REQUIREMENTS FOR RATE ADJUSTMENTS

(a) The interest rate or time price differential in a credit transaction may be adjusted at stated regular intervals if the credit document expressly: (1) provides for the adjustment; and (2) states the index described by Subsection (b) that is being used for the adjustment. (b) The index must be: (1) the monthly average gross yield to the Federal National Mortgage Association on accepted bids in weekly or biweekly auctions for four-month commitments to purchase FHA-insured or VA-guaranteed home mortgages, as published in the Federal Reserve Bulletin; (2) the monthly average yield on United States Treasury securities adjusted to a constant maturity of five years as published in the Federal Reserve Bulletin; or (3) an index expressly approved by the Office of Thrift Supervision or by the Office of the Comptroller of the Currency, Department of the Treasury, for adjustable or variable interest rates on residential mortgage loans.