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#1956595 - 08/25/14 03:57 PM Can we charge a returned item fee on this loan?
Anonymous
Unregistered

We are allowed to charge this fee per state law.

However, we are not sure if it is contracted for with our current language. We don't explicitly state that we have a returned item fee- just that any fees disclosed are subject to change without notice (on our TILA). But, the returned item fee isn't stated in our note. Which makes me think we can't charge a fee.

But since we have the "subject to change" language, then could we charge the fee?

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#1956625 - 08/25/14 04:38 PM Re: Can we charge a returned item fee on this loan? Anonymous
BurntSienna Offline
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Joined: Aug 2006
Posts: 2,407
Midwest
The "subject to change" allows you to change/raise a properly disclosed fee (say from $20 to $25 for XYZ). The "subject to change" does not give you the right to charge a new fee for something you didn't disclose. If you haven't disclosed a "returned item fee" then you would have to send out a notice to all existing loan customers that you will begin charging this fee on <date 30 days or more in the future>. Then wait the 30 or more days, then you can begin charging.
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#1956644 - 08/25/14 05:03 PM Re: Can we charge a returned item fee on this loan? Anonymous
Anonymous
Unregistered

So even though it isn't a change in terms per Reg Z, we should be okay if we treat it like one and ensure proper notification before adding the fee?

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#1956648 - 08/25/14 05:11 PM Re: Can we charge a returned item fee on this loan? Anonymous
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,417
Bloomington, IN
So even though it isn't a change in terms per Reg Z, we should be okay if we treat it like one and ensure proper notification before adding the fee?

Not IMO. If you didn't contract for the fee up front then you can't unilaterally add additional charges after confirmation. Especially if you're dealing with closed-end credit.

You need to be talking to the bank's attorney.
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#1956762 - 08/25/14 08:05 PM Re: Can we charge a returned item fee on this loan? Anonymous
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 9,999
Toano, VA
I agree. If it's a loan (closed-end credit), you can do no more than the note states. Any change would require a modification agreement which would have to be executed by the borrower.
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