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50% Consumer, 50% Business - Does Reg Z Apply?

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Question: 
Does Reg Z apply on a consumer loan for $1,000 with less than 50% for business purposes?
Answer: 

Section 226.1(c) of Reg Z states:
In general, this regulation applies to each individual or business that offers or extends credit when four conditions are met:
(i) The credit is offered or extended to consumers;
(ii) The offering or extension of credit is done regularly;
(iii) The credit is subject to a finance charge or is payable by a written agreement in more than 4 installments; and
(iv) The credit is primarily for personal, family, or household purposes.


Also, section 226.2(a)(12) states:
Consumer credit means credit offered or extended to a consumer [b]primarily for personal, family, or household purposes[b]."

Since the loan is not primarily one or the other (personal or business) I would provide TIL disclosures (as well as any other consumer disclosures). You can't exempt it from Reg Z, so it's best to be conservative and provide them.

First published on BankersOnline.com 7/02/07

First published on 07/02/2007

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