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FDIC Obvious Error Rule-APR Open-End Credit

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Question: 
Have you heard of the obvious error rule? The FDIC has recently completed a compliance exam and mentioned the obvious error rule in relation to the APR calculation on open-end credit.
Answer: 

This rule is part of the "Joint Statement of Policy on the Administrative Enforcement of the Truth in Lending Act Restitution" published in the Federal Register /Vol. 63, No. 173 /Tuesday, September 8, 1998, Page 47498.

Obvious Errors
If an APR was disclosed correctly, but the finance charge required to be disclosed was understated, or if the finance charge was disclosed correctly, but the APR required to be disclosed was understated, no adjustment will be required if the error involved a disclosed value which was 10 percent or less of the amount that should have been disclosed.

First published on BankersOnline.com 1/21/13

First published on 01/21/2013

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