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#2219086 - 08/05/19 01:15 PM Rate change notice for business loans
Karen B. Offline
100 Club
Joined: Oct 2014
Posts: 151
When there are changes to the WSJ prime rate, our core processing system generates a rate change notice on all business loans tied to the index, and we mail out the notices. There is a large number of notices, and we’re wondering if we could turn this off. We would continue to provide a notice in a combined rate change and payment change scenario. Is there any regulatory requirement that would support the need to provide notice of the change? We are providing the information in Business Online for those loan clients who have access. Thank you.

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Lending Compliance
#2219087 - 08/05/19 01:37 PM Re: Rate change notice for business loans Karen B.
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
What does your loan agreement require you to do when there is a rate change?

There would be no Federal requirements for business purpose loans. You will have to refer to any applicable state law.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#2219089 - 08/05/19 01:44 PM Re: Rate change notice for business loans Karen B.
Karen B. Offline
100 Club
Joined: Oct 2014
Posts: 151
I've checked our loan agreement (promissory note), and it says, "Lender will tell Borrower the current Index rate upon Borrower's Request." Thus, I think we're okay as far as Federal requirements go. I'll check into state law. Thank you!

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