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In Response To:
Thread Starter: mdosu
Title: Re: Prohibition against requiring loan payment via ACH

Bringing this thread back to life.

I'm trying to understand a particular wording in the in the commentary. Commentary mentioned "type" of credit. What does type mean? I can see it as meaning fixed/variable, purpose, or consumer/commercial.

I feel like it's not as descriptive as the Reg Z commentary related to offering a loan that has a prepayment penalty.

(note I'm using the 2018 amended wording):

10(e)(1) Credit

1. Loan payments. Creditors may not require repayment of loans by electronic means on a preauthorized, recurring basis. A creditor may offer a program with a reduced annual percentage rate or other cost-related incentive for an automatic repayment feature, provided the program with the automatic payment feature is not the only loan program offered by the creditor for the type of credit involved.