3 Purpose of Reg ZInformed use of consumer credit via required disclosures about terms and costConsumer credit protections
4 Scope of Reg Z Applies when four conditions are met: The credit is offered or extended to consumers.The offering or extension of credit is done regularly.The credit is subject to a finance charge or is payable by a written agreement in more than four installments.The credit is primarily for personal, family, or household purposes.
5 Exemptions Business credit Amounts over $50,000 except when: Secured by real propertySecured by a dwellingA private education loanGuaranteed student loansAn extension of credit to a participant in an employer-sponsored retirement plan
6 Business Credit Look at the “primary purpose” of the credit extension Special rules for rental propertyOrganizational credit is always exempt
8 AdvertisementA commercial message in any medium that promotes, directly or indirectly, a credit transaction.
9 Business DayA day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions.
10 Business Day - Rescission All calendar days except Sundays and legal public holidays (not state holidays):Holidays that fall on a Saturday: count the previous FridayHolidays that fall on a Sunday: don’t count any days (even if you’re closed)
11 Closed-end CreditAny consumer credit other than “open-end credit.”
12 Consumer & Consumer Credit A consumer is a person to whom consumer credit is offered or extended.For purposes of rescission - any natural person whose ownership interest in his or her principal dwelling is subject to the risk of loss.Consumer Credit:Credit offered or extended to a consumer primarily for personal, family, or household purposes.
13 ConsummationThe time that a consumer becomes contractually obligated on a credit transaction.
14 Credit CardAny card, plate, or other single credit device that may be used from time to time to obtain credit.Does not include:A credit card that accesses a home-equity planAn overdraft line of credit accessed by a debit card
15 DwellingA residential structure that contains one to four units, whether or not that structure is attached to real property.
16 Open-end Credit Consumer credit extended under a plan: Repeated transactionsFinance chargeRevolving
17 Prepaid Finance Charge Any finance charge paid separately in cash or by check before or at consummation of a transaction, or withheld from the proceeds of the credit at any time.
18 Residential Mortgage Transaction A loan secured by the consumer's principal dwelling to finance the acquisition or initial construction of that dwelling:Not limited to first lien transactionsConstruction loans can be RMTsMulti-purpose loans can be RMTs
20 Definition The cost of consumer credit as a dollar amount: Includes charges imposed as a condition of the extension of credit.Does not include any charge of a type payable in a comparable cash transaction.
21 Third party chargesThe finance charge includes fees and amounts charged by someone other than the creditor, if the creditor:Requires the use of a third party, ORRetains a portion of the third-party charge.
22 Closing Agent Charges Are finance charges only if the creditor: Requires the particular services for which the consumer is charged.Requires the imposition of the charge.Retains a portion of the third-party charge, to the extent of the portion retained.
24 Finance Charges Interest Service, transaction and activity charges Points and loan feesDiscounts for inducing payment by means other than creditAppraisal, investigation, and credit report fees (exceptions apply)Insurance premiums (exceptions apply)Loan purchase fees if they are passed on to the consumer
25 Exclusions Application fees charged to all applicants Late payment feesOverdraft fees not agreed to in writingParticipation feesSeller's points (or any other seller paid fees)
26 Real Estate related fees Title feesDocument prep feesNotary and credit-report feesAppraisal feesEscrow amounts
27 Property Insurance Premiums Are not finances charges if:The applicant can choose their own insurance company and this fact is disclosed.Coverage obtained through the creditor is disclosed.
28 Insurance and Debt Cancellation and Debt Suspension Coverage Premiums for credit life, accident, health, or loss-of-income insurance may be excluded from the finance charge if:Coverage is not required (and that fact is disclosed)The premium for the initial term of insurance coverage is disclosedThe consumer signs or initials an affirmative written request for the insurance after receiving disclosures
29 Voluntary Debt Cancellation or Debt Suspension Fees Charges or premiums paid for debt cancellation coverage may be excluded from the finance charge if:Coverage is not required and this fact is disclosedThe fee or premium for the initial term of coverage is disclosedFor debt suspension coverage: That the obligation to pay loan principal and interest is only suspendedThe consumer signs or initials an affirmative written request for coverage after receiving the disclosures
30 Security Interest Charges Are not finances charges if they are itemized and disclosed.