Disclosures for Adjustable-rate Mortgage Loans, Adjustment Notices, and Interest-rate Caps

The Office of Thrift Supervision (OTS) is issuing this interim final rule revising the initial disclosure requirements for adjustable- rate mortgage loans (ARMs) by savings associations. These changes conform the OTS rule to the parallel provisions in Regulation Z, as recently amended by the Federal Reserve Board (FRB). The revised rule permits a savings association to provide a borrower either a fifteen- year historical example of interest rates and payments or a statement that the periodic payment may substantially increase or decrease (together with the maximum interest rate and payment based on a $10,000 loan).

Agency Contact: Timothy R. Burniston, Director, (202) 906-5629, Compliance Policy; Susan Miles, Attorney, (202) 906-6798, or Karen Osterloh, Assistant Chief Counsel, (202) 906-6639, Regulations and Legislation Division, Chief Counsel's Office, Office of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.