I know that "no annual fee" is a trigger under open-end loans. And I know that "no closing costs" is not a trigger for closed end loans. But, is "no loan fee" or "waived loan fee" a trigger under Reg Z for closed end loans? The commentary clarifies "statements that there is no particular charge for credit (such as “no closing costs”) are not triggering terms under this paragraph", but it makes it seem like it's talking about all fees, not just one fee in particular (which is what I'm questioning- one fee, not all)...

Wanted to poll the audience.

Forget the Official Interpretations for a moment and look at the regulation. It lists four, and only four, types of trigger terms:
1. The amount or percentage of any downpayment.
2. The number of payments or period of repayment.
3. The amount of any payment.
4. The amount of any finance charge.

Let's step through them.
1. Your statement has nothing to do with do downpayment (and this trigger only applies to credit sales of OREO.)
2. and 3. Your statement has nothing to do with the payment schedule.
4. Your statement has nothing to do with any FC that will actually apply for the loan offered.

Finding nothing that applies, you must conclude that your statement is not a trigger term.

Thanks Richard. But, I believe our "loan fee" that is waived is the loan origination fee, which is a finance charge, isn't it?

Yes, a loan origination fee is a FC--but only if you actually charge it! A "charge" of $0.00 is not a charge.

Can you point me to where in the regulation the down payment is only a triggering term for OREO?

Thanks!

Search on "credit sale" in the advertising section. That is when it applies, hence OREO in this example.

Thanks Andy!

Section 1026.2(a)(18) defines the term "downpayment" to include no other type of credit transaction other than a credit sale. Therefore, wherever "downpayment" is used in the regulation, it can only relate to credit sales. Bank-financed sales of OREO are the most common cases where banks do credit sales, but once in a while you see a bank selling repossessed vehicles, boats, and other personal property on credit.

Came across this old thread......are you telling me that "the amount or percentage of down payment" is only a trigger term when the bank is selling/financing an OREO property?? Marketing an OREO is not something we do.

No, that's an incomplete statement.

Section 1026.24(d)(1), OI #1 tells you: "By virtue of the definition of downpayment in §1026.2, this triggering term is limited to credit sale transactions." Section 1026.2(a)(16) defines credit sale as "a sale in which the seller is a creditor."

Disposition of OREO is the most common situation where a bank can have the dual role of creditor and seller of the property being purchased/financed. The property being sold does not have to be real estate, however. Instead, it could be personal property--bank-owned furnishings, equipment, "company cars", or repossessed vehicles, for example.

Only when the bank acts in both capacities (seller and lender) does "downpayment" become a triggering term in closed-end credit.