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6500 - Consumer Protection Appendix B to Part 226State Exemptions Application Any State may apply to the Board for a determination that a class of transactions subject to State law is exempt from the requirements of the Act and this regulation. An application shall be in writing and addressed to the Secretary, Board of Governors of the Federal Reserve System, Washington, DC 20551, and shall be signed by the appropriate State official. The application shall be made pursuant to the procedures herein and the Board's Rules of Procedure (12 CFR Part 262). Supporting Documents An application shall be accompanied by: (1) The text of the State statute or regulation that is the subject of the application, and any other statute, regulation, or judicial or administrative opinion that implements, interprets, or applies it. (2) A comparison of the State law with the corresponding provisions of the Federal law. (3) The text of the State statute or regulation that provides for civil and criminal liability and administrative enforcement of the State law. (4) A statement of the provisions for enforcement, including an identification of the State office that administers the relevant law, information on the funding and the number and qualifications of personnel engaged in enforcement, and a description of the enforcement procedures to be followed, including information on examination procedures, practices, and policies. If an exemption application extends to federally chartered institutions, the applicant must furnish evidence that arrangements have been made with the appropriate Federal agencies to ensure adequate enforcement of State law in regard to such creditors. (5) A statement of reasons to support the applicant's claim that an exemption should be granted. Public Notice of Application Notice of an application will be published, with an opportunity for public comment, in the Federal Register, unless the Board finds that notice and opportunity for comment would be impracticable, unnecessary, or contrary to the public interest and publishes its reasons for such decision. Subject to the Board's Rules Regarding Availability of Information (12 CFR Part 261), all applications made, including any documents and other material submitted in support of the applications, will be made available for public inspection and copying. A copy of the application also will be made available at the Federal Reserve Bank of each district in which the applicant is situated. Favorable Determination If the Board determines on the basis of the information before it that an exemption should be granted, notice of the exemption will be published in the Federal Register, and a copy furnished to the applicant and to each Federal official responsible for administrative enforcement. The appropriate State official shall inform the Board within 30 days of any change in its relevant law or regulations. The official shall file with the Board such periodic reports as the Board may require. The Board will inform the appropriate State official of any subsequent amendments to the Federal law, regulation, interpretations, or enforcement policies that might require an amendment to State law, regulation, interpretations, or enforcement procedures. Adverse Determination If the Board makes an initial determination that an exemption should not be granted, the Board will afford the applicant a reasonable opportunity to demonstrate further that an exemption is proper. If the Board ultimately finds that an exemption should not be granted, notice of an adverse determination will be published in the Federal Register and a copy furnished to the applicant. Revocation of Exemption The Board reserves the right to revoke an exemption if at any time it determines that the standards required for an exemption are not met. Before taking such action, the Board will notify the appropriate State official of its intent, and will afford the official such opportunity as it deems appropriate in the circumstances to demonstrate that revocation is improper. If the Board ultimately finds that revocation is proper, notice of the Board's intention to revoke such exemption will be published in the Federal Register with a reasonable period of time for interested persons to comment. Notice of revocation of an exemption will be published in the Federal Register. A copy of such notice will be furnished to the appropriate State official and to the Federal officials responsible for enforcement. Upon revocation of an exemption, creditors in that State shall then be subject to the requirements of the Federal law. [Codified to 12 C.F.R. Part 226, Appendix B] Appendix C to Part 226Issuance of Staff Interpretations Official Staff Interpretations Officials in the Board's Division of Consumer and Community Affairs are authorized to issue official staff interpretations of this regulation. These interpretations provide the protection afforded under section 130(f) of the Act. Except in unusual circumstances, such interpretations will not be issued separately but will be incorporated in an official commentary to the regulation which will be amended periodically. Requests for Issuance of Official Staff Interpretations A request for an official staff interpretation shall be in writing and addressed to the Director, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, DC 20551. The request shall contain a complete statement of all relevant facts concerning the issue, including copies of all pertinent documents. Scope of Interpretations No staff interpretations will be issued approving creditors' forms, statements, or calculation tools or methods. This restriction does not apply to forms, statements, tools, or methods whose use is required or sanctioned by a government agency. [Codified to 12 C.F.R. Part 226, Appendix C] Appendix D to Part 226Multiple Advance Construction Loans Section 226.17(c)(6) permits creditors to treat multiple advance loans to finance construction of a dwelling that may be permanently financed by the same creditor either as a single transaction or as more than one transaction. If the actual schedule of advances is not known, the following methods may be used to estimate the interest portion of the finance charge and the annual percentage rate and to make disclosures. If the creditor chooses to disclose the construction phase separately, whether interest is payable periodically or at the end of construction, part I may be used. If the creditor chooses to disclose the construction and the permanent financing as one transaction, part II may be used. Part I--Construction Period Disclosed Separately A. If interest is payable only on the amount actually advanced for the time it is outstanding: 1. Estimated interest--Assume that one-half of the commitment amount is outstanding at the contract interest rate for the entire construction period. 2. Estimated annual percentage rate--Assume a single payment loan that matures at the end of the construction period. The finance charge is the sum of the estimated interest and any prepaid finance charge. The amount financed for computation purposes is determined by subtracting any prepaid finance charge from one-half of the commitment amount. 3. Repayment schedule--The number and amounts of any interest payments may be omitted in disclosing the payment schedule under § 226.18(g). The fact that interest payments are required and the timing of such payments shall be disclosed. 4. Amount financed--The amount financed for disclosure purposes is the entire commitment amount less any prepaid finance charge. B. If interest is payable on the entire commitment amount without regard to the dates or amounts of actual disbursement: 1. Estimated interest--Assume that the entire commitment amount is outstanding at the contract interest rate for the entire construction period. 2. Estimated annual percentage rate--Assume a single payment loan that matures at the end of the construction period. The finance charge is the sum of the estimated interest and any prepaid finance charge. The amount financed for computation purposes is determined by subtracting any prepaid finance charge from one-half of the commitment amount. 3. Repayment schedule--Interest payments shall be disclosed in making the repayment schedule disclosure under § 226.18(g). Example: Assume a $50,000 loan commitment at 10.5% interest with a 5-month construction period and a prepaid finance charge of 2 points.
Part II--Construction and permanent financing disclosed as one transaction. A. The creditor shall estimate the interest payable during the construction period to be included in the total finance charge as follows: 1. If interest is payable only on the amount actually advanced for the time it is outstanding, assume that one-half of the commitment amount is outstanding at the contract interest rate for the entire construction period. 2. If interest is payable on the entire commitment amount without regard to the dates or amounts of actual disbursement, assume that the entire commitment amount is outstanding at the contract rate for the entire construction period. B. The creditor shall compute the estimated annual percentage rate as follows: 1. Estimated interest payable during the construction period shall be treated for computation purposes as a prepaid finance charge (although it shall not be treated as a prepaid finance charge for disclosure purposes). 2. The number of payments shall not include any payments of interest only that are made during the construction period. 3. The first payment period shall consist of one-half of the construction period plus the period between the end of the construction period and the first amortization payment. C. The creditor shall disclose the repayment schedule as follows: 1. For loans under paragraph A.1. of Part II, without reflecting the number or amounts of payments of interest only that are made during the construction period. The fact that interest payments must be made and the timing of such payments shall be disclosed. 2. For loans under paragraph A.2. of Part II, including any payments of interest only that are made during the construction period. D. The creditor shall disclose the amount financed as the entire commitment amount less any prepaid finance charge. Example: Assume a $50,000 loan commitment at 10.5% interest with a 5-month construction period and a prepaid finance charge of 2 points, followed by 30-year permanent financing at the same rate with monthly amortization payments of $457.37.
