compulsory disclosure of information Flashcards

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1
Q

TILA coverage requirements

A

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

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2
Q

what is regularly

A

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

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3
Q

exemptions from personal, family, HH

A

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)

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4
Q

threshold for TILA

A

58300 unless mortgage

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5
Q

what is credit

A
  1. Credit means the right to defer payment of debt or to incur debt and defer its payment.
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6
Q

what is consumer

A
  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
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7
Q

what is finance charge

A
  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
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8
Q

closed end disclosure

A

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

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9
Q

timing of closed end disclosure

A

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

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10
Q

open end disclosure

A
  1. Revolving, credit card, continued series of transactions, fluctuating balance, no fixed payment schedule
    clear conspicuous, in writing, in form consumer may keep
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11
Q

how are open end disclosures formatted

A

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))

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12
Q

timing of open end disclosures

A

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

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