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Where in the Reg?

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Question: 
Regarding open lines of credit for an ITI Bank, all the disclosures are given for finance charges, etc. on the loan documents, but according to a new interpretation of Reg Z these fees need to be itemized and disclosed again on the initial billing statement. Where in Reg Z is this stated?
Answer: 

This is not a new interpretation. It has been a requirement for some time now. You can look to the commentary at 226.7(f)- Amount of finance charge:

Comment 8. Start-up fees. Points, loan fees, and similar finance charges relating to the opening of the account that are paid prior to the issuance of the first periodic statement need not be disclosed on the periodic statement. If, however, these charges are financed as part of the plan, including charges that are paid out of the first advance, the charges must be disclosed as part of the finance charge on the first periodic statement. However, they need not be factored into the annual percentage rate. (See footnote 33 in the Reg.)

First published on BankersOnline.com 7/23/07

First published on 07/23/2007

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Filed under compliance as: 

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