Hello everyone,

Recently joined, however I have been a long time reader of the posts on the forum. I am really grateful for the knowledge provided on the board. Thank you.

I have a question regarding MLA and auto lending. With auto lending, refinances seems to apply since the funds are not considered new money/vehicle purchase.

So, this leads to a question regarding the types of fees that must be included in the MAPR calc. We know that add-ons such as credit life, MBP, GAP, and Warranty must be included, however I do not see anything cited to say that fees such as tax and title must be factored into the MAPR.

My thought is that these types of fees are not considered finance charges nor are they add-ons, so as a result tax/title should be excluded. Is my thinking correct?

Thank you.

Hi John!

That is how we process our refis. We don't include tag, tittle and tax as part of the MAPR as they are not finance charges nor are they "unrelated" to the purchase.

Hope this helps! Welcome to BOL!

Thank you for confirming my thought on this CULady.

For some reason, a customer of ours insists that tax/title be added into the MAPR. I've asked the customer to refer back to what the DoD has provided in regard to MLA to see if they're able to cite specifically where this is documented.

Thanks!

A finance charge is generally something related to a credit transaction. Tax and Title would apply in a cash sale so they are excluded under Reg Z and therefore under the MLA. The MLA has some exceptions but this isn’t one of them.

As I think about this, why on earth is the customer opining on this? This may be a hi-maintenance loan if approved. A little knowledge can be dangerous. I’d ensure the borrower understands that the bank does know the rules and follows them. I’d be sure to dot the “i’s” and cross the “t’s” on this loan.