The following at 1026.37(l)(3) - The creditor includes prepaid interest that the consumer will pay when calculating the total interest percentage. Prepaid interest that is disclosed as a negative number is included as a negative value when calculating the total interest percentage.

Wasn't the prepaid interest always being included in the TIP calculation? Is just the "negative value" the change?

Thanks in advance.

It was a clarification made by the CFPB that a negative amount is included. Unfortunately they failed to address whether a negative per-diem interest is a negative pre-paid finance charge for APR and finance charge calculations and whether it is included in the TOP. Since all of those have ramifications for a tolerance violations - they didn't do us any favors. How can a negative per-diem interest "be collected"?

1026.17(c)(2)(ii) For a transaction in which a portion of the interest is determined on a per-diem basis and collected at consummation, any disclosure affected by the per-diem interest shall be considered accurate if the disclosure is based on the information known to the creditor at the time that the disclosure documents are prepared for consummation of the transaction.

Thanks very much for the help!