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Overdraft repayment plan

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  • #2659
    Marcella
    Participant

    I’m confused on how to comply with this. “Some overdrafts are rewritten as loan obligations in accordance with an institution’s loan policy and supported by a documented assessment of that consumer’s ability to repay”. We currently use TIL forms from our 3rd party vendor for repayment plans, but the payments are only 4 in total and no interest is charged. Also no underwriting is done or provided for in our Loan Policy. We just received an audit and the underwriting and ability to repay was an item noted. Do we have to use the TIL forms since we do not meet the TIL requirements? What is the best way for us to handled this?

    Thanks

    #3001
    dmurray
    Participant

    I don’t see how your vendor would have you use a TIL form for a repayment plan. Nor can I determine how/why a TIL was used when there isn’t any interest charged. The point of the TIL is to inform the customer how they’re paying for their loan, hence “Truth in Lending”

    Are you stating that you only get your payment schedule from a TIL?

    #3002
    Marcella
    Participant

    Can you explain to me when underwriting and repayment ability would be needed when charging off overdrafts.

    thanks

    #3003
    dmurray
    Participant

    Um, I’m not sure when you’d need that? Unless you were planning on qualifying the customer for an ODP Plan of some sorts rather than charging off an OD.

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