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#2253707 - 05/10/21 02:54 PM Itemization of Amount Financed for TIL
kmenard Offline
Member
Joined: Oct 2014
Posts: 67
Vehicle purchase from Individual

The loan amount is $30,000. The purchase price of the vehicle is $44,000.00. Our customer is paying $14,000 down. We are paying off another financial institution in the amount of $41,319.07 and the remaining funds will go to the seller in the amount of $2,680.93.

What are we required to show in the itemization of amount financed for TIL? Are we required to show the $14,000 from the borrower and the total amount paid to the seller?

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Lending Compliance
#2253743 - 05/10/21 10:23 PM Re: Itemization of Amount Financed for TIL kmenard
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
Up to you:

2. Additional information. Section 1026.18(c) establishes only a minimum standard for the material to be included in the itemization of the amount financed. Creditors have considerable flexibility in revising or supplementing the information listed in §1026.18(c) and shown in model form H–3, although no changes are required.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2275060 - 09/01/22 05:26 PM Re: Itemization of Amount Financed for TIL kmenard
frumpette Offline
Junior Member
Joined: Sep 2009
Posts: 40
I have an auditor that is pushing back on this topic - wanting to claim it's a UDAAP risk for us to not itemize the "Prepaid Finance Charge". Essentially, we have an Admin Fee that is not listed as:
Prepaid Finance Charge:
- Administration Fee: $12.00
Instead, we just have:
Prepaid Finance Charge: $12.00

The auditor is stating that because our loan agreement does not include an option for the consumer to receive as show in Model H2 that we are required under 1026.18(c) to break out the prepaid charge in to specific line items (in this case, just one item).

I've shared the guidance and 'considerable flexibility' statement isn't flying ... still says there's UDAAP risk. I say "malarkey". Thoughts?

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#2275066 - 09/01/22 06:06 PM Re: Itemization of Amount Financed for TIL kmenard
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
Tell them to go pound sand.

Paragraph 18(c)(1)(iv)
1. Prepaid finance charge. Prepaid finance charges that are deducted under §1026.18(b)(3) must be disclosed under this section. The prepaid finance charges must be shown as a total amount but may, at the creditor's option, also be further itemized and described. All amounts must be reflected in this total, even if portions of the prepaid finance charge are also reflected elsewhere. For example, if at consummation the creditor collects interim interest of $30 and a credit report fee of $10, a total prepaid finance charge of $40 must be shown. At the creditor's option, the credit report fee paid to a third party may also be shown elsewhere as an amount included in §1026.18(c)(1)(iii). The creditor may also further describe the 2 components of the prepaid finance charge, although no itemization of this element is required by §1026.18(c)(1)(iv).
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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