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#2224066 - 10/21/19 06:02 PM APR - disclosed as N/A?
TeamComply Offline
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Posts: 393
Reviewing small dollar consumer purpose loan ($500), with a finance charge of $7.15. APR on the note document says "N/A" which is something I have never seen before. I questioned loan staff about this, and they indicated that according to our loan documentation software provider, when the finance charge is minimal, the system will generate an "N/A" for the disclosed APR on the note document. Is this permissible? And if so, where in the regulation does it state this is allowed? Thanks!

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#2224067 - 10/21/19 06:05 PM Re: APR - disclosed as N/A? TeamComply
rainman Online
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rainman
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"And if so, where in the regulation does it state this is allowed?"

That is the question I would ask the provider.
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#2224068 - 10/21/19 06:13 PM Re: APR - disclosed as N/A? TeamComply
Rocky P Offline
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Florida
How many installments for repayment does your note call for?
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#2224073 - 10/21/19 07:26 PM Re: APR - disclosed as N/A? Rocky P
TeamComply Offline
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Posts: 393
9 monthly payments

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#2224084 - 10/21/19 08:37 PM Re: APR - disclosed as N/A? TeamComply
rainman Online
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rainman
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12 CFR 1026.18(e). If the Finance Charge is less than $7.50 on an Amount Financed of more than $75, an APR need not be disclosed.

How about that.
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#2224086 - 10/21/19 08:43 PM Re: APR - disclosed as N/A? TeamComply
Bville Offline
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Bville
Joined: May 2001
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Out West
1026.18(e) Annual percentage rate. The annual percentage rate, using that term, and a brief description such as “the cost of your credit as a yearly rate.” For any transaction involving a finance charge of $5 or less on an amount financed of $75 or less, or a finance charge of $7.50 or less on an amount financed of more than $75, the creditor need not disclose the annual percentage rate.

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#2224087 - 10/21/19 08:49 PM Re: APR - disclosed as N/A? TeamComply
Richard Insley Offline
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Richard Insley
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Toano, VA
Now let's calculate your losses. From that $7.15 FC, you must deduct the cost of:
1. Interviewing and accepting an application
2. Making a credit decision (and possibly a second review)
3. Generating the loan document (s)
4. Booking a new loan
5. Processing 9 payments
6. Processing a payoff
7. Recordkeeping
8. (Possibly) auditing this account
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#2224094 - 10/21/19 09:36 PM Re: APR - disclosed as N/A? TeamComply
rainman Online
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rainman
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9. Figuring out whether it's okay for the disclosure to say "n/a" for APR!
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