[Codified to 12 C.F.R. Part 226, Appendix D] [Appendix D amended at 46 Fed. Reg. 29246, June 1, 1981] Appendix ERules for Card Issuers That Bill on a Transaction-by-Transaction Basis The following provisions of Subpart B apply if credit cards are issued and the card issuer and the seller are the same or related persons; no finance charge is imposed; consumers are billed in full for each use of the card on a transaction-by-transaction basis, by means of an invoice or other statement reflecting each use of the card; and no cumulative account is maintained which reflects the transactions by each consumer during a period of time, such as a month. The term "related person" refers to, for example, a franchised or licensed seller of a creditor's product or service or a seller who assigns or sells sales accounts to a creditor or arranges for credit under a plan that allows the consumer to use the credit only in transactions with that seller. A seller is not related to the creditor merely because the seller and the creditor have an agreement authorizing the seller to honor the creditor's credit card. 1. Section 226.6(a)(5) or § 226.6(b)(5)(iii). 2. Section 226.6(a)(2) or § 226.6(b)(3)(ii)(B), as applicable. The disclosure required by § 226.6(a)(2) or § 226.6(b)(3)(ii)(B) shall be limited to those charges that are or may be imposed as a result of the deferral of payment by use of the card, such as late payment or delinquency charges. A tabular format is not required. 3. Section 226.6(a)(4) or § 226.6(b)(5)(ii). 4. Section 226.7(a)(2) or § 226.7(b)(2), as applicable; § 226.7(a)(9) or § 226.7(b)(9), as applicable. Creditors may comply by placing the required disclosures on the invoice or statement sent to the consumer for each transaction. 5. Section 226.9(a). Creditors may comply by mailing or delivering the statement required by § 226.6(a)(5) or § 226.6(b)(5)(iii) (see appendix G--3 and G--3(A) to this part) to each consumer receiving a transaction invoice during a one-month period chosen by the card issuer or by sending either the statement prescribed by § 226.6(a)(5) or § 226.6(b)(5)(iii), or an alternative billing error rights statement substantially similar to that in appendix G--4 and G--4(A) to this part, with each invoice sent to a consumer. 6. Section 226.9(c). A tabular format is not required. 7. Section 226.10. 8. Section 226.11(a). This section applies when a card issuer receives a payment or other credit that exceeds by more than $1 the amount due, as shown on the transaction invoice. The requirement to credit amounts to an account may be complied with by other reasonable means, such as by a credit memorandum. Since no periodic statement is provided, a notice of the credit balance shall be sent to the consumer within a reasonable period of time following its occurrence unless a refund of the credit balance is mailed or delivered to the consumer within seven business days of its receipt by the card issuer. 9. Section 226.12 including § 226.12(c) and (d), as applicable. Section 226.12(e) is inapplicable. 10. Section 226.13, as applicable. All references to "periodic statement" shall be read to indicate the invoice or other statement for the relevant transaction. All actions with regard to correcting and adjusting a consumer's account may be taken by issuing a refund or a new invoice, or by other appropriate means consistent with the purposes of the section. 11. Section 226.15, as applicable. [Source: 75 FR 7824, Feb. 22, 2010] Appendix FOptional Annual Percentage Rate Computations for Creditors Offering Open-End Plans Subject to the Requirements of § 226.5b In determining the denominator of the fraction under § 226.14(c)(3), no amount will be used more than once when adding the sum of the balances1 subject to periodic rates to the sum of the amounts subject to specific transaction charges. (Where a portion of the finance charge is determined by application of one or more daily periodic rates, the phrase "sum of the balances" shall also mean the "average of daily balances.") In every case, the full amount of transactions subject to specific transaction charges shall be included in the denominator. Other balances or parts of balances shall be included according to the manner of determining the balance subject to a periodic rate, as illustrated in the following examples of accounts on monthly billing cycles: 1. Previous balance--none. A specific transaction of $100 occurs on the first day of the billing cycle. The average daily balance is $100. A specific transaction charge of 3 percent is applicable to the specific transaction. The periodic rate is 1 1/2 percent applicable to the average daily balance. The numerator is the amount of the finance charge, which is $4.50. The denominator is the amount of the transaction (which is $100), plus the amount by which the balance subject to the periodic rate exceeds the amount of the specific transactions (such excess in this case is 0), totaling $100. The annual percentage rate is the quotient (which is 4 1/2 percent) multiplied by 12 (the number of months in a year), i.e., 54 percent. 2. Previous balance--$100. A specific transaction of $100 occurs at the midpoint of the billing cycle. The average daily balance is $150. A specific transaction charge of 3 percent is applicable to the specific transaction. The periodic rate is 1 1/2 percent applicable to the average daily balance. The numerator is the amount of the finance charge which is $5.25. The denominator is the amount of the transaction (which is $100), plus the amount by which the balance subject to the periodic rate exceeds the amount of the specific transaction (such excess in this case is $50), totaling $150. As explained in example 1, the annual percentage rate is 3 1/2 percent × 12 = 42 percent. 3. If, in example 2, the periodic rate applies only to the previous balance, the numerator is $4.50 and the denominator is $200 (the amount of the transaction, $100, plus the balance subject only to the periodic rate, the $100 previous balance). As explained in example 1, the annual percentage rate is 21/4 percent × 12 = 27 percent. 4. If, in example 2, the periodic rate applies only to an adjusted balance (previous balance less payments and credits) and the consumer made a payment of $50 at the midpoint of the billing cycle, the numerator is $3.75 and the denominator is $150 (the amount of the transaction, $100, plus the balance subject to the periodic rate, the $50 adjusted balance). As explained in example 1, the annual percentage rate is 2 1/2 percent × 12 = 30 percent. 5. Previous balance--$100. A specific transaction (check) of $100 occurs at the midpoint of the billing cycle. The average daily balance is $150. The specific transaction charge is $.25 per check. The periodic rate is 1 1/2 percent applied to the average daily balance. The numerator is the amount of the finance charge, which is $2.50 and includes the $.25 check charge and the $2.25 resulting from the application of the periodic rate. The denominator is the full amount of the specific transaction (which is $100) plus the amount by which the average daily balance exceeds the amount of the specific transaction (which in this case is $50), totaling $150. As explained in example 1, the annual percentage rate would be 1 2/3 percent × 12 = 20 percent. 6. Previous balance--none. A specific transaction of $100 occurs at the midpoint of the billing cycle. The average daily balance is $50. The specific transaction charge is 3 percent of the transaction amount or $3.00. The periodic rate is 1 1/2 percent per month applied to the average daily balance. The numerator is the amount of the finance charge, which is $3.75, including the $3.00 transaction charge and $.75 resulting from application of the periodic rate. The denominator is the full amount of the specific transaction ($100) plus the amount by which the balance subject to the periodic rate exceeds the amount of the transaction ($0). Where the specific transaction amount exceeds the balance subject to the periodic rate, the resulting number is considered to be zero rather than a negative number ($50 -- $100 = --$50). The denominator, in this case, is $100. As explained in example 1, the annual percentage rate is 33/4 percent × 12 = 45 percent. [Source: 73 FR 7824, Feb. 22, 2010] Appendix G to Part 226Open-End Model Forms and Clauses G--1 Balance Computation Methods Model Clauses (Home-equity Plans) (§§ 226.6 and 226.7) G--1(A) Balance Computation Methods Model Clauses (Plans other than Home-equity Plans) (§§ 226.6 and 226.7) G--2 Liability for Unauthorized Use Model Clause (Home-equity Plans) (§ 226.12) G--2(A) Liability for Unauthorized Use Model Clause (Plans Other Than Home-equity Plans) (§ 226.12) G--3 Long-Form Billing-Error Rights Model Form (Home-equity Plans) (§§ 226.6 and 226.9) G--3(A) Long-Form Billing-Error Rights Model Form (Plans Other Than Home-equity Plans) (§§ 226.6 and 226.9) G--4 Alternative Billing-Error Rights Model Form (Home-equity Plans) (§ 226.9) G--4(A) Alternative Billing-Error Rights Model Form (Plans Other Than Home-equity Plans) (§ 226.9) G--5 Rescission Model Form (When Opening an Account) (§ 226.15) G--6 Rescission Model Form (For Each Transaction) (§ 226.15) G--7 Rescission Model Form (When Increasing the Credit Limit) (§ 226.15) G--8 Rescission Model Form (When Adding a Security Interest) (§ 226.15) G--9 Rescission Model Form (When Increasing the Security) (§ 226.15) G--10(A) Applications and Solicitations Model Form (Credit Cards) (§ 226.5a(b)) G--10(B) Applications and Solicitations Sample (Credit Cards) (§ 226.5a(b)) G--10(C) Applications and Solicitations Sample (Credit Cards) (§ 226.5a(b)) G--10(D) Applications and Solicitations Model Form (Charge Cards) (§ 226.5a(b)) G--10(E) Applications and Solicitations Sample (Charge Cards) (§ 226.5a(b)) G--11 Applications and Solicitations Made Available to General Public Model Clauses (§ 226.5a(e)) G--12 Reserved G--13(A) Change in Insurance Provider Model Form (Combined Notice) (§ 226.9(f)) G--13(B) Change in Insurance Provider Model Form (§ 226.9(f)(2)) G--14A Home-equity Sample G--14B Home-equity Sample G--15 Home-equity Model Clauses G--16(A) Debt Suspension Model Clause (§ 226.4(d)(3)) G--16(B) Debt Suspension Sample (§ 226.4(d)(3)) G--17(A) Account-opening Model Form (§ 226.6(b)(2)) G--17(B) Account-opening Sample (§ 226.6(b)(2)) G--17(C) Account-opening Sample (§ 226.6(b)(2)) G--17(D) Account-opening Sample (§ 226.6(b)(2)) G--18(A) Transactions; Interest Charges; Fees Sample (§ 226.7(b)) G--18(B) Late Payment Fee Sample (§ 226.7(b)) G--18(C)(1) Minimum Payment Warning (When Amortization Occurs and the 36-Month Disclosures Are Required) (§ 226.7(b)) G--18(C)(2) Minimum Payment Warning (When Amortization Occurs and the 36-Month Disclosures Are Not Required) (§ 226.7(b)) G--18(C)(3) Minimum Payment Warning (When Negative or No Amortization Occurs) (§ 226.7(b)) G--18(D) Periodic Statement New Balance, Due Date, Late Payment and Minimum Payment Sample (Credit cards) (§ 226.7(b)) G--18(E) [Reserved] G--18(F) Periodic Statement Form G--18(G) Periodic Statement Form G--18(H) Deferred Interest Periodic Statement Clause G--19 Checks Accessing a Credit Card Account Sample (§ 226.9(b)(3)) G--20 Change-in-Terms Sample (Increase in Annual Percentage Rate) (§ 226.9(c)(2)) G--21 Change-in-Terms Sample (Increase in Fees) (§ 226.9(c)(2)) G--22 Penalty Rate Increase Sample (Payment 60 or Fewer Days Late) (§ 226.9(g)(3)) G--23 Penalty Rate Increase Sample (Payment More Than 60 Days Late) (§ 226.9(g)(3)) G--24 Deferred Interest Offer Clauses (§ 226.16(h)) G--25(A) Consent Form for Over-the-Limit Transactions (§ 226.56) G--25(B) Revocation Notice for Periodic Statement Regarding Over-the-Limit Transactions (§ 226.56) G--1--Balance Computation Methods Model Clauses (Home-Equity Plans) (a) Adjusted balance method We figure [a portion of] the finance charge on your account by applying the periodic rate to the "adjusted balance" of your account. We get the "adjusted balance" by taking the balance you owed at the end of the previous billing cycle and subtracting [any unpaid finance charges and] any payments and credits received during the present billing cycle. (b) Previous balance method We figure [a portion of] the finance charge on your account by applying the periodic rate to the amount you owe at the beginning of each billing cycle [minus any unpaid finance charges]. We do not subtract any payments or credits received during the billing cycle. [The amount of payments and credits to your account this billing cycle was § ____________________________________________.] (c) Average daily balance method (excluding current transactions) We figure [a portion of] the finance charge on your account by applying the periodic rate to the "average daily balance" of your account (excluding current transactions). To get the "average daily balance" we take the beginning balance of your account each day and subtract any payments or credits [and any unpaid finance charges]. We do not add in any new [purchases/advances/loans]. This gives us the daily balance. Then, we add all the daily balances for the billing cycle together and divide the total by the number of days in the billing cycle. This gives us the "average daily balance." (d) Average daily balance method (including current transactions) We figure [a portion of] the finance charge on your account by applying the periodic rate to the "average daily balance" of your account (including current transactions). To get the "average daily balance" we take the beginning balance of your account each day, add any new [purchases/advances/loans], and subtract any payments or credits, [and unpaid finance charges]. This gives us the daily balance. Then, we add up all the daily balances for the billing cycle and divide the total by the number of days in the billing cycle. This gives us the "average daily balance." (e) Ending balance method We figure [a portion of] the finance charge on your account by applying the periodic rate to the amount you owe at the end of each billing cycle (including new purchases and deducting payments and credits made during the billing cycle). (f) Daily balance method (including current transactions) We figure [a portion of] the finance charge on your account by applying the periodic rate to the "daily balance" of your account for each day in the billing cycle. To get the "daily balance" we take the beginning balance of your account each day, add any new [purchases/advances/fees], and subtract [any unpaid finance charges and] any payments or credits. This gives us the daily balance. G--1(A)--Balance Computation Methods Model Clauses (Plans Other Than Home-Equity Plans) (a) Adjusted balance method We figure the interest charge on your account by applying the periodic rate to the "adjusted balance" of your account. We get the "adjusted balance" by taking the balance you owed at the end of the previous billing cycle and subtracting [any unpaid interest or other finance charges and] any payments and credits received during the present billing cycle. (b) Previous balance method We figure the interest charge on your account by applying the periodic rate to the amount you owe at the beginning of each billing cycle. We do not subtract any payments or credits received during the billing cycle. (c) Average daily balance method (excluding current transactions) We figure the interest charge on your account by applying the periodic rate to the "average daily balance" of your account. To get the "average daily balance" we take the beginning balance of your account each day and subtract [any unpaid interest or other finance charges and] any payments or credits. We do not add in any new [purchases/advances/fees]. This gives us the daily balance. Then, we add all the daily balances for the billing cycle together and divide the total by the number of days in the billing cycle. This gives us the "average daily balance." (d) Average daily balance method (including current transactions) We figure the interest charge on your account by applying the periodic rate to the "average daily balance" of your account. To get the "average daily balance" we take the beginning balance of your account each day, add any new [purchases/advances/fees], and subtract [any unpaid interest or other finance charges and] any payments or credits. This gives us the daily balance. Then, we add up all the daily balances for the billing cycle and divide the total by the number of days in the billing cycle. This gives us the "average daily balance." (e) Ending balance method We figure the interest charge on your account by applying the periodic rate to the amount you owe at the end of each billing cycle (including new [purchases/advances/fees] and deducting payments and credits made during the billing cycle). (f) Daily balance method (including current transactions) We figure the interest charge on your account by applying the periodic rate to the "daily balance" of your account for each day in the billing cycle. To get the "daily balance" we take the beginning balance of your account each day, add any new [purchases/advances/fees], and subtract [any unpaid interest or other finance charges and] any payments or credits. This gives us the daily balance. G--2--Liability for Unauthorized Use Model Clause (Home-Equity Plans) You may be liable for the unauthorized use of your credit card [or other term that describes the credit card]. You will not be liable for unauthorized use that occurs after you notify [name of card issuer or its designee] at [address], orally or in writing, of the loss, theft, or possible unauthorized use. [You may also contact us on the Web: [Creditor Web or email address]] In any case, your liability will not exceed [insert $50 or any lesser amount under agreement with the cardholder]. G--2(A)--Liability for Unauthorized Use Model Clause (Plans Other Than Home-Equity Plans) If you notice the loss or theft of your credit card or a possible unauthorized use of your card, you should write to us immediately at: [address] [address listed on your bill], or call us at [telephone number]. [You may also contact us on the Web: {Creditor Web or email address]] You will not be liable for any unauthorized use that occurs after you notify us. You may, however, be liable for unauthorized use that occurs before your notice to us. In any case, your liability will not exceed [insert $50 or any lesser amount under agreement with the cardholder]. G--3--Long-Form Billing-Error Rights Model Form (Home-Equity Plans) YOUR BILLING RIGHTS KEEP THIS NOTICE FOR FUTURE USE This notice contains important information about your rights and our responsibilities under the Fair Credit Billing Act. Notify Us in Case of Errors or Questions About Your Bill If you think your bill is wrong, or if you need more information about a transaction on your bill, write us [on a separate sheet] at [address] [the address listed on your bill]. Write to us as soon as possible. We must hear from you no later than 60 days after we sent you the first bill on which the error or problem appeared. [You may also contact us on the Web: [Creditor Web or email address]] You can telephone us, but doing so will not preserve your rights. In your letter, give us the following information: Your name and account number. The dollar amount of the suspected error. Describe the error and explain, if you can, why you believe there is an error. If you need more information, describe the item you are not sure about. If you have authorized us to pay your credit card bill automatically from your savings or checking account, you can stop the payment on any amount you think is wrong. To stop the payment your letter must reach us three business days before the automatic payment is scheduled to occur. Your Rights and Our Responsibilities After We Receive Your Written Notice We must acknowledge your letter within 30 days, unless we have corrected the error by then. Within 90 days, we must either correct the error or explain why we believe the bill was correct. After we receive your letter, we cannot try to collect any amount you question, or report you as delinquent. We can continue to bill you for the amount you question, including finance charges, and we can apply any unpaid amount against your credit limit. You do not have to pay any questioned amount while we are investigating, but you are still obligated to pay the parts of your bill that are not in question. If we find that we made a mistake on your bill, you will not have to pay any finance charges related to any questioned amount. If we didn't make a mistake, you may have to pay finance charges, and you will have to make up any missed payments on the questioned amount. In either case, we will send you a statement of the amount