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#43179 - 11/14/02 09:43 PM Min Late Charge that can be assessed
Miss Kitty Offline
Platinum Poster
Joined: Mar 2002
Posts: 721
California
Will someone point me in the right direction where it states what the minimum late charge you can charge on a loan is or is their a maximum amout that can be assessed (e.g.5% or $10 whichever is greater). Is this a civil code, Professions Code???

Thank you,

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#43180 - 11/14/02 10:09 PM Re: Min Late Charge that can be assessed
KSherrell Offline
100 Club
KSherrell
Joined: Nov 2002
Posts: 139
CA
CA Financial Code discusses late charges on Open-ended Unsecured Loans. (Section 4000)

CA Civil Code discusses late charges on loans secured by real property. (Section 2954)

You might find more on late charges in regards to other types of loans near/in those sections.

Good Luck
-Kevin

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#43181 - 11/15/02 01:13 AM Re: Min Late Charge that can be assessed
Miss Kitty Offline
Platinum Poster
Joined: Mar 2002
Posts: 721
California
Kevin -
Thank you. In reading CA Financial Code, would that apply for all installment loans? (not just unsecured). We've typically charged 5% or $10 whichever is greater. It seems to me that somewhere I read this was acceptable. Any other thoughts on this?

Cheryle

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#43182 - 11/19/02 11:04 PM Re: Min Late Charge that can be assessed
Tina A Sweet Offline
Diamond Poster
Tina A Sweet
Joined: Aug 2001
Posts: 1,033
Marysville, Ca.
Cheryle:

Financial Code Section 4000 (3) "Consumer credit agreement" means any written instrument providing for an extension of unsecured open-end credit for personal, family, or household purposes, that governs the relationship between a supervised financial organization and one or more consumers"

The way I understand this section is installment loans are not covered. Typically installment loans are closed end loans. This section only covers open-end credit as defined by Reg Z.


_________________________
Tina A Sweet-Williams
AVP Special Assets
mailto:tsweet@goldcountrynb.com

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#43183 - 11/19/02 11:13 PM Re: Min Late Charge that can be assessed
KSherrell Offline
100 Club
KSherrell
Joined: Nov 2002
Posts: 139
CA
I agree. I think for closed end loans, you can charge whatever fee you want as long as you disclose it correctly, however there might be limits for closed end loans secured by real property.

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