Consumer Leasing; Extension of Comment Period

FEDERAL RESERVE SYSTEM

12 CFR Part 213

[Regulation M; Docket No. R-0892 and Docket No. R-0893]

Consumer Leasing; Extension of Comment Period

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Proposed rule and official staff interpretation; extension of

comment period.

-----------------------------------------------------------------------

SUMMARY: On September 20, 1995, the Board published a request for

comment on proposed amendments to Regulation M, which implements the

Consumer Leasing Act (60 FR 48752). At that time, the Board also

proposed revisions to the official staff commentary to Regulation M,

which were published in the same issue of the Federal Register (60 FR

48769). The Consumer Leasing Act and Regulation M require lessors to

provide uniform cost and other disclosures about consumer lease

transactions. The Board's proposal contains several substantive

amendments to the regulation and would also simplify and clarify its

provisions. In order to obtain additional views on the proposal from

individual consumers, the Board has extended the public comment period

for 90 days. The comment period for the proposed revisions to the

commentary is similarly extended for 90 days.

DATES: Comments must be received by February 15, 1996.

ADDRESSES: Comments should refer to Docket No. R-0892 and Docket No. R-

0893, and be mailed to William W. Wiles, Secretary, Board of Governors

of the Federal Reserve System, 20th Street and Constitution Avenue NW.,

Washington, DC 20551. Comments also may be delivered to room B-2222 of

the Eccles Building between 8:45 a.m. and 5:15 p.m. weekdays, or to the

guard station in the Eccles Building courtyard on 20th Street NW.,

(between Constitution Avenue and C Street) any time. Comments may be

inspected in room MP-500 of the Martin Building between 9 a.m. and 5

p.m. weekdays, except as provided in 12 CFR 261.8 of the Board's rules

regarding the availability of information.

FOR FURTHER INFORMATION CONTACT: Kyung H. Cho-Miller, Obrea O.

Poindexter, or W. Kurt Schumacher, Staff Attorneys, Division of

Consumer and Community Affairs, Board of Governors of the Federal

Reserve System, Washington, DC 20551, at (202) 452-2412 or 452-3667.

For users of Telecommunications Device for the Deaf (TDD), please

contact Dorothea Thompson at (202) 452-3544.

SUPPLEMENTARY INFORMATION: The Consumer Leasing Act (CLA), 15 U.S.C.

1667-1667e, was enacted into law in 1976 as an amendment to the Truth

in Lending Act (TILA), 15 U.S.C. 1601 et seq. The Board was given

rulewriting authority, and its Regulation M (12 CFR part 213)

implements the CLA. An official staff commentary that interprets the

regulation has also been published (Supplement I-CL-1 to 12 CFR 213).

The CLA generally governs consumer leases of personal property

involving $25,000 or less and a term of more than four months. An

automobile lease is the most common type of consumer lease covered by

the CLA. Like the credit provisions of the TILA, the CLA requires

lessors to provide uniform cost and other disclosures in consumer lease

transactions and lease advertising. Prior to entering into a lease

agreement, lessors must give consumers fifteen to twenty disclosures,

including the amount of initial charges to be paid, an identification

of leased property, a payment schedule, the responsibilities for

maintaining the leased property, and the liability for terminating a

lease early.

The Board's Regulatory Planning and Review Program calls for the

periodic review of Board regulations with four goals in mind: To

clarify and simplify regulatory language; to determine whether

regulatory amendments are needed to address technological and other

developments; to reduce undue regulatory burden on the industry; and to

delete obsolete provisions. On September 20, 1995, the Board published

proposed revisions to Regulation M for comment (60 FR 48752). The

proposal contains several substantive revisions to the regulation, for

example: additional disclosure requirements about early termination

charges, the gross cost of leases, the residual value, and the

estimated lease charge; a requirement that certain leasing disclosures

be segregated from other information; and pursuant to a statutory

change, revisions to the advertising provisions for radio and

television. The proposal also simplifies the language and format of the

regulation to state the requirements more clearly.

The Board is extending the comment period until February 15, 1996,

in order to obtain views on the proposals from consumers who have

experience in leasing or are interested in leasing, by inviting certain

individuals to participate in focus groups. The focus group

participants will be asked to address key elements of the Board's

proposed amendments to Regulation M and to provide comments on the

proposed consumer leasing forms.

During the extension period, the Board's staff will undertake its

review and analysis of the comments that have already been filed. The

comment period is being extended primarily for the purpose of

conducting these focus group interviews. Other members of the public

may submit comments during this period, but they are encouraged to

submit them as soon as possible. The Board does not expect this

extension to delay the implementation of the final rule. The Board

anticipates that revisions to Regulation M and the official staff

commentary will be adopted in final form in the second quarter of 1996.

Board of Governors of the Federal Reserve System, November 30,

1995.

William W. Wiles,

Secretary of the Board.

[FR Doc. 95-29697 Filed 12-5-95; 8:45 am]

BILLING CODE 6210-01-P