you owe and the date that it is due. If you fail to pay the amount that we think you owe, we may report you as delinquent. However, if our explanation does not satisfy you and you write to us within ten days telling us that you still refuse to pay, we must tell anyone we report you to that you have a question about your bill. And, we must tell you the name of anyone we reported you to. We must tell anyone we report you to that the matter has been settled between us when it finally is. If we don't follow these rules, we can't collect the first $50 of the questioned amount, even if your bill was correct. Special Rule for Credit Card Purchases If you have a problem with the quality of property or services that you purchased with a credit card, and you have tried in good faith to correct the problem with the merchant, you may have the right not to pay the remaining amount due on the property or services. There are two limitations on this right: (a) You must have made the purchase in your home state or, if not within your home state within 100 miles of your current mailing address; and (b) The purchase price must have been more than $50. These limitations do not apply if we own or operate the merchant, or if we mailed you the advertisement for the property or services. G--3(A)--Long-Form Billing-Error Rights Model Form (Plans Other Than Home-Equity Plans) Your Billing Rights: Keep This Document For Future Use This notice tells you about your rights and our responsibilities under the Fair Credit Billing Act. What To Do If You Find A Mistake On Your Statement If you think there is an error on your statement, write to us at: [Creditor Name] [Creditor Address] [You may also contact us on the Web: [Creditor Web or email address]] In your letter, give us the following information: Account information: Your name and account number. Dollar amount: The dollar amount of the suspected error. Description of problem: If you think there is an error on your bill, describe what you believe is wrong and why you believe it is a mistake. You must contact us: Within 60 days after the error appeared on your statement. At least 3 business days before an automated payment is scheduled, if you want to stop payment on the amount you think is wrong. You must notify us of any potential errors in writing . You may call us, but if you do we are not required to investigate any potential errors and you may have to pay the amount in question. What Will Happen After We Receive Your Letter When we receive your letter, we must do two things: 1. Within 30 days of receiving your letter, we must tell you that we received your letter. We will also tell you if we have already corrected the error. 2. Within 90 days of receiving your letter, we must either correct the error or explain to you why we believe the bill is correct. While we investigate whether or not there has been an error: We cannot try to collect the amount in question, or report you as delinquent on that amount. The charge in question may remain on your statement, and we may continue to charge you interest on that amount. While you do not have to pay the amount in question, you are responsible for the remainder of your balance. We can apply any unpaid amount against your credit limit. After we finish our investigation, one of two things will happen: If we made a mistake: You will not have to pay the amount in question or any interest or other fees related to that amount. If we do not believe there was a mistake: You will have to pay the amount in question, along with applicable interest and fees. We will send you a statement of the amount you owe and the date payment is due. We may then report you as delinquent if you do not pay the amount we think you owe. If you receive our explanation but still believe your bill is wrong, you must write to us within 10 days telling us that you still refuse to pay. If you do so, we cannot report you as delinquent without also reporting that you are questioning your bill. We must tell you the name of anyone to whom we reported you as delinquent, and we must let those organizations know when the matter has been settled between us. If we do not follow all of the rules above, you do not have to pay the first $50 of the amount you question even if your bill is correct. Your Rights If You Are Dissatisfied With Your Credit Card Purchases If you are dissatisfied with the goods or services that you have purchased with your credit card, and you have tried in good faith to correct the problem with the merchant, you may have the right not to pay the remaining amount due on the purchase. To use this right, all of the following must be true: 1. The purchase must have been made in your home state or within 100 miles of your current mailing address, and the purchase price must have been more than $50. (Note: Neither of these are necessary if your purchase was based on an advertisement we mailed to you, or if we own the company that sold you the goods or services.) 2. You must have used your credit card for the purchase. Purchases made with cash advances from an ATM or with a check that accesses your credit card account do not qualify. 3. You must not yet have fully paid for the purchase. If all of the criteria above are met and you are still dissatisfied with the purchase, contact us in writing [or electronically] at: [Creditor Name] [Creditor Address] [[Creditor Web or e-mail address]] While we investigate, the same rules apply to the disputed amount as discussed above. After we finish our investigation, we will tell you our decision. At that point, if we think you owe an amount and you do not pay, we may report you as delinquent. G--4--Alternative Billing-Error Rights Model Form (Home-Equity Plans) BILLING RIGHTS SUMMARY In Case of Errors or Questions About Your Bill If you think your bill is wrong, or if you need more information about a transaction on your bill, write us [on a separate sheet] at [address] [the address shown on your bill] as soon as possible. [You may also contact us on the Web: [Creditor Web or e-mail address]] We must hear from you no later than 60 days after we sent you the first bill on which the error or problem appeared. You can telephone us, but doing so will not preserve your rights. In your letter, give us the following information: Your name and account number. The dollar amount of the suspected error. Describe the error and explain, if you can, why you believe there is an error. If you need more information, describe the item you are unsure about. You do not have to pay any amount in question while we are investigating, but you are still obligated to pay the parts of your bill that are not in question. While we investigate your question, we cannot report you as delinquent or take any action to collect the amount you question. Special Rule for Credit Card Purchases If you have a problem with the quality of goods or services that you purchased with a credit card, and you have tried in good faith to correct the problem with the merchant, you may not have to pay the remaining amount due on the goods or services. You have this protection only when the purchase price was more than $50 and the purchase was made in your home state or within 100 miles of your mailing address. (If we own or operate the merchant, or if we mailed you the advertisement for the property or services, all purchases are covered regardless of amount or location of purchase.) G--4(A)--Alternative Billing-Error Rights Model Form (Plans Other Than Home-Equity Plans) What To Do If You Think You Find A Mistake On Your Statement If you think there is an error on your statement, write to us at: [Creditor Name] [Creditor Address] [You may also contact us on the Web: [Creditor Web or e-mail address]] In your letter, give us the following information: Account information: Your name and account number. Dollar amount: The dollar amount of the suspected error. Description of Problem: If you think there is an error on your bill, describe what you believe is wrong and why you believe it is a mistake. You must contact us within 60 days after the error appeared on your statement. You must notify us of any potential errors in writing [or electronically]. You may call us, but if you do we are not required to investigate any potential errors and you may have to pay the amount in question. While we investigate whether or not there has been an error, the following are true: We cannot try to collect the amount in question, or report you as delinquent on that amount. The charge in question may remain on your statement, and we may continue to charge you interest on that amount. But, if we determine that we made a mistake, you will not have to pay the amount in question or any interest or other fees related to that amount. While you do not have to pay the amount in question, you are responsible for the remainder of your balance. We can apply any unpaid amount against your credit limit. Your Rights If You Are Dissatisfied With Your Credit Card Purchases If you are dissatisfied with the goods or services that you have purchased with your credit card, and you have tried in good faith to correct the problem with the merchant, you may have the right not to pay the remaining amount due on the purchase. To use this right, all of the following must be true: 1. The purchase must have been made in your home state or within 100 miles of your current mailing address, and the purchase price must have been more than $50. (Note:Neither of these are necessary if your purchase was based on an advertisement we mailed to you, or if we own the company that sold you the goods or services.) 2. You must have used your credit card for the purchase. Purchases made with cash advances from an ATM or with a check that accesses your credit card account do not qualify. 