Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wp-migrate-db domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /srv/app/gotoiba-dev/htdocs/web/wp-includes/functions.php on line 6121
Is it possible that an interest rate and APR on a dealer loan can be the same? Are Electronic Registration and Titling (ERT) and “doc fees” considered prepaid finance charges? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Is it possible that an interest rate and APR on a dealer loan can be the same? Are Electronic Registration and Titling (ERT) and “doc fees” considered prepaid finance charges?

—

by

If either of the fees charged, the ERT fee or the “doc fee,” are considered finance charges, then it is likely that the dealer did not calculate the APR correctly. The ERT program fee is probably not a finance charge, as it is usually charged in comparable cash transactions. 12 CFR 1026.4(a)Comment 1, subsection (i)(A), Official Staff Commentary, 12 CFR 1026.4(a). However, the “doc” fee could be considered a finance charge if it reimburses the creditor for an expense that is incurred only in extending credit; you would have to contact the dealer and ask what the intent behind the fees was. Comment 1, Official Staff Commentary, 12 CFR 1026.4(a). (Note that the regulators had to specifically exempt document preparation fees from the scope of the term “finance charge” for residential real estate transactions. 12 CFR 1026.4(c)(7)(ii).)