Compliance Question of the Week

If initial disclosures are silent on skip payments, does the credit union have to provide a disclosure for skip payments on closed-end loans if a fee is charged?

No, Regulation Z does not require subsequent disclosures for skip payments on closed-end loans. Generally, the only time new Truth in Lending (TIL) disclosures are required for closed-end loans if is refinancing occurs. This is because the existing obligation is replaced by a new obligation for the same consumer. If the existing agreement is only being modified, no new disclosure is required.

Related Links:

12 CFR 1026.20

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance, NWCUA.