Good afternoon, Reg. Z stipulates specific disclosures required when increasing the rate on an installment loan. What is required, if anything, when lowering the rate? TY!

My understanding is . . . as long as the change benefits the client, redisclosure is not required.

Refer to §226.20(a). If you modify the loan (and don't replace it) no new disclosures are EVER needed - whether benefiting the borrower or not. If you replace the loan with a new loan (a refinance), you must provide all new disclosures.

There are always exceptions in Reg. Z (that's what makes it so much fun!) and the exception here comes from the OSC--Section 226.20(a), Comment #3:
3. Variable rate.
i. ....
ii. Even if it is not accomplished by the cancellation of the old obligation and substitution of a new one, a new transaction subject to new disclosures results if the creditor either:
A. Increases the rate based on a variable-rate feature that was not previously disclosed; or
B. Adds a variable-rate feature to the obligation....

Notice that Subsection ii(B) this rule is triggered by the addition of a VR feature and would apply even if the the resulting VR is lower than the FR it replaces.

He's right. I should know better than to use words like Never and Always when it comes to regulations. There is ALWAYS an exception.

Thank you so much. Just so I understand, if the rate is lowered on an installment loan (secured or unsecured) after the loan has booked, we would be required to notify the consumer disclosing the information in 220.20(c45)? Does this apply as well to loans in which the rate is lowered under the SCRA provisions?