ALEXANDRIA, Va.-In a recent legal opinion letter, NCUA hasadvised that the addition of an option to defer payments on loansmay trigger additional Truth in Lending Act disclosures. “A creditunion's addition of an option to defer or skip a payment to anopen-end loan after giving the initial disclosures may triggeradditional disclosure requirements. No additional disclosures arenecessary if the credit union adds the feature within 30 days afterproviding the initial disclosures, and the finance charge is thesame,” NCUA Associate General Counsel Sheila Albin wrote in theMarch 28 legal opinion letter (05-0903). After 30 days, the creditunion must provide additional disclosures. Also, any fee chargedfor use of the option is generally not a finance charge, but, ifthe finance charge terms are different from the initialdisclosures, a credit union must give disclosures regarding thefinance charges applicable to the option. Skip payment features onclosed-end credit after the initial offer do not require additionaldisclosures, unless “(1) initial disclosures are renderedinaccurate before the consummation of the loan; (2) the loaninvolves certain residential mortgages and variable ratetransactions; or (3) a member refinances, assumes, or incurs avariable rate adjustment to closed-end credit.” Albin continued,“While the disclosure rules for closed-end credit do notspecifically address supplemental features or changes in its terms,the official staff interpretations to Regulation Z state thatdeferral of individual installments will not constitute arefinancing, for which subsequent disclosures are required, unlessit is accomplished by the cancellation of the original obligationand the substitution of a new one.” She also cited an appellatecourt decision stating, “[n]o specific duty arises [with closed-endcredit] to make post-consummation disclosures under the statute orregulations, and each payment deferral cannot be construed as a newcredit transaction, triggering TILA's disclosure requirements.”