The Federal Reserve Board on Wednesday proposed revising the staff interpretation of its Truth-in-Lending regulation to include payday loans as credit transactions that require consumer protection disclosures.

The short-term cash advances are made in exchange for post-dated checks from consumers in the amount of the advance plus a finance charge. Comments are due Jan. 10. The clarification would affect banking companies that own or are affiliated with payday lenders.

The Fed also announced it adjusted the dollar amount of mortgage closing fees that trigger additional disclosure requirements. Effective Jan. 1 it will be $451, up from the current $441, or 8% of the total loan amount, whichever is greater.

-- Katharine Fraser

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