Effective January 3, 2003

By the Division of Banks


209 CMR 32.04(4)(a)3. allows premiums for credit life, accident, health, or loss-of-income insurance to be excluded from the finance charge under Truth-in-Lending if, among other conditions, the consumer signs or initials an affirmative written request for the insurance after receiving certain disclosures. This amendment adds a sentence to clause 3., presently contained in federal Regulation Z, that authorizes any consumer in the transaction to sign or initial the request for the insurance. The amendment allows the Massachusetts Truth-in-Lending regulation, 209 CMR 32.00, to maintain regulatory consistency with federal Regulation Z. The Commonwealth has an exemption from federal Regulation Z as long as such consistency is maintained or any differences provide more consumer protection.

The amendment to 209 CMR 32.04(4)(c) is a technical correction to correct a cross-reference in paragraph (c) from 32.04(4)(c)2. to 32.04(4)(c)4.

The amendment to 209 CMR 32.04(4)(c) 4. is a technical correction to correct the cross-reference found in clause 4 from 32.04(4)(c)1. to just 32.04(4)(c).

209 CMR 32.05A(5)(a)1 is being amended to correct an incorrect cross-reference in this paragraph.

Footnote 10 c is being amended to update the cross-reference to the historical example required in this section.

Footnote 26 is being amended to correct two separate cross-references in the footnote.

209 CMR 32.05B(6)(b) prohibits a creditor from terminating a home equity plan and demanding repayment of the entire outstanding balance in advance of the original term unless certain conditions are met. This amendment adds language to paragraph (b) which creates an exception to this prohibition for reverse mortgage transactions that are governed by a separate paragraph, paragraph (d). This amendment would establish regulatory consistency with federal Regulation Z.

The amendment to 209 CMR 32.05B(6)(b) adds a new clause, clause 4., to paragraph (b) to add a new condition which would allow a creditor to terminate a home equity plan extended by a depository institution to its executive officers under certain circumstances. The Division is incorporating this provision into 209 CMR 32.00 to maintain regulatory consistency with Regulation Z.

The amendment to 209 CMR 32.05B(6) which adds paragraph (d) establishes the conditions under which a creditor may terminate a home equity plan in reverse mortgage transactions. These conditions are presently set forth in the reverse mortgage statute, M.G.L. ch. 167E, section 2, subsection B, paragraph 14A.. However, in response to a request from the Federal Reserve Board, this amendment incorporates these conditions into 209 CMR 32.00.

209 CMR 32.15(4)(c) is being amended to correct a cross-reference to another section of the regulation.

209 CMR 32.17 is being amended to renumber Footnote 38 a as Footnote 38 and Footnote 38 b as Footnote 39.

209 CMR 32.17(3)(b)2. is being amended to delete the reference to a footnote at the end of the clause.

209 CMR 32.17(6) is being amended to reference Footnote 39 instead of Footnote 38 b.

209 CMR 32.18(3)(a)3. is being amended to correct the footnote reference from Footnote 40 to Footnote 41.

209 CMR 32.18(4) is being amended to delete a reference to Footnote 41.

209 CMR 32.19(2)(b) is being amended and re-formatted to make it consistent with the same section of Federal Regulation Z.

209 CMR 32.23(1)(c) is being amended to correct a cross-reference in this paragraph.

Footnote 47 is being amended to correct a cross-reference to another section contained in the footnote.

209 CMR 34.00 establishes the maximum loan amount for different classes of mortgage loans. The amendment to repeal section 34.04 in its entirety is necessary because the Commissioner of Banks is no longer required to establish a maximum loan amount for a reverse mortgage loan. The statute was amended by Chapter 283 of the Acts of 1998 and the provision requiring the Commissioner to establish the maximum loan amount was deleted.

209 CMR 34.01 is being amended to delete a cross reference to reverse mortgage loans contained in section 34.04 because that section is being repealed.

The amendment to 209 CMR 38.00 consists of putting certain important words in the mortgage application and approval process into bold-face type. The original regulation contained these words in bold-face type but the bold-face type was inadvertently eliminated the last time the regulation was amended.

209 CMR 51.00 is being repealed because it contained a sunset provision which stated that it expired on December 31, 2001. The Division is repealing the regulation so that it may be deleted from the Code of Massachusetts Regulations.