Topic: Finance Charge
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Should we include in the finance charge calculation a $3 fee charged by our title company for “State of Illinois registration”? What about an “erecording” fee passed on by our title company?
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We believe that the title registration fee required by Illinois law should be excluded from the finance charge calculation, as with other title insurance fees. For mortgage transactions, Regulation Z excludes “fees for title examination, abstract of title, title insurance, property survey, and similar purposes” from the “finance charge” definition. 12 CFR 1026.4(c)(7)(i). In our…
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Is a document preparation fee considered part of the finance charge for non-real-estate loans?
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We believe that a document preparation fee would be considered a finance charge, as it would not be charged in a comparable cash transaction and does not fall into any of the categories that are exempted from the definition of a finance charge. 12 CFR 1026.4(a). Of course, document preparation fees charged in a real…
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Is it true that we cannot charge any finance charges on a municipality’s credit card account until 60 day grace period has passed?
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We do not believe that that the section of the Local Government Prompt Payment Act cited by the municipality would apply to a credit card account, for two reasons. First of all, the Local Government Prompt Payment Act applies only to contracts with vendors or contractors for goods or services, usually in the construction context,…
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Should we include vehicle registration fees in the finance charge calculation?
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We agree that a fee paid to the Secretary of State for securing your lien on a vehicle’s certificate of title would not be considered a finance charge. The Illinois Vehicle Code provides that the exclusive method of perfecting a lien in a vehicle, by “delivery to the Secretary of State of the existing certificate…
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Does Illinois have a law setting a maximum prepaid finance charge?
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We do not believe that Illinois has a law setting a ceiling for prepaid finance charges with respect to financial institutions. Section 5e of the Banking Act states that “[n]otwithstanding the provisions of any other law in connection with extensions of credit” banks may charge any fees, “subject only to the provisions of [subsection 4(1)]…