B-168065, NOV. 19, 1969
Highlights
WAS NOT EFFECTIVE UNTIL JULY 1. WAS PREDICATED UPON TRUTH IN LENDING ACT. WAS NOT INTENDED TO BE EFFECTIVE UNTIL JULY 1. 1969 MAY BE REIMBURSED FOR LOAN ORIGINATION FEE SINCE REAL ESTATE TRANSACTION WAS CONSUMMATED PRIOR TO JULY 1. REIMBURSEMENT FOR THE ORIGINATION FEE WAS DISALLOWED ON THE EMPLOYEE'S ORIGINAL VOUCHER FOR THE REASON THAT SUCH FEE WAS REMOVED FROM THE LIST OF REIMBURSABLE ITEMS UNDER SUBSECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. OR EXPENSE IS REIMBURSABLE WHICH IS DETERMINED TO BE A PART OF THE FINANCE CHARGE UNDER THE TRUTH IN LENDING ACT. REGULATION Z ISSUED PURSUANT THERETO BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. * * *" THE REVISION OF SUBSECTION 4.2D IS EXPLAINED ON PAGE 4 OF TRANSMITTAL MEMORANDUM NO. 5 AS FOLLOWS: "THE REVISION OF 4.2D PROVIDES FOR REIMBURSEMENT OF MORTGAGE PREPAYMENT CHARGES.
B-168065, NOV. 19, 1969
OFFICERS AND EMPLOYEES--TRANSFERS--RELOCATION EXPENSES--HOUSE PURCHASE- LOAN ORIGINATION FEE SINCE EFFECTIVE DATE OF TRUTH IN LENDING ACT, PUB. L. 90-321, WAS NOT EFFECTIVE UNTIL JULY 1, 1969 AND DELETION OF "LOAN ORIGINATION FEE" FROM COVERAGE OF BUREAU OF BUDGET CIR. NO. A-56, AS REVISED BY TRANSMITTAL MEMORANDUM NO. 5, WAS PREDICATED UPON TRUTH IN LENDING ACT, AND WAS NOT INTENDED TO BE EFFECTIVE UNTIL JULY 1, 1969, EMPLOYEE WHO PURCHASED RESIDENCE AT NEW OFFICIAL STATION ON JUNE 28, 1969 MAY BE REIMBURSED FOR LOAN ORIGINATION FEE SINCE REAL ESTATE TRANSACTION WAS CONSUMMATED PRIOR TO JULY 1, 1969.
TO MR. ROBERT J. SCHULLERY:
WE REFER TO YOUR LETTER OF OCTOBER 7, 1969, WITH ENCLOSURES, REQUESTING OUR DECISION WHETHER YOU MAY CERTIFY FOR PAYMENT A VOUCHER FOR $269 IN FAVOR OF MR. PAUL K. ROSENWALD, AN EMPLOYEE OF THE FEDERAL AVIATION ADMINISTRATION.
THE AMOUNT CLAIMED REPRESENTS A LOAN ORIGINATION FEE INCURRED BY MR. ROSENWALD IN CONNECTION WITH HIS PURCHASE ON JUNE 28, 1969, OF A RESIDENCE AT HIS NEW OFFICIAL STATION. REIMBURSEMENT FOR THE ORIGINATION FEE WAS DISALLOWED ON THE EMPLOYEE'S ORIGINAL VOUCHER FOR THE REASON THAT SUCH FEE WAS REMOVED FROM THE LIST OF REIMBURSABLE ITEMS UNDER SUBSECTION 4.2D OF BUREAU OF THE BUDGET CIRCULAR NO. A-56 BY THE AMENDMENTS CONTAINED IN ATTACHMENT A TO TRANSMITTAL MEMORANDUM NO. 5, EFFECTIVE JUNE 26, 1969.
SUBSECTION 4.2D OF CIRCULAR NO. A-56, REVISED, JUNE 26, 1969, PROVIDES IN PERTINENT PART AS FOLLOWS:
"* * * NOTWITHSTANDING THE ABOVE, NO FEE, COST, CHARGE, OR EXPENSE IS REIMBURSABLE WHICH IS DETERMINED TO BE A PART OF THE FINANCE CHARGE UNDER THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW 90-321, AND REGULATION Z ISSUED PURSUANT THERETO BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. * * *"
THE REVISION OF SUBSECTION 4.2D IS EXPLAINED ON PAGE 4 OF TRANSMITTAL MEMORANDUM NO. 5 AS FOLLOWS:
"THE REVISION OF 4.2D PROVIDES FOR REIMBURSEMENT OF MORTGAGE PREPAYMENT CHARGES, CLARIFIES THE TYPES OF EXPENSES THAT ARE REIMBURSABLE IN CONNECTION WITH THE CONSTRUCTION OF A RESIDENCE, REMOVES LENDER'S LOAN ORIGINATION FEE FROM THE LISTING OF REIMBURSABLE EXPENSES, AND PROHIBITS REIMBURSEMENT FOR EXPENSES WHICH ARE DETERMINED TO BE A PART OF THE FINANCE CHARGE UNDER THE TRUTH IN LENDING ACT. (THE TRUTH IN LENDING ACT, TITLE I, PUBLIC LAW 90-321, IS EFFECTIVE JULY 1, 969.)"
EXCEPT FOR CHAPTER 1 (GENERAL PROVISIONS) THE PROVISIONS OF THE TRUTH IN LENDING ACT, PUBLIC LAW 90-321, WERE NOT EFFECTIVE UNTIL JULY 1, 1969. ALSO, REGULATION Z ISSUED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM PURSUANT TO SECTION 105 OF THE ACT WAS NOT EFFECTIVE UNTIL JULY 1, 1969. IT IS OUR VIEW THAT THE DELETION OF "LOAN ORIGINATION FEE" FROM THE COVERAGE OF CIRCULAR NO. A-56, AS REVISED BY TRANSMITTAL MEMORANDUM NO. 5, WAS PREDICATED UPON THE TRUTH IN LENDING ACT AND, THEREFORE, WAS NOT INTENDED TO BE EFFECTIVE UNTIL JULY 1, 1969.
ACCORDINGLY, SINCE THE REAL ESTATE TRANSACTION IN THE PRESENT CASE WAS CONSUMMATED PRIOR TO JULY 1, 1969, REIMBURSEMENT FOR THE LOAN ORIGINATION FEE MAY BE ALLOWED.
THE VOUCHER WHICH IS RETURNED HEREWITH MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE PROPER.