compulsory disclosure of information

Question 1

TILA coverage requirements

Answer 1

credit to consumers, done regularly, finance charge or installments, primarily for family, personal, or household

Question 2

what is regularly

Answer 2

a. To meet the test of “regularly,” a person must have extended consumer credit more than 25 times in either the current or preceding calendar year. 12 C.F.R. § 1026.2(a)(17)(v).
b. The standard is lower for loans that are secured by real estate. These are mortgages. A person also regularly extends consumer credit if the person extended credit more than 5 times in either the current or preceding calendar year if each of those transactions was secured by a dwelling.
c. If the individual did not hit the above threshold in the previous year, consider whether the threshold was met in the current year

Question 3

exemptions from personal, family, HH

Answer 3

b. Personal dwelling qualifies as a personal property so TILA applies (for class, principal dwelling only modifies personal property)
c. Govt guaranteed student loans do not apply to TILA - 1026.3(f)
d. Exemption TILA applies to a private education loan as defined in 1026.46(b)(5)

Question 4

threshold for TILA

Answer 4

58300 unless mortgage

Question 5

what is credit

Answer 5

1. Credit means the right to defer payment of debt or to incur debt and defer its payment.

Question 6

what is consumer

Answer 6

1. Consumer means a cardholder or natural person to whom consumer credit is offered or extended. However, for purposes of rescission under §§ 1026.15 and 1026.23, the term also includes a natural person in whose principal dwelling a security interest is or will be retained or acquired, if that person’s ownership interest in the dwelling is or will be subject to the security interest

Question 7

what is finance charge

Answer 7

1. The finance charge is the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction. Ex. Interest; not application fee, etc

Question 8

closed end disclosure

Answer 8

fixed, in writing, in form consumer may keep, specific info gathered together (federal box)

Question 9

timing of closed end disclosure

Answer 9

a. Generally, creditor must make closed-end disclosures “before consummation of the transaction.” (Reg Z § 1026.17(a)(2)) – can be provided electronically

Question 10

open end disclosure

Answer 10

1. Revolving, credit card, continued series of transactions, fluctuating balance, no fixed payment schedule
   clear conspicuous, in writing, in form consumer may keep

Question 11

how are open end disclosures formatted

Answer 11

b. Certain disclosures must be grouped together
i. Eg, on periodic statement, fees other than interest charges must be grouped together (Reg Z § 1026.7(b)(6)(ii))
ii. Eg, on periodic statement, interest charges must be grouped together (Reg Z § 1026.7(b)(6)(ii))
c. Certain information must be disclosed prominently (bold, certain size font, etc.)
i. Eg, APRs must be in 16-point type in applications/solicitations (Reg Z § 1026.a(b)(1))
ii. Eg, APRs must in must be in bold in account-opening disclosures (Reg Z § 1026.6(b)(1)(i))

Question 12

timing of open end disclosures

Answer 12

a. Throughout existence of open-end loan (i.e., application/solicitation, account-opening, periodic statements)