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Installment Loan Fees

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  • #2349
    chichi63
    Member

    VSI and filing fees were collected by the loan officer in cash. Don’t these still have to be included in the TIL calculation and listed on the itemization of amount financed?

    #2732
    dmurray
    Participant

    I’m not sure about VSI because I’m at a bank where we don’t charge customers for that, but definitely include filing fees. 🙂

    #2734
    jholzknecht
    Keymaster

    Section 1026.4(c)(7) of Regulation Z states that filing fees may be excluded from the finance charge in transaction secured by real property or in a residential mortgage transaction, if the fees are bona fide and reasonable in amount.

    Section 1026.4(d)(7) states that VSI premiums may be excluded from the finance charge if:
    i. The insurer waives any right of subrogation.
    ii. The other requirements of § 226.4(d)(2) are met. This includes, of course, giving the consumer the option of obtaining the insurance from a person of the consumer’s choice. The creditor need not ascertain whether the consumer is able to purchase the insurance from someone else.

    #2739
    chichi63
    Member

    Jack,

    I think I’m now confused even more. 99% of our installment loans disclose both the VSI and filing fees on the TIL (generally because they are part of the amount financed). On occasion these fees are paid in cash and have not been included in the TIL calculation, nor in the itemization of amount financed.

    Are they now prepaid finance charges? Sorry for the elementary questions, but I’m fairly new at this.

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