dg
Platinum Poster
Joined: Jan 2005
Posts: 811
Pacific NW
I have a loan that was made to an individual for personal use. The collateral is the crop that is grown and leased by a another farmer that leases it from the indivual that borrowed the money. Would this be a subject to Reg Z because the purpose of the loan proceeds are for personal use or would it be exempt because the collateral is that of a commercial purpose. Does Reg Z always look at the Purpose of the loan proceeds?
#1129759 - 02/13/0905:08 PMRe: Consumer or Commercial RR Joker
dg
Platinum Poster
Joined: Jan 2005
Posts: 811
Pacific NW
Yes, it was caught unfortunetly by an examiner that was reviewing for CRA data. It is however an isolated situation. We do not ususally secure the loan with the crop just a personal guarentee. Now I'm wondering, we have a Reg Z violation because it was disclosed as commercial. Will we need to re-disclose? Will we need to re-imburse?