)(B) not found in Maine law.

 

 

 

Last Updated: June 5, 2013