Question & Answer
Question: Is there a limit, as an amount or a percentage, that a lender may charge for late fees?
Answer: Federal compliance laws do not limit what a lender may impose as a late fee. Truth in Lending simply requires that you disclose whatever the fee is with your TILA disclosures. The fee may be imposed (and disclosed) as either a specific amount or as a percentage of the payment or loan amount. However, as with loan extension fees, you should check your state law. This is one of the most likely areas for state legislators to find it appropriate or necessary to protect consumers.
Copyright © 1999 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 12, 11/99
First published on 11/01/1999