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#1978780 - 11/24/14 09:58 PM Consumer loan without a fed box
Waverle Offline
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Joined: May 2013
Posts: 10
Are all Consumer closed end loans required to have a fed box?

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Lending Compliance
#1978784 - 11/24/14 10:09 PM Re: Consumer loan without a fed box Waverle
rlcarey Offline
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rlcarey
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Galveston, TX
If they are covered under Regulation Z, yes. There are some exclusions, i.e., over $53,500 unless Secured by any real property, or by personal property used or expected to be used as the principal dwelling of the consumer; or A private education loan as defined in ยง1026.46(b)(5).
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#1978810 - 11/24/14 10:55 PM Re: Consumer loan without a fed box Waverle
Richard Insley Offline
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Richard Insley
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Toano, VA
Randy answered the most likely interpretation of your question: "Are Truth in Lending disclosures required for closed end consumer loans?" However, in the unlikely case you are actually asking about the box device, the answer is "no."

Although the box device is virtually an industry standard, Section 1026.17(a) does not require any particular design for presentation of the required disclosures and neither does Appendix H. The "model forms" are just that--models.
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#1978817 - 11/24/14 10:59 PM Re: Consumer loan without a fed box Waverle
rlcarey Offline
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rlcarey
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Galveston, TX
Of course Richard is correct, however certain of the disclosure must be segregated in some manner from all other information:

Segregation of disclosures. i. The disclosures may be grouped together and segregated from other information in a variety of ways. For example, the disclosures may appear on a separate sheet of paper or may be set off from other information on the contract or other documents:

A. By outlining them in a box.

B. By bold print dividing lines.

C. By a different color background.

D. By a different type style.
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#1978848 - 11/25/14 11:46 AM Re: Consumer loan without a fed box Waverle
Richard Insley Offline
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Richard Insley
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Toano, VA
These parameters replaced the "anything goes" rule in place prior to 1981. Everyone was forced to dump all supplies of preprinted disclosure forms and redesign them. Industry costs were substantial and this was the Fed's attempt to deflect industry criticism by offering flexibility. As a practical matter, lending institutions jumped at the safe harbor provided by the model forms in Appendix H. Yes, it was (and is) possible to be creative, but that means you have to sell your approach to compliance examiners.
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#1978905 - 11/25/14 03:07 PM Re: Consumer loan without a fed box Richard Insley
Rocky P Offline
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Posts: 7,658
Florida
Originally Posted By: Richard Insley
These parameters replaced the "anything goes" rule in place prior to 1981. Everyone was forced to dump all supplies of preprinted disclosure forms and redesign them.

Oh how do I remember.
I remember my first banking job where the FDIC told the bank to make the TIL disclosures larger than 8 point type so the customers would read it. The Consumer Lending EVP agreed. He then had the printing department (used before desktop computers and printers) make the disclosure part 11 point type, . . . . . and made the rest of the document 14 point.
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