Cheryle, I think you've outlined the three basic types of controls for HOEPA coverage, all in two paragraphs. It's just a matter of picking the one your shop is most comfortable with, based on your pricing structure and your institution's risk tolerance.
The light switch for me was lots of testing. We know we aren't a HOEPA-applicable lender under the current rules and our present pricing. The thing that flips us into HOEPA territory post-October 1 is the inclusion of credit life & A&H premiums in the fees test. So I tested for that.
I looked at small-dollar, long & short term loans with single & joint life and accident & health. Then I looked at longer term loans with the full package of coverage. I found different cutoff points, and it became clear that financing the credit insurance premiums may cause us to trigger HOEPA disclosures in some cases.
So we're looking to change the credit insurance product to a non-financed premium alternative. If that happens, our HOEPA risk is low and in my case I wouldn't encourage a worksheet for every loan. It's just extra work for a condition we're very confident does not exist.
If your pricing scheme is less clear, it may make sense to institute a worksheet-for-every-loan procedure.
Opinions are Bartman's, not those of my employer. "A noble spirit embiggens the smallest man."