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#2079309 - 05/19/16 02:11 PM Are Refinances Covered under MLA?
Caty Offline
Junior Member
Joined: Oct 2013
Posts: 35
Texas
Could someone please confirm the types of loans that are not covered? Specifically, are refinances covered? I thought I had a handle on this then read a summary that confused me. If they are not covered, can you tell me where to find that information in the reg?

Thank you.

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#2079553 - 05/20/16 12:46 PM Re: Are Refinances Covered under MLA? Caty
Minion Offline
Member
Minion
Joined: Jun 2015
Posts: 64
Virginia
Auto Refinances, Personal Lines of Credit, Personal Loans, Land Loans

Credit offered or extended to a covered borrower primarily for personal, family, or household purposes, and that is (i) subject to a
finance charge or (ii) payable by a written agreement in more than four installments.

https://www.fdic.gov/news/news/financial/2015/fil15037.html

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#2079617 - 05/20/16 03:40 PM Re: Are Refinances Covered under MLA? Caty
ComplyGuy Offline
100 Club
Joined: May 2015
Posts: 247
In my planning, I've been working under the understanding that yes, auto refinances are covered. They do not meet the exception of

"ii) Any credit transaction that is
expressly intended to finance the
purchase of a motor vehicle when the
credit is secured by the vehicle being
purchased;"

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#2086188 - 06/30/16 06:37 PM Re: Are Refinances Covered under MLA? Caty
Comp@2005 Offline
Member
Joined: Feb 2010
Posts: 55
What makes an auto refinance loan different from a purchase loan? Solely the intent to payoff previous loan?

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#2086256 - 06/30/16 08:40 PM Re: Are Refinances Covered under MLA? Caty
bigfish Offline
Member
Joined: Oct 2006
Posts: 66
trolling for the big one
I believe they wanted vehicle title lending covered by the MLA protections.

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#2086627 - 07/05/16 05:46 PM Re: Are Refinances Covered under MLA? Caty
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
I agree that refinancing an original purchase may cause unintended consequences as the law currently reads.
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#2086640 - 07/05/16 06:43 PM Re: Are Refinances Covered under MLA? Caty
raitchjay Offline
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Joined: Oct 2009
Posts: 8,763
OK
Are a lot of car loans done with a balloon or something? Why (generally) would you need to refinance a car loan (unless the borrower wanted some cash out or something, and i think it's pretty clear that they want car title loans to be covered)?
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#2087022 - 07/07/16 05:06 PM Re: Are Refinances Covered under MLA? Caty
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Well, these days with car prices what they are and terms extending out many years...if they WERE to come to a bank for the initial loan...I really could see it being done as a balloon.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#2087029 - 07/07/16 05:14 PM Re: Are Refinances Covered under MLA? Caty
raitchjay Offline
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Joined: Oct 2009
Posts: 8,763
OK
Ok...just wondering. I haven't bought a new car in many years, so i guess i could see that.
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#2088556 - 07/18/16 04:46 PM Re: Are Refinances Covered under MLA? Caty
BrendaW Offline
100 Club
BrendaW
Joined: Jun 2001
Posts: 231
Texas
•§232.6(e)
Refinancing and renewals of covered loans • The refinancing or renewal of consumer credit requires new disclosures under this section only when the transaction for that credit would be considered a new transaction that requires disclosures under Regulation Z.

It appears that refinances and renewals would be covered if new disclosures are done....
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#2088646 - 07/18/16 08:26 PM Re: Are Refinances Covered under MLA? Caty
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
I'm not reading that statement the same way.

I read it like:

1) refinanced of covered loans (original loan was a covered loan) Otherwise, shouldn't it just refer to refinances and renewals in general?

2) ONLY require new disclosures if it's ALSO a new transaction under Reg Z.

meaning...modifications or some type of 'renewal' that does not extinguish the original note, would not necessarily require new disclosures.
Last edited by RR Joker; 07/18/16 08:27 PM. Reason: typo
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#2093811 - 08/17/16 07:11 PM Re: Are Refinances Covered under MLA? Caty
Breeco Offline
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Breeco
Joined: Aug 2014
Posts: 93
Nebraska
I would think that if the refi/renewal contains a stated APR and is a covered loan, then new MLA disclosures would be applicable?
Last edited by MiniMee; 08/17/16 08:12 PM.
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