We believe that the Rental Housing Support Program surcharge is exempt from the finance charge calculation and should be disclosed in the “Taxes and Other Government Fees” section of the LE and CD.

Regulation Z provides that taxes and fees prescribed by law that actually are or will be paid to public officials for perfecting a security interest may be excluded from the finance charge if itemized and disclosed. This includes charges or other fees required for filing or recording mortgages. As Illinois law requires county recorders to collect the Rental Housing Support Program surcharge for each recorded real estate document, we believe you may exclude the surcharge from the finance charge calculation.

Regulation Z requires that amounts to be paid to state and local governments for taxes and other government fees should be disclosed under Section E of the LE, “Taxes and Other Government Fees.” Further, “the sum of all recording fees and other government fees and taxes” should be disclosed on the first line of this section, labeled as “Recording Fees and Other Taxes.” Fees disclosed here include “fees assessed by a government authority to record and index the loan and title documents as required under State or local law.” Accordingly, we believe the Rental Housing Support Program surcharge should be included here.

As for the CD, Regulation Z requires the total amount of fees for recording security instruments to be disclosed on the first line under Section E, separately from fees for recording deeds. We believe the Rental Housing Support Program surcharge should be disclosed with the “Mortgage” label under “Recording Fees.” Additionally, the total of all recording fees, including the surcharge, should be disclosed in Section E.

To see examples of recording fee disclosures, view the CFPB’s sample LE and CD in the resources below.

For resources related to our guidance, please see:

• CFPB, Sample Loan Estimate

• CFPB, Sample Closing Disclosure

• Regulation Z, 12 CFR 1026.4(e) (“If itemized and disclosed, the following charges may be excluded from the finance charge: (1) Taxes and fees prescribed by law that actually are or will be paid to public officials for determining the existence of or for perfecting, releasing, or satisfying a security interest.”)

• Regulation Z, Official Interpretations, Paragraph 4(e), Comment 1(i) (“Excludable charges. Sums must be actually paid to public officials to be excluded from the finance charge under § 1026.4(e)(1) and (e)(3). Examples are charges or other fees required for filing or recording security agreements, mortgages, continuation statements, termination statements, and similar documents, as well as intangible property or other taxes even when the charges or fees are imposed by the state solely on the creditor and charged to the consumer (if the tax must be paid to record a security agreement).”)

• Illinois Department of Revenue, Rental Housing Support Program Surcharge (“Illinois County Recorders collect a $10 surcharge for each recorded real estate-related document. The surcharge is divided as follows:

• $1 is deposited into the county’s general revenue fund of which 50 cents must be used for the costs of administering the surcharge and

• $9 is remitted to the Illinois Department of Revenue (IDOR).”)

• Counties Code, 55 ILCS 5/3-5018 (“The recorder shall collect a $9 Rental Housing Support Program State surcharge for the recordation of any real estate-related document.”)

• Counties Code, 55 ILCS 5/3-5018 (“For recording any document that affects an interest in real property . . . the recorder shall charge a fee of $1 per document to all filers of documents not filed by any State agency, any unit of local government, or any school district. Fifty cents of the $1 fee hereby established shall be deposited into the County General Revenue Fund.”)

• Regulation Z, Loan Estimate, 12 CFR 1026.37(g) (“Under the master heading ‘Closing Cost Details,’ in a table under the heading ‘Other Costs,’ all costs associated with the transaction that are in addition to the costs disclosed under paragraph (f) of this section. The table shall contain the items and amounts listed under six subheadings, described in paragraphs (g)(1) through (6) of this section.

(1) Taxes and other government fees. Under the subheading ‘Taxes and Other Government Fees,’ the amounts to be paid to State and local governments for taxes and other government fees, and the subtotal of all such amounts, as follows:

• (i) On the first line, the sum of all recording fees and other government fees and taxes, except for transfer taxes paid by the consumer and disclosed pursuant to paragraph (g)(1)(ii) of this section, labeled ‘Recording Fees and Other Taxes.’”)

• Regulation Z, Loan Estimate, Official Interpretations, Paragraph 37(g)(1), Comment 1  (“Recording fees listed under § 1026.37(g)(1) are fees assessed by a government authority to record and index the loan and title documents as required under State or local law. Recording fees are assessed based on the type of document to be recorded or its physical characteristics, such as the number of pages.”)
• Regulation Z, Closing Disclosure, 12 CFR 1026.38(g) (“Under the master heading ‘Closing Cost Details’ disclosed pursuant to paragraph (f) of this section, with columns stating whether the charge was borrower-paid at or before closing, seller-paid at or before closing, or paid by others, all costs in connection with the transaction, other than those disclosed under paragraph (f) of this section, listed in a table with a heading disclosed as ‘Other Costs.’ The table shall contain the items and amounts listed under five subheadings, described in paragraphs (g)(1) through (6) of this section.

(1) Taxes and other government fees. Under the subheading ‘Taxes and Other Government Fees,’ an itemization of each amount that is expected to be paid to State and local governments for taxes and government fees and the total of all such itemized amounts that are designated borrower-paid at or before closing, as follows: (i) On the first line:

• (A) Before the columns described in paragraph (g) of this section, the total amount of fees for recording deeds and, separately, the total amount of fees for recording security instruments; and
• (B) In the applicable column as described in paragraph (g) of this section, the total amounts paid for recording fees (including, but not limited to, the amounts in paragraph (g)(1)(i)(A) of this section).”)

• Regulation Z, Closing Disclosure, Official Interpretations, Paragraph 38(g)(1), Comment 3(i) (“Fees for recording deeds and security instruments. Section 1026.38(g)(1)(i)(A) requires, on the first line under the subheading ‘Taxes and Other Government Fees’ and before the columns described in § 1026.38(g), disclosure of the total fees expected to be paid to State and local governments for recording deeds and, separately, the total fees expected to be paid to State and local governments for recording security instruments. On a line labeled ‘Recording Fees,’ form H-25 of appendix H to this part illustrates such disclosures with the additional labels ‘Deed’ and ‘Mortgage,’ respectively.”)

• Regulation Z, Closing Disclosure, Official Interpretations, Paragraph 38(g)(1), Comment 3(ii) (“Total of all recording fees. Section 1026.38(g)(1)(i)(B) requires, on the first line under the subheading ‘Taxes and Other Government Fees’ and in the applicable column described in § 1026.38(g), disclosure of the total amounts paid for recording fees, including but not limited to the amounts subject to § 1026.38(g)(1)(i)(A). The total amount disclosed under § 1026.38(g)(1)(i)(B) also includes recording fees expected to be paid to State and local governments for recording any other instrument or document to preserve marketable title or to perfect the creditor’s security interest in the property. See comments 37(g)(1)-1, -2, and -3 for discussions of the difference between transfer taxes and recording fees.”)