Vehicle Title Loan to Business-JWNDAA??

Posted By: HR Banker

Vehicle Title Loan to Business-JWNDAA?? - 01/15/08 07:34 PM

Can we make a loan to a business that fits the definition of a vehicle title loan under JWNDAA and not give a disclosure? Does JWNDAA only apply to consumer loans?
Posted By: Dan Persfull

Re: Vehicle Title Loan to Business-JWNDAA?? - 01/15/08 08:12 PM

See Part 232.1(b)&(c) and the defintions in 232.3.
Posted By: stayin alive

Re: Vehicle Title Loan to Business-JWNDAA?? - 01/16/08 03:01 PM

Yes, only consumer.
Posted By: MadisonCali

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:35 PM

What if it's to a consumer for business purpose?
Posted By: Kathleen O. Blanchard

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:36 PM

Don't confuse consumer with individual. All loans to individuals are not consumer purpose, many are business purpose.
Posted By: Kathleen O. Blanchard

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:38 PM

For this regulation, the definition of consumer credit is:

(b) Consumer credit means closed-end credit offered or extended to a covered borrower primarily for personal, family or household purposes, as described in paragraph (b)(1) of this section.

It is purpose driven.

That being said, it is very very important to properly determine the purpose of a loan, particularly when lending to an individual (sole proprietor).
Posted By: MadisonCali

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:41 PM

Sorry...I meant to type an 'individual', not a 'consumer'. The loan in question is to an individual for a business purpose, and is for $25K. I'm trying to reconcile information I'm reading in the reg with what the examiners told me last summer, and I'm coming up confused smile
Posted By: Kathleen O. Blanchard

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:44 PM

It could be that the examiners did not feel certain loans were clear enough on purpose.
Posted By: MadisonCali

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:53 PM

What they told me was that this particular loan (the one last summer) was exempt from this regulation because it was over the $25K threshold for Reg Z (we only had one title loan on the books at the time).

We just booked another to a person for business equipment, and I'm trying to make sure it's exempt (the lender wasn't supposed to make it for a term less than 181 days just in case, but of course he did it anyways)...
Posted By: Kathleen O. Blanchard

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:55 PM

A loan for business equipment would be exempt as a business purpose loan regardless of dollar amount or term.
Posted By: MadisonCali

Re: Vehicle Title Loan to Business-JWNDAA?? - 07/14/11 07:59 PM

Just found that, as well. I had read some earlier, more confusing threads that contradicted that, but in the reg it is so. I was just headed in the wrong direction from a bad thread.

Thanks so much.