Employee Benefits Update - April 2009
New Rules Amend Truth in Lending Act to Exclude Plan Loans
April 08, 2009
On December 18, 2008, the Federal Reserve Board (the "Board") approved final rules amending Regulation Z, which implements the Truth in Lending Act ("TILA"). The Board amended Regulation Z to exempt plan loans taken from employer-sponsored retirement plans qualified under section 401(a) of the Internal Revenue Code (the "Code"), tax-sheltered annuities under section 403(b) of the Code, or government-sponsored deferred compensation arrangements under section 457(b) of the Code, from the TILA requirements. However, the exemption only applies if the loan proceeds are comprised of fully-vested funds from the participant's account and are made in compliance with the Code. The final rules are effective July 1, 2010.
©2023 Snell & Wilmer L.L.P. All rights reserved. The purpose of this publication is to provide readers with information on current topics of general interest and nothing herein shall be construed to create, offer, or memorialize the existence of an attorney-client relationship. The content should not be considered legal advice or opinion, because it may not apply to the specific facts of a particular matter. As guidance in areas is constantly changing and evolving, you should consider checking for updated guidance, or consult with legal counsel, before making any decisions.