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#2098441 - 09/14/16 04:37 PM Billy Cycle and MAPR Cure
JC Offline
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Posts: 147
What is your plan for curing the exceeding of the 36% MAPR in a billing cycle. Has anyone talked to their loan operations to understand how they are going to manage the accounts that exceed the 36% MAPR? I just learned that the way we are set up, the statement will go out. We will waive or be reversing the fee but it will not reflect on the statement until the next billing cycle. We will have reporting so that we can identify those accounts that are over 36% but we will only be able to reverse or waive for the next billing cycle. Hopefully that made sense...

Anyone else in the same boat?

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#2098773 - 09/15/16 09:08 PM Re: Billy Cycle and MAPR Cure JC
Jan94 Offline
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Joined: Mar 2001
Posts: 828
Yes, we are in the boat as well. What you describe is also what I understand will be our process. The fee will get waived based on a review of a daily operations report, but it will have already posted to the statement. So for that billing cycle, it is possible the MAPR will be greater than 36% and won't get adjusted until the next billing cycle. The DoD's Interpretive Rule Q&A #3 didn't really seem to provide much guidance other than we could waive it but it also provides "A creditor can comply with section 232.4(b) by designing a combination of periodic rates and fees that cannot possibly result in an MAPR greater than 36 percent." Anyone giving that a shot?

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#2098785 - 09/15/16 09:45 PM Re: Billy Cycle and MAPR Cure JC
Andy_Z Offline
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I haven't studied the open-end enough yet, but what you are describing is usurious and simply says we'll violate the law, but make it up to you next month. As I read that section I saw a trial run and anticipated rate of >36% with a fee reduction calculated immediately so the final statement would not exceed the MAPR required.

This will also lead to a lot of calls wanting explanations and some attorney saying "but you charged it..." I would seriously seek counsel's opinion.

(Unless a cure period exists such as with TRID, this sounds dangerous and requiresmore follow up the next cycle. WHat if the account terminates that statement?)
Last edited by Andy Z; 09/15/16 09:48 PM.
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#2098818 - 09/16/16 01:46 PM Re: Billy Cycle and MAPR Cure JC
Beth175 Offline
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Joined: Feb 2009
Posts: 153
Check with your core vendor - ours is adding some reports to monitor covered loans and lines approaching 36% (flagging at 34% or higher) there will also be an exception report when the 36% is exceeded. I haven't checked with our servicing manager yet but believe the system might not produce a statement if the MAPR exceeds 36%. We don't expect to have any/many covered loans but will have a plan in place to monitor the MAPR.

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