How does Reg. Z treat loans with a payment schedule of, for example, the 4th Thursday of the month? Based on my review, it looks like they are treated as a monthly interval with each month assumed to have the same number of days (Appendix J, b(3)(iv)).

Is this payment schedule considered to be in equal intervals, or are we required to identify the number of days between each 4th Thursday and find either the most frequent interval or the average (per Appendix J, b(4)(i)(b))?

Thanks.

1. Quad-weekly U/P with multiple payment timing irregularities.
2. Appendix J, b(4)(i) always applies. Looking at that whole section, you get at least 5 possibilities for the length of the unit period. The correct choice always depends on the actual dates on which payments are contracted.

The only way Appendix J, b(4)(i)(b) can come into play is when there are no common periods. In a "First Monday" loan, the U/P is almost always 4 weeks (5 weeks is possible for loans with a first-payment period of 35 days and fewer than 6 payments.)

Since the U/P is a multiple of weeks, the whole/fractional U/P timing for each payment in the loan is calculated as follows:
1. determine how many days from the date of consummation to the date of the payment in question.
2. divide that number by 28 (for quad-weekly loans) or 35 (in the unlikely case where the U/P is 5 weeks).
3. truncate the fractional part of the resulting number to get the number of whole U/Ps for this payment.
4. any remaining days represent the fraction of a U/P.