3. You must not yet have fully paid for the purchase. If all of the criteria above are met and you are still dissatisfied with the purchase, contact us in writing [or electronically] at: [Creditor Name] [Creditor Address] [[Creditor Web address]] While we investigate, the same rules apply to the disputed amount as discussed above. After we finish our investigation, we will tell you our decision. At that point, if we think you owe an amount and you do not pay we may report you as delinquent. G--5--RESCISSION MODEL FORM (WHEN OPENING AN ACCOUNT) NOTICE OF RIGHT TO CANCEL 1. Your Right to Cancel. We have agreed to establish an open-end credit account for you, and you have agreed to give us a [mortgage/lien/security interest] [on/in] your home as security for the account. You have a legal right under federal law to cancel the account, without cost, within three business days after the latest of the following events: (1) the opening date of your account which is _______ ; or (2) the date you received your Truth-in-Lending disclosures; or (3) the date you received this notice of your right to cancel the account. If you cancel the account, the [mortgage/lien/security interest] [on/in] your home is also cancelled. Within 20 days of receiving your notice, we must take the necessary steps to reflect the fact that the [mortgage/lien/security interest] [on/in] your home has been cancelled. We must return to you any money or property you have given to us or to anyone else in connection with the account. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property, if it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address shown below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. 2. How to Cancel. If you decide to cancel the account, you may do so by notifying us, in writing, at (creditor's name and business address). You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice no matter how you notify us because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of (date) (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ____________________________________________ Consumer's Signature Date G--6--RESCISSION MODEL FORM (FOR EACH TRANSACTION) NOTICE OF RIGHT TO CANCEL 1. Your Right to Cancel. We have extended credit to you under your open-end credit account. This extension of credit will increase the amount you owe on your account. We already have a [mortgage/lien/security interest] [on/in] your home as security for your account. You have a legal right under federal law to cancel the extension of credit, without cost, within three business days after the latest of the following events: (1) the date of the additional extension of credit which is _______ ; or (2) the date you received your Truth-in-Lending disclosures; or (3) the date you received this notice of your right to cancel the additional extension of credit. If you cancel the additional extension of credit, your cancellation will only apply to the additional amount and to any increase in the [mortgage/lien/security interest] that resulted because of the additional amount. It will not affect the amount you presently owe, and it will not affect the [mortgage/lien/security interest] we already have [on/in] your home. Within 20 calendar days after we receive your notice of cancellation, we must take the necessary steps to reflect the fact that any increase in the [mortgage/lien/security interest] [on/in] your home has been cancelled. We must also return to you any money or property you have given to us or to anyone else in connection with this extension of credit. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address shown below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. 2. How to Cancel. If you decide to cancel the additional extension of credit, you may do so by notifying us, in writing, at (creditor's name and business address). You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice no matter how you notify us because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of (date) (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ____________________________________________ G--7--RESCISSION MODEL FORM (WHEN INCREASING THE CREDIT LIMIT) NOTICE OF RIGHT TO CANCEL 1. Your Right to Cancel. We have agreed to increase the credit limit on your open-end credit account. We have a [mortgage/lien/security interest] [on/in] your home as security for your account. Increasing the credit limit will increase the amount of the [mortgage/lien/security interest] [on/in] your home. You have a legal right under federal law to cancel the increase in your credit limit, without cost, within three business days after the latest of the following events: (a) the date of the increase in your credit limit which is _______ ; or (2) the date you received your Truth-in-Lending disclosures; or (3) the date you received this notice of your right to cancel the increase in your credit limit. If you cancel, your cancellation will apply only to the increase in your credit limit and to the [mortgage/lien/security interest] that resulted from the increase in your credit limit. It will not affect the amount you presently owe, and it will not affect the [mortgage/lien/security interest] we already have [on/in] your home. Within 20 calendar days after we receive your notice of cancellation, we must take the necessary steps to reflect the fact that any increase in the [mortgage/lien/security interest] [on/in] your home has been cancelled. We must also return to you any money or property you have given to us or to anyone else in connection with this increase. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address shown below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. If you decide to cancel the increase in your credit limit, you may do so by notifying us, in writing, at (creditor's name and business address). You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice no matter how you notify us because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of (date) (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ____________________________________________ Consumer's Signature Date G--8--RESCISSION MODEL FORM (WHEN ADDING A SECURITY INTEREST) NOTICE OF RIGHT TO CANCEL You have agreed to give us a [mortgage/lien/security interest] [on/in] your home as security for your existing open-end credit account. You have a legal right under federal law to cancel the [mortgage/lien/security interest], without cost, within three business days after the latest of the following events: (1) the date of the [mortgage/lien/security interest] which is _______ ; or (2) the date you received your Truth-in-Lending disclosures; or (3) the date you received this notice of your right to cancel the [mortgage/lien/security interest]. If you cancel the [mortgage/lien/security interest], your cancellation will apply only to the [mortgage/lien/security interest]. It will not affect the amount you owe on your account. Within 20 calendar days after we receive your notice of cancellation, we must take the necessary steps to reflect that any [mortgage/lien/security interest] [on/in] your home has been cancelled. We must also return to you any money or property you have given to us or to anyone else in connection with this increase. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may make the offer at your home or at the location of the property. Money must be returned to the address shown below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. If you decide to cancel the [mortgage/lien/security interest], you may do so by notifying us, in writing, at (creditor's name and business address). You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice no matter how you notify us because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of (date) (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ____________________________________________ Consumer's Signature Date G--9--RESCISSION MODEL FORM (WHEN INCREASING THE SECURITY) NOTICE OF RIGHT TO CANCEL You have agreed to increase the amount of the [mortgage/lien/security interest] [on/in] your home that we hold as security for your open-end credit account. You have a legal right under federal law to cancel the increase, without cost, within three business days after the latest of the following events: (1) the date of the increase in the security which is _______ ; or (2) the date you received your Truth-in-Lending disclosures; or (3) the date you received this notice of your right to cancel the increase in the security. If you cancel the increase in the security, your cancellation will apply only to the increase in the amount of the [mortgage/lien/security interest]. It will not affect the amount you presently owe on your account, and it will not affect the [mortgage/lien/security interest] we already have [on/in] your home. Within 20 calendar days after we receive your notice of cancellation, we must take the necessary steps to reflect that any increase in the [mortgage/lien/security interest] [on/in] your home has been cancelled. We must also return to you any money or property you have given to us or to anyone else in connection with this increase. Your may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address shown below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. If you decide to cancel the increase in security, you may do so by notifying us, in writing, at (creditor's name and business address). You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice no matter how you notify us because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of (date) (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ____________________________________________ Consumer's Signature Date _______ G10(A)APPLICATIONS AND SOLICITATIONS MODEL FORM (CREDIT CARDS)
G--11--Applications and Solicitations Made Available to the General Public Model Clauses (a) Disclosure of Required Credit Information The information about the costs of the card described in this [application]/[solicitation] is accurate as of (month/year). This information may have changed after that date. To find out what may have changed, [call us at (telephone number)] [write to us at (address)]. (b) No Disclosure of Credit Information There are costs associated with the use of this card. To obtain information about these costs, call us at (telephone number) or write to us at (address). G--12 [Reserved] G--13(A)--Change in Insurance Provider Model Form (Combined Notice) The credit card account you have with us is insured. This is to notify you that we plan to replace your current coverage with insurance coverage from a different insurer. If we obtain insurance for your account from a different insurer, you may cancel the insurance. [Your premium rate will increase to $____________________________________________ per ____________________________________________ .] [Your coverage will be affected by the following: [ ] The elimination of a type of coverage previously provided to you. [(explanation)] [See ____________________________________________ of the attached policy for details.] [ ] A lowering of the age at which your coverage will terminate or will become more restrictive. [(explanation)] (See ____________________________________________ of the attached policy or certificate for details.] [ ] A decrease in your maximum insurable loan balance, maximum periodic benefit payment, maximum number of payments, or any other decrease in the dollar amount of your coverage or benefits. [(explanation)] [See ____________________________________________ of the attached policy or certificate for details.] [ ] A restriction on the eligibility for benefits for you or others. [(explanation)] [See ____________________________________________ of the attached policy or certificate for details.] [ ] A restriction in the definition of "disability" or other key term of coverage. [(explanation)] [See ____________________________________________ of the attached policy or certificate for details.] [ ] The addition of exclusions or limitations that are broader or other than those under the current coverage. [(explanation)] [See ____________________________________________ of the attached policy or certificate for details.] [ ] An increase in the elimination (waiting) period or a change to nonretroactive coverage. [(explanation)] [See ____________________________________________ of the attached policy or certificate for details.] [The name and mailing address of the new insurer providing the coverage for your account is (name and address).] G--13(B)--Change in Insurance Provider Model Form We have changed the insurer providing the coverage for your account. The new insurer's name and address are (name and address). A copy of the new policy or certificate is attached. You may cancel the insurance for your account. Maximum Rate and Payment Examples: If you had an outstanding balance of $10,000 during the draw period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE OF 18% would be $177.78. This annual percentage rate could be reached during the first month of the draw period. If you had an outstanding balance of $10,000 at the beginning of the repayment period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $316.67. This annual percentage rate could be reached during the first month of the repayment period. Historical Example: The following table shows how the annual percentage rate and the minimum monthly payments for a single $10,000 credit advance would have changed based on changes in the Index over the past 15 years. The index values are from September of each year. While only one payment amount per year is shown, payments would have varied during each year. The table assumes that no additional credit advances were taken, that only the minimum payments were made each month, and that the rate remained constant during each year. It does not necessarily indicate how the index or your payments will change in the future.
G--14B--Home Equity Sample
IMPORTANT TERMS This disclosure contains important information about our Home Equity Line of Credit. You should read it carefully and keep a copy for your records. Availability of Terms:All of the terms described below are subject to change. If these terms change (other than the annual percentage rate) and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees you paid to us or anyone else in connection with your application. Security Interest:We will take a mortgage on your home. You could lose your home if you do not meet the obligations in your agreement with us. Possible Actions:We can terminate your line, require you to pay us the entire outstanding balance in one payment, and charge you certain fees if: You engage in fraud or material misrepresentation in connection with the line. You do not meet the repayment terms. Your action or inaction adversely affects the collateral of our rights in the collateral. We can refuse to make additional extensions of credit or reduce your credit limit if: The value of the dwelling securing the line declines significantly below its appraised value for purposes of the line. We reasonably believe you will not be able to meet the repayment requirements due to a material change in your financial circumstances. You are in default of a material obligation in the agreement. Government action prevents us from imposing the annual percentage rate provided for or impairs our security interest such that the value of the interest is less than 120 percent of the credit line. A regulatory agency has notified us that continued advances would constitute an unsafe and unsound practice. The maximum annual percentage rate is reached. This initial agreement permits us to make certain changes to the terms of the agreement at specified times or upon the occurrence of specified events. Minimum Payment Requirements:You can obtain advances of credit for 10 years (the "draw period"). You can choose one of three payment options for the draw period: Monthly interest-only payments. Under this option, your payments will be due monthly and will equal the finance charges that accrued on the outstanding balance during the preceding month. Quarterly interest-only payments. Under this option, your payments will be due quarterly and will equal the finance charges that accrued on the outstanding balance during the preceding quarter. 2% of the balance. Under this option, your payments will be due monthly and will equal 2% of the outstanding balance on your line plus finance charges that accrued on the outstanding balance during the preceding month. If the payment determined under any option is less than $50, the minimum payment will equal $50 or the outstanding balance on your line, whichever is less. Under both the monthly and quarterly interest-only payment options, the minimum payment will not reduce the principal that is outstanding on your line. After the draw period ends, you will no longer be able to obtain credit advances and must repay the outstanding balance (the "repayment period"). The length of the repayment period will depend on the balance outstanding at the beginning of it. During the repayment period, payments will be due monthly and will equal 3% of the outstanding balance on your line plus finance charges that accrued on the outstanding balance or $50, whichever is greater. Minimum Payment Examples:If you took a single $10,000 advance and the ANNUAL PERCENTAGE RATE was 9.52%. Under the monthly interest-only payment option, it would take 18 years and 1 month to pay off the advance if you made only the minimum payments. During that period, you would make 120 payments of $79.33, followed by 96 payments varying between $379.33 and $50 and one final payment of $10.75. Under the 2% of the balance payment option, it would take 10 years and 8 months to pay off the advance if you made only the minimum payments. During that period, you would make 120 payments varying between $279.33 and $50, followed by 7 payments of $50 and one final payment of $21.53. Fees and Charges:To open and maintain a line of credit, you must pay us the following fees: Applicable fee: $100 (due at application) Points: 1% of credit line (due when account opened) Annual maintenance fee: $50 during the first 3 years, $75 thereafter (due each year) You also must pay certain fees to third parties to open a line. These fees generally total between $500 and $900. If you ask, we will give you an itemization of the fees you will have to pay to third parties. Minimum Draw Requirement:The minimum credit advance that you can receive is $200. Tax Deductibility:You should consult a tax advisor regarding the deductibility of interest and charges for the line. Variable-Rate Feature:The line has a variable-rate feature, and the annual percentage rate (corresponding to the periodic rate) and the minimum monthly payment can change as a result. The annual percentage rate includes only interest and not other costs. The annual percentage rate is based on the value of an index. During the draw period, the index is the monthly average prime rate charged by banks. During the repayment period, the index is the weekly average yield on U.S. Treasury securities adjusted to a constant maturity of one year. Information on these indices is published in the Federal Reserve Bulletin. To determine the annual percentage rate that will apply to your line, we add a margin to the value of the index. The initial annual percentage rate is "discounted"--it is not based on the index and margin used for other rate adjustments. The initial rate will be in effect for the first year your credit line is open. Ask us for the current index values, margin, discount and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you. Rate Changes:The annual percentage rate can change monthly. The maximum ANNUAL PERCENTAGE RATE that can apply is 18%. Apart from this rate "cap," there is no limit on the amount by which the rate can change during any one-year period. Maximum Rate and Payment Examples:If the ANNUAL PERCENTAGE RATE during the draw period equaled the 18% maximum and you had an outstanding balance of $10,000: Under the monthly interest-only payment option, the minimum monthly payment would be $150. Under the 2% of the balance payment option, the minimum monthly payment would be $350. This annual percentage rate could be reached during the first month of the draw period. If you had an outstanding balance of $10,000 during the repayment period, the minimum monthly payment at the maximum ANNUAL PERCENTAGE RATE of 18% would be $450. This annual percentage rate could be reached during the first month of the repayment period. Historical Example:The following table shows how the annual percentage rate and the monthly payments for a single $10,000 credit advance would have changed based on changes in the indices over the past 15 years. For the draw period, the index values for the prime rate are from September of each year. For the repayment period, the index values for the yield on U.S. Treasury securities are from the first week ending in July. While only one payment amount per year is shown, payments under the 2% of the balance payment option and during the repayment period would have varied during each year. The table assumes that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during each year. It does not necessarily indicate how the indices of your payments will change in the future.
G--15--Home Equity Model Clauses (a) Retention of Information:This disclosure contains important information about our Home Equity Line of Credit. You should read it carefully and keep a copy for your records. (b) Availability of Terms:To obtain the terms described below, you must submit your application before [date]. However, the [description of terms] are subject to change. or All of the terms described below are subject to change. If these terms change [other than the annual percentage rate] and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees you paid to us or anyone else in connection with your application. (c) Security Interest:We will take a [security interest in/mortgage on] your home. You could lose your home if you do not meet the obligations in your agreement with us. (d) Possible Actions:Under certain circumstances, we can (1) terminate your line, require you to pay us the entire outstanding balance in one payment[, and charge you certain fees]; (2) refuse to make additional extensions of credit; (3) reduce your credit limit[; and (4) make specific changes that are set forth in your agreement with us]. If you ask, we will give you more specific information about when we can take these actions. or Possible Actions:We can terminate your account, require you to pay us the entire outstanding balance in one payment[, and charge you certain fees] if: You engage in fraud or material misrepresentation in connection with the line. You do not meet the repayment terms. Your action or inaction adversely affects the collateral or our rights in the collateral. We can refuse to make additional extensions of credit or reduce your credit line if: The value of the dwelling securing the line declines significantly below its appraised value for purposes of the line. We reasonably believe you will not be able to meet the repayment requirements due to a material change in your financial circumstances. You are in default of a material obligation in the agreement. Government action prevents us from imposing the annual percentage rate provided for or impairs our security interest such that the value of the interest is less than 120 percent of the credit line. A regulatory agency has notified us that continued advances would constitute an unsafe and unsound practice. The maximum annual percentage rate is reached. [The initial agreement permits us to make certain changes to the terms of the agreement at specified times or upon the occurrence of specified events.] (e) Minimum Payment Requirements: The length of the [draw period/repayment period] is [length]. Payments will be due [frequency]. Your minimum payment will equal [how payment determined]. [The minimum payment will not reduce the principal that is outstanding on your line. The minimum payment will not fully repay the principal that is outstanding on your line.] You will then be required to pay the "balloon" payment. (f) Minimum Payment Example:if you made only the minimum payments and took no other credit advances, it would take [length of time] to pay off a credit advance of $10,000 at an ANNUAL PERCENTAGE RATE of [recent rate]. During that period, you would make [number] [frequency] payments of $ _______. (g) Fees and Charges:To open and maintain a line of credit, you must pay the following fees to us: [Description of fee]: [$ _______/ _______ % of _______ ] [When payable] [Description of fee]: [$ _______/ _______ % of _______ ] [When payable] You also must pay certain fees to third parties. These fees generally total [$ _______/ _______ % of _______ /between $ _______ and $ _______]. If you ask, we will give you an itemization of the fees you will have to pay to third parties. (h) Minimum Draw and Balance Requirements:The minimum credit advance you can receive is $ _______. You must maintain an outstanding balance of at least $ _______. (i) Negative Amortization:Under some circumstances, your payments will not cover the finance charges that accrue and "negative amortization" will occur. Negative amortization will increase the amount that you owe on and reduce your equity in your home. (j) Tax Deductibility:You should consult a tax advisor regarding the deductibility of interest and charges to the line. (k) Other Products:If you ask, we will provide you with information on our other available home equity lines. (l) Variable-Rate Feature:The plan has a variable-rate feature and the amount percentage rate (corresponding to the periodic rate) and the [minimum payment term of the line] can change as a result. The annual percentage rate includes only interest and not other costs. The annual percentage rate is based on the value of an index. The index is the (clarification of index) and is [published in/available from] source of information. To determine the annual percentage rate that will apply to your line, we add a margin to the value of the index. [The initial annual percentage rate is "discounted" it is not based on the index and margin used for other rate adjustments. The initial rate will be in effect for (period).] Ask us for the current index value margin. [discount] and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you. (m) Rate Changes:The annual percentage rate can change (frequency). [The rate cannot increase by more than _______ percentage points in any one year period. There is no limit on the amount by which the rate can change in any one year period.] [The maximum ANNUAL PERCENTAGE RATE that can apply is _______ %/The ANNUAL PERCENTAGE RATE cannot increase by more than _______ percentage points above the initial rate.] [Ask us for the specific rate limitations that will apply to your credit line.] (n) Maximum Rate and Payment Examples:If you had an outstanding balance of $10,000, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of _______ % would be $ _______. This annual percentage rate could be reached (when maximum rate could be reached). (o) Historical Example:The following table shows how the annual percentage rate and the maximum payments for a single $10,000 credit advance have changed based on changes in the index over the past 15 years. The index values are from [when values are measured]. [While only one payment amount per year is shown, payments would have varied during each year.] The table assumes that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during each year. It does not necessarily indicate how the index or your payments will change in the future.
G--16(A) Debt Suspension Model Clause Please enroll me in the optional [insert name of program], and bill my account the fee of [how cost is determined]. I understand that enrollment is not required to obtain credit. I also understand that depending on the event, the protection may only temporarily suspend my duty to make minimum payments, not reduce the balance I owe. I understand that my balance will actually grow during the suspension period as interest continues to accumulate. [To Enroll, Sign Here]/[To Enroll, Initial Here]. X _______ G--16(B) Debt Suspension Sample Please enroll me in the optional [name of program], and bill my account the fee of $.83 per $100 of my month-end account balance. I understand that enrollment is not required to obtain credit. I also understand that depending on the event, the protection may only temporarily suspend my duty to make minimum payments, not reduce the balance I owe. I understand that my balance will actually grow during the suspension period as interest continues to accumulate. To Enroll, Initial Here. X _______ G--17(A) Account-opening Model Form (§ 226.6(b)(2)) _______
G--18(B) Late Payment Fee Sample Late Payment Warning:If we do not receive your minimum payment by the date listed above, you may have to pay a $35 late fee and your APRs may be increased up to the Penalty APR of 28.99%. G--18(C) Actual Repayment Period Sample Disclosure on Periodic Statement (a) When Zero or Negative Amortization Does Not Occur Minimum Payment Warning:If you make only the minimum payment on time each month and no other amounts are added to the balance, we estimate that it will take you approximately 13 months to pay off the balance shown on this statement. (b) When Zero or Negative Amortization Occurs Minimum Payment Warning:You will never pay off the outstanding balance shown on this statement if you only pay the minimum payment.
G18(F) Periodic Statement Form (contd.)
G18(G) Periodic Statement Form (contd.)
G--18(H)--Deferred Interest Periodic Statement Clause [You must pay your promotional balance in full by [date] to avoid paying accrued interest charges.]
G--24--Deferred Interest Offer Clauses (a) For Credit Card Accounts Under an Open-End (Not Home-Secured) Consumer Credit Plan [Interest will be charged to your account from the purchase date if the purchase balance is not paid in full within the/by [deferred interest period/date] or if you make a late payment.] (b) For Other Open-End Plans [Interest will be charged to your account from the purchase date if the purchase balance is not paid in full within the/by [deferred interest period/date] or if your account is otherwise in default.] G--25(A)--Consent Form for Over-the-Credit Limit Transactions Your choice regarding over-the-credit limit coverage Unless you tell us otherwise, we will decline any transaction that causes you to go over your credit limit. If you want us to authorize these transactions, you can request over-the-credit limit coverage. If you have over-the-credit limit coverage and you go over your credit limit, we will charge you a fee of $XX and may increase your APRs to the Penalty APR of XX.XX%. You will only pay one fee per billing cycle, even if you go over your limit multiple times in the same cycle. Even if you request over-the-credit limit coverage, in some cases we may still decline a transaction that would cause you to go over your limit, such as if you are past due or significantly over your credit limit. If you want over-the-limit coverage and to allow us to authorize transactions that go over your credit limit, please: --Call us at [telephone number]; --Visit [Web site]; or --Check or initial the box below, and return the form to us at [address]. _______ I want over-the-limit coverage. I understand that if I go over my credit limit, I will be charged a fee of $_______ and my APRs may be increased. [I have the right to cancel this coverage at any time.] [_______ I do not want over-the-limit coverage. I understand that transactions that exceed my credit limit will not be authorized.] Printed Name: _______ Date: _______ [Account Number]: _______ G--25(B)--Revocation Notice for Periodic Statement Regarding Over-the-Credit Limit Transactions You currently have over-the-credit limit coverage on your account, which means that we pay transactions that cause you go to over your credit limit. If you do go over your credit limit, we will charge you a fee of $XX and your APRs may be increased. To remove over-the-credit-limit coverage from your account, call us at 1-800-xxxxxxx or visit [insert Web site]. [You may also write us at: [insert address].] ____________________________________________ I want to cancel over-the-limit coverage for my account. Printed Name: _______ Date: _______ [Account Number]: _______ [Reg. Z, 46 FR 20892, Apr. 7, 1981, as amended at 46 FR 60191, Dec. 9, 1981; 54 FR 13868, Apr. 6, 1989; 54 FR 24689, June 9, 1989; 55 FR 38312, Sept. 18, 1990; 65 FR 58908, Oct. 3, 2000; 75 FR 7825, Feb. 22, 2010] Appendix H to Part 226Closed-End Model Forms and Clauses H--1 Credit Sale Model Form (§ 226.18) H--2 Loan Model Form (§ 226.18) H--3 Amount Financed Itemization Model Form (§ 226.18(c)) H--4(A) Variable-Rate Model Clauses (§ 226.18(f)(1)) H--4(B) Variable-Rate Model Clauses (§ 226.18(f)(2)) H--4(C) Variable-Rate Model Clauses (§ 226.19(b)) H--4(D) Variable-Rate Model Clauses (§ 226.20(c)) H--4(E)--Fixed-Rate Mortgage Interest Rate and Payment Summary Model Clause (§ 226.18(s))H--4(F)--Adjustable-Rate Mortgage or Step-Rate Mortgage Interest Rate and Payment Summary Model Clause (§ 226.18(s)) H--4(G)--Mortgage with Negative Amortization Interest Rate and Payment Summary Model Clause (§ 226.18(s)) H--4(H)--Fixed-Rate Mortgage with Interest-Only Interest Rate and Payment Summary Model Clause (§ 226.18(s)) H--4(I)--Adjustable-Rate Mortgage Introductory Rate Disclosure Model Clause (§ 226.18(s)(2)(iii)) H--4(J)--Balloon Payment Disclosure Model Clause (§ 226.18(s)(5)) H--4(K)--No Guarantee to Refinance Statement Model Clause (§ 226.18(t)) H--5 Demand Feature Model Clauses (§ 226.18(i)) H--6 Assumption Policy Model Clause (§ 226.18(q)) H--7 Required Deposit Model Clause (§ 226.18(r)) H--8 Rescission Model Form (General) (§ 226.23) H--9 Rescission Model Form (Refinancing (with Original Creditor)) (§ 226.23) H--10 Credit Sale Sample H--11 Installment Loan Sample H--12 Refinancing Sample H--13 Mortgage with Demand Feature Sample H--14 Variable-Rate Mortgage Sample (§ 226.19(b)) H--15 Graduated-Payment Mortgage Sample H--16 Mortgage Sample H--17(A) Debt Suspension Model Clause H--17(B) Debt Suspension Sample H1Credit Safe Model Form
H2Loan Model Form
H3Amount Financed Itemization Model Form Itemization of the Amount Financed of $ _______ $ _______ Amount given to you directly $ _______ Amount paid on your account Amount paid to others on your behalf $ _______ to [public officials] [credit bureau] [appraiser] [insurance company] $ _______ to [name of another creditor] $ _______ to (other) $ _______ Prepaid finance charge H4(A)VARIABLE RATE MODEL CLAUSES The annual percentage rate may increase during the term of this transaction if: [the prime interest rate of (creditor) increases.] [the balance in your deposit account falls below $ _______ .] [you terminate your employment with (employer) .] [The interest rate will not increase above _______ %.] [The maximum interest rate increase at one time will be _______ %.] [The rate will not increase more than once every (time period) .] Any increase will take the form of: [higher payment amounts.] [more payments of the same amount.] [a larger amount due at maturity.] Example based on the specific transaction [If the interest rate increases by _______ % in (time period), [your regular payments will increase to $ _______ .] [you will have to make _______ additional payments.] [your final payment will increase to $ _______ .]] Example based on a typical transaction [If your loan were for $ _______ at _______ % for (term) and the rate increased to _______ % in (time period), [your regular payments would increase by $ _______ .] [you would have to make _______ additional payments.] [your final payment would increase by $ _______ .]] H4(B) VARIABLE-RATE MODEL CLAUSES Your loan contains a variable-rate feature. Disclosures about the variable-rate feature have been provided to you earlier. H--4(C)--Variable-Rate Model Clauses This disclosure describes the features of the adjustable-rate mortgage (ARM) program you are considering. Information on other ARM programs is available upon request. How Your Interest Rate and Payment Are Determined Your interest rate will be based on [an index plus a margin] [a formula]. Your payment will be based on the interest rate, loan balance, and loan term. --[The interest rate will be based on (identification of index) plus our margin. Ask for our current interest rate and margin.] --[The interest rate will be based on (identification of formula). Ask us for our current interest rate.] --Information about the index [formula for rate adjustments] is published [can be found] _______ . --[The initial interest rate is not based on the (index) (formula) used to make later adjustments. Ask us for the amount of current interest rate discounts.] How Your Interest Rate Can Change Your interest rate can change (frequency). [Your interest rate cannot increase or decrease more than _______