Hi! I am hoping someone can assist with a few questions I have but didn't find answers to when I searched.

1. Does any part of the MLA apply to credit cards BEFORE 2017? For instance, are credit cards required to do the search?

2. If you have a covered product, but it cannot exceed 36%, are you still required to give all the disclosures (assuming the borrower is covered)?

3. If a covered borrower wants to pay his loan with an ACH from his account with you or another FI, is that no longer permitted, due to the restriction of using a check or other "method of access" to make payments provision?

I think that is it. Thanks in advance for your help or thoughts.

Tesla-I am bumping this since I am curious on the answer to #2.
3. I believe as long as it follows the Regulation E requirements that it is permitted-but cannot be required. (It is under the customer's control)

I know that lot loans have been beat to death, but I am still not understanding how they are in the rule and did not see the answer when I did a search. I know it does not qualify for the residential mortgage exception but would it not hit the following exception?? Is personal property only considered non-real estate property and where can I read that?

(2) Exceptions. Notwithstanding paragraph (f)(1) of this section, consumer credit does not mean:

(iii) Any credit transaction that is expressly intended to finance the purchase of personal property when the credit is secured by the property being purchased;

Real estate by definition isn't personal property.

Or put a better way: real property by definition isn't personal property.

Ahhh...Thanks for the direction. I will cite it here in case anyone else needs it. I also looked up the legal definition of personal property to further support that assessment.(If you need it to explain your stance to those who may be doubtful.)

From 225.71 (Reg Y)
h) Real estate or real property means an identified parcel or tract of land, with improvements, and includes easements, rights of way, undivided or future interests, or similar rights in a tract of land, but does not include mineral rights, timber rights, growing crops, water rights, or similar interests severable from the land when the transaction does not involve the associated parcel or tract of land.

(i) Real estate-related financial transaction means any transaction involving:

(1) The sale, lease, purchase, investment in or exchange of real property, including interests in property, or the financing thereof; or

(2) The refinancing of real property or interests in real property; or

(3) The use of real property or interests in property as security for a loan or investment, including mortgage-backed securities.


Definition of personal property (from Webster's dictionary)
- property other than real property consisting of things temporary or movable

For a consumer purpose transaction where the individual pledges commercial property, say for example their office building or equipment as collateral for a loan that is for personal, household, consumer purpose, and proceeds are clearly NOT commercial use, is this a covered loan?

I'd say yes. I see nothing that would exempt it.

Thanks!

Thanks all!

Hi! I am looking for a little confirmation on if a certain loan is considered a covered product. I believe that it is, but I am just trying to make sure I am thinking clearly.

If we have a consumer that wants a personal loan and the proceeds are being used for personal use and they will be securing that loan with stock that they already own is this considered a covered product if the consumer is considered a covered borrower?

Thanks
Tricia

I would say it is covered since they are purchasing personal property and it is not being secured by the same personal property.

Agreed, this won't fit any exception based on the description, personal loan (Reg Z is in), not secured by purchased personal property, vehicle or a residential mortgage.

Are we allowed to provide the new disclosure to all customers or can we only provide to covered borrowers? And if we provide the disclosures to all customer, the MAPR is not over 36% and will be monitored to ensure it never is over 36%, and we follow all the other prohibited credit term rules on all loans, are we required to check the DMDC website since we are providing the rules to all applicable loans?

You are required to check the website or use a CRA no matter what and keep some evidence that you did check. I do not think it would be a good idea to provide the disclosures to everyone, just the ones that it applies too.

1-No
2-Yes
3-Yes

I am looking for a true definition of Recreational Vehicle.

o Definition – Appear to not apply to Recreational Vehicle – What does RV mean?
o Purchase Money – Is exempt.
o FDIC exam procedures – purpose …. Vehicle… on-road …. Does not include golf carts, motor scooter, motorhomes, recreational vehicle… What is an RV? Is it titled versus non-titled?

In California, state law provides the definition of vehicle, rv, and motorhomes. Also, SCRA and MLA do not share the same definitions as to what a vehicle, rv,or motor homes is.