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#923378 - 03/14/08 07:36 PM nsf fee charged on returned oan payment
gadawg1 Offline
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Joined: Sep 2006
Posts: 419
Georgia
Does anyone know the implications for charging nsf fees on a loan payment from another institution. We would be adding the fee to the loan balance? I do not think there are Reg Z issues since it is an unanticipated fee. Are there any other issues? Would it need to be disclosed in the Note?

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#923707 - 03/15/08 04:52 PM Re: nsf fee charged on returned oan payment gadawg1
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
You would have to first contract for the fee and I also recommend you check State law for any limitations.
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#925642 - 03/19/08 01:01 PM Re: nsf fee charged on returned oan payment rlcarey
gadawg1 Offline
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Joined: Sep 2006
Posts: 419
Georgia
I would like to ask another question on this issue.

If the loan was an indirect dealer loan, would there be any issues from the Reg Z standpoint as to adding the NSF fee to the loan balance if the customer incurs a NSF fee for a returned loan payment?

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#925684 - 03/19/08 01:36 PM Re: nsf fee charged on returned oan payment gadawg1
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
You could only do that if the original contract and State law allows for it.
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#925956 - 03/19/08 04:30 PM Re: nsf fee charged on returned oan payment rlcarey
Andy_Z Offline
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Just to expand on Randy's answer, Texas is an example that allows this. Contractually a retailer can charge a fee for a returned check. A bank receiving a bad check can too. Loan contracts must allow for this. Currently we could charge up to $30. This allowance and fee have nothing to do with NSF fees under TISA.

Certain loan types allow fees to be added to the loan, and some do not. So you have state laws to contend with and these may break down into finer components like loan types.
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#926076 - 03/19/08 05:42 PM Re: nsf fee charged on returned oan payment Andy_Z
gadawg1 Offline
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Joined: Sep 2006
Posts: 419
Georgia
Thanks Randy and Andy, I appreciate your help.

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