Revised July 27, 2009 This memorandum is revised to (i) address questions regarding the permitted APR tolerance and (ii) to clarify statements regarding the business purpose exemption. Please refer to the Endnotes attached to this memorandum. In all other respects this memorandum remains the same. In a final rule published in the May 19, 2009 issue of the Federal Register (the “May 2009 final rule”), the Federal Reserve Board (“Board”) amends the early disclosure requirements of Section 226.19(a) of Regulation Z to require: (1) early disclosures for all closed-end, dwelling-secured loans subject to Regulation Z and Regulation X (i.e., RESPA loans); and, (2) additional seven-business-day and three-business-day early disclosure requirements for these loans in addition to the existing disclosure requirement of Section 226.19(a)(1) requiring initial disclosures within three business days of loan application. The May 2009 final rule revises the Board’s July 30, 2008 final rule (“July 2008 final rule”) that also amended the early disclosure requirements of §226.19(a)(1). The May 2009 final rule will apply to all closed-end, dwelling-secured loans for which the creditor receives a written application on or after July 30, 2009, and will require a major change in the pre-closing disclosure procedures for all lenders that engage in this type of lending. In discussing the May 2009 final rule, this memorandum also incorporates and revises, as necessary, our January 9, 2009 memorandum on the July 2008 final rule’s amendments to Section 226.19(a)(1); thus, making it unnecessary to refer to both memoranda in order to get a complete explanation of the Board’s 2008 and 2009 final rule changes to Section 226.19(a).