I found this post on another forum from another source and am copying below to this forum as I had this same question.

"Do you see a problem if we provide the MLA disclosures to a "covered borrower" for a non covered product? We are thinking of providing the MAPR statement disclosure to a covered borrower for consumer purpose loans that are to finance the purchase of a vehicle or personal property and is secured by that collateral (exempt loans). "

I was asking this question in case we gave to all due to the issue of warranties, underwater trade in, etc..

I see what you are saying with wanting to give the MAPR statement to everyone due to the issue now with underwater trade ins, and cash out issues. I think if you add to the form "as applicable" it might be ok. My question to you is what about having to actually now calculate the MAPR now that there is cash out for some reason on the purchase loan? The way the update is written it sounds like we would need to review every purchase order to ensure that the loan is only financing the auto to ensure it is not a MAPR loan.

Our system is set up by products and not purpose so we will have the MAPR testing turned on for auto loans regardless of purchase or refinance, cash out etc.

We have some that are voting for the same procedure: providing the MAPR statement disclosure to every covered borrower regardless of the purpose of the consumer loan.

Is over-disclosure a problem?

Same here. All that will do is take the setoff verbiage out of the lone contract. So we will be denying ourselves that remedy for non-payment for non-covered loans.

I am of the mind that right of offset is NOT prohibited so we will be over disclosing until a clarification about the "cash out" on a purchase is issued.

It is interesting that Laserpro, if a "covered borrower" is indicated, the software automatically takes out the setoff clause. So I guess THEIR attorneys have the opinion that it is prohibited. For the one or two of these loans we might generate per year, it's no big deal.

That is interesting. I'll have to look into it. We're a LaserPro bank. I'm setting up templates on the live side. I'll have to double check the note that generates.

WK has done the same...if I'm not mistaken, it will also be noted in the deposit contracts.

We have a small line of credit (maximum amount $1000) that is processed differently than other consumer loans. Origination is streamlined by providing disclosures and completing the agreement upon credit approval in the branch. For this particular product, would it be acceptable to include the MLA disclosures (MAPR and a generic payment description) for both non-covered and covered borrowers? It's definitely over-disclosing to non-covered borrowers, but we would clearly indicate which borrowers it applied to. I feel the same process/document will better ensure the borrower receives the disclosures. We just need to train staff to verbally read them.

Bump

Mel in WA - We have a product similar to what you are describing. The customer applies and receives disclosure online. Our plan is to provide the disclosure for both non-covered and covered borrowers. Prior to final approval, we will look up the borrower. If the borrower is covered, we will call the customer and read the disclosure.