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#1552060 - 05/17/11 02:10 AM What is the rule of thumb for semi-monthly payment
Nick_S Offline
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Joined: Jan 2009
Posts: 19
What is the rule of thumb for semi-monthly payments? Typically, semi-monthly is the 1st and 15th or the 15th and last day of the month. What convention should be used if the dates are NOT one of these two options?

Logically, I'm guessing the odd successive payments are the same day of the subsequent month. For example, one of the payments is always on the 10th, for example, b/c that would create a full calendar month.

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Lending Compliance
#1553105 - 05/18/11 04:09 PM Re: What is the rule of thumb for semi-monthly payment Nick_S
Richard Insley Online
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Richard Insley
Joined: Oct 2000
Posts: 10,082
Toano, VA
As you have discovered, this is one of the most complicated calculation issues in Regulation Z. The regulation does not provide clear and adequate guidance, so you have to be prepared to "make the case" that your APR calculations are legally accurate. According you your website, your company provides software to payday lenders. At the rates of charge imposed by these lenders, absolute accuracy is a survival issue. Any calculation error blows way past the Reg. Z tolerance, and high cost lenders are always under the microscopes of the FTC, states' attorneys general, and other "watchdogs."

Your best bet is to contact Cliff Cook ( http://complyserv.com) and follow his advice. Before retiring, I worked with Cliff on a number of payday lender projects. He is the leading national authority on payday loan calculation matters.
_________________________
...gone fishing.

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#1577617 - 07/13/11 08:38 PM Re: What is the rule of thumb for semi-monthly payment Richard Insley
Nick_S Offline
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Joined: Jan 2009
Posts: 19
Yes Richard, you make an excellent point. I've worked with Cliff. He's very good.

Thanks,

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