It also appears that some of the funds may have been used to pay off other institutions.
You will have to determine how the majority of the funds were used. Were the other FIs being paid consumer debt of business debt?
If the majority of the funds are for a business purposes the loan is exempt for Reg. Z. If the majority of the funds are used to satisfy consumer debt then you have a loan subject to Reg. Z.
PS. Since you advance new funds to pay other FIs, and if the purpose falls into the consumer category, you do not have a workout loan under 1026.20.
Paragraph 20(a)(4)
1. Workout agreements. A workout agreement is not a refinancing unless the annual percentage rate is increased or additional credit is advanced beyond amounts already accrued plus insurance premiums.
Last edited by Dan Persfull; 05/03/17 05:45 PM.
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The opinions expressed are mine and they are not to be taken as legal advice.