On a lot of the rules for high cost loans they indicate "total loan amount" when calculating the High Cost limit. At my company when we started creating high cost rules several years ago, we defined "total loan amount" to mean amount financed, as in many states that is what the total loan amount meant. So currently all of our high cost rules are based on amount financed. The term total loan amount means the same term as "total loan amount" means in Regulation Z 226.32 and must be calculated in accordance with the with the FRB's Official Staff Commentary.My question is does this refers to the gross loan amount or amount financed? I hope I am not confusing anyone, because this is certainly confusing to me. Thanks!

Each state may have a slightly different interpretation of the definition of TLA, but generally they seem to start with either the original balance OR the amount financed, then subtract out all Points & Fees (and these may vary widely depending on the state), plus any allowed Bonafide Discount Points, and the resulting figure is the TLA for the state calculation. You really have to look at each state separately to see how they calculate it all out.

I agree w/ EGB.

State interpretations are important as in a few states recently, Yield Spread Premiums (whether paid by the lender or borrower, directly or indirectly) are included in determining High Cost/High Fee loans. In the same manner, I believe some states are now including credit life in the calculations, even if requested by the customer.

Now, getting back to your question about total loan amount, the Commentary to Z has a few examples at Paragraph 32(a)(1)(ii). These should help out.

Thanks so much for your input. This will certainly help in my ongoing research.