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#1611074 - 09/30/11 02:28 PM Assessing Interest
La. Lady Offline
Diamond Poster
La. Lady
Joined: May 2001
Posts: 1,873
When rescission applies, we are assessing interest beginning on the loan closing date. For example, the loan c;psomg is 9/1...rescission applies, and the loan is funded after midnight of the third day...the interest for that loan begins on 9/1....

During an review by outside auditors, this was mentioned as being incorrect.... I don't agree. The funds for this loan has been set aside....placed in a Reg Z account for distribution at the appropriate time.....

Are they correct?
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Riding the waves of change.....2014

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Lending Compliance
#1611077 - 09/30/11 02:31 PM Re: Assessing Interest La. Lady
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Reg Z does not prohibit this practice but if you are in IN you are violating State law.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1611110 - 09/30/11 03:20 PM Re: Assessing Interest Dan Persfull
La. Lady Offline
Diamond Poster
La. Lady
Joined: May 2001
Posts: 1,873
Thanks Dan....

I'm in Louisiana....guess I'd better look at our state law....

Thanks again
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Riding the waves of change.....2014

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#1611115 - 09/30/11 03:26 PM Re: Assessing Interest La. Lady
La. Lady Offline
Diamond Poster
La. Lady
Joined: May 2001
Posts: 1,873
Oh my....we can't do it either....
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#1611334 - 09/30/11 07:05 PM Re: Assessing Interest La. Lady
Arizona Offline
100 Club
Joined: Nov 2009
Posts: 106
I'm new to the compliance arena. Does anyone have or is there a reference guide for state law that you find helpful? I seem to go around in circles trying to find our state law information.

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#1611405 - 09/30/11 08:02 PM Re: Assessing Interest Arizona
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
First try your Department of Financial Institutions Web site (or whatever the department in your state is called that regulate banks) for a link to the statutes. If nothing there try your State banking association.

I have found that most state laws are difficult to search primarily due to the variation of terms used such as late charge is referred to as a delinquent fee and an extension fee is a deferral fee, etc.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1611482 - 09/30/11 09:47 PM Re: Assessing Interest Dan Persfull
WI Banker Offline
Gold Star
Joined: Dec 2006
Posts: 253
The bank still has use of the funds, and the borrower doesn't have access to them. I don't understand why it would be okay to charge them interest.

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