I need some help with HOEPA. I tried searching previous threads and could not find the answer to my question.

Section 226.32(a)(1)(i) of Regulation Z says to use the "yield on Treasury securities having comparable periods of maturity to the loan maturity as of the fifteenth day of the month immediately preceding the month in which the application for the extension of credit is received ...". The Official Staff Commentary to this section says that if the 15th day of the month is not a business day, the creditor must use the yield as of the business day immediately preceding the 15th.

If I look at the H-15 that was released on 8/19/02, I would use the values from the 8/15/02 column to perform the calculations for applications received in September. Is this correct if the rule were effective now? When I reviewed the article on HOEPA on the Federal Reserve Bank of Dallas' web site, I saw that the example they used involved an application received in April 2002. They referred to the H-15 for 3/15/02. They used 5.34 which was the value from the weekly average yield for the week ending 3/15/02 for a 10 year security. They did not use 5.35 which was the result for 3/15/02. In this instance the difference was only .01. Is the FRB of Dallas correct in using the weekly average yield? If so, then for September 2002 loan applications would I have to use the weekly average yield values for the week ending 8/9/02 since this would be the last value available as of 8/15/02? For purposes of ARM adjustments we use the weekly average yield. Nothing in the HOEPA rule refers to using the weekly average yield. It had said that instead of using the H-15 you could use the actual auction results published in major financial newspapers.

Your thoughts on this would be greatly appreciated. Thank you. Thank you.

At a workshop I attended in July, sponsered by the Indiana Bankers Association (IBA), and presented by Pegasus Educational Services, we were instructed to use the daily rate.

I agree with dpersfull that you should use the daily rate. However, in your example for September you would use the 7/15/02 rate, not 8/15/02 since this is the rate on the 15th day of the month preceding the month in which the application is received.

If you received the application in September, why would you use the rate from July???

I agree, 8/15 is the 15th of the month precedeing the month (Sept.) in which the application was taken.

To tell you the truth, I never could keep July (7) August (8) and September (9) straight in my head. Sorry for the goof up!

Thanks for your help. I had thought all along that the daily rate should be used but I got confused by the FRB of Dallas example.

So, for example, this month we would need to wait for the rates on October 18th to get the daily rate for October 15th. Is that correct?

It looks that way. The Fed has a daily release of H.15, but it does not include the daily yields for Treasury Securities. You can get to the weekly release with the following link: H.15 weekly releases .

We included a notice in the Top Stories section of BOL under the title "HOEPA Loans" regarding the new H.15 rates for October 15 that should be used for loan application received in November.