Does a Closed-end Consumer Line of Credit with interest only monthly payments require a monthly statement that includes detailed loan information? Or would a notice that includes Loan Balance, Interest Due be sufficient?

"Closed-end" and "line" can be construed as a contradiction in terms.

"Closed-end credit" is defined by Section 1026.2(a)(10) to be any consumer credit that is not "open-end credit." Section 1026.2(a)(20) defines "open-end credit" using terms that refer to a "line of credit", "credit line", and "overdraft credit line."

When dealing with Reg. Z, it's safest to reserve the term "line of credit" for revolving credit plans that clearly fall under the rules for open-end credit.

I agree..and generally we don't allow a consumer closed-end line of credit. New Loan Officer plus relatively New Processor = Product we don't generally offer....But the cat is now out of the bag and I'm trying to figure out the best way to deal with it.

I am dealing with this same dilemma at this very moment. I would have thought Appdx D would come into play for APR calculation, but it doesn't appear to.

When I produce a note/Reg Z for a closed end LOC [and yes, our system calls it exactly that] it calculates an APR with an (e), a Finance charge which is in the neighborhood of 1/2 of what the full balance would be plus fee. It does not disclose an estimated monthly interest payment, it just says [blank] number of payments [blank] amount of payments [when due] interest on the amount of credit outstanding will be paid monthly.

And 1 payment of the full principal plus a little more than one month's interest. I can't quickly come up with how this was final payment was calculated . Of course everything in the FED box except the amount financed does contain (e).

Does this sound remotely right?

For On The Edge -

Required reading -

OCC Bulletin 2017-43
Subject: New, Modified, or Expanded Bank Products and Services
Date: October 20, 2017

https://www.occ.treas.gov/news-issuances/bulletins/2017/bulletin-2017-43.html

RR - You are describing Appendix D estimates and disclosures. There's no reason you can't use that method for estimating unknown information for Reg. Z disclosures in non-construction loans when the product features match. You'll want to look at the reg closely, however, to be sure it's OK to mention interest payments without dollar amounts in non-construction estimates.

Well, Appendix D still contains.

Part I (A)

3. Repayment schedule—The number and amounts of any interest payments may be omitted in disclosing the payment schedule under §1026.18(g). The fact that interest payments are required and the timing of such payments shall be disclosed.

This loan will still be subject to 1026.18(g) and not .37 and .38.

While a bank might agree to do a consumer non-revolving line of credit. I am not sure what the real value it would present unless you are talking a very limited set of special circumstances and the amount of the non-revolving line of credit was more than the $57,200 - which gets it totally out of Regulation Z.

Randy, it's a one-off non secured HI loan from what I understand.

One-off products should not be allowed. What happens when the next person comes in and talks to another loan officer and they tell them no? You either have the product or you do not. If you have the product, then it needs to go through the normal process to determine documentation needs, servicing issues, pricing, etc. You don't figure out what you have to do after a loan offer is made.

Sent you a pm.