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#2136537 - 06/29/17 09:18 PM Disclose the Initial Index on a Commercial Note
Bec Offline
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Bec
Joined: Jul 2010
Posts: 1,114
The Great White North
Is there a requirement that the initial index must be disclosed (as a number) on a variable rate commercial note? For instance, are we required to have written on the note that "the account is subject to a variable annual percentage rate equal to the Wall Street Journal Published Prime ("index") in effect on the Change date, plus 0.500 percentage points ("Margin"). The current value of the Index is 4.00%"

So what I am asking is if we can leave out the current value of the index and just state where the index is coming from and what the margin is?
Last edited by Bec; 06/29/17 09:20 PM.
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Lending Compliance
#2136546 - 06/29/17 10:14 PM Re: Disclose the Initial Index on a Commercial Note Bec
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,097
Toano, VA
Assuming "variable rate commercial note" means the loan is exempt from Regulation Z, then no discussion or disclosure of the APR is required. What you include in or exclude from your notes is a matter that should be discussed with the bank's legal counsel.
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#2136601 - 06/30/17 04:33 PM Re: Disclose the Initial Index on a Commercial Note Bec
fmissle Offline
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Joined: Jul 2007
Posts: 1,000
Pac NW
While I agree with Richard I'm curious as to why this is coming up. I'd like to hear if you wouldn't mind sharing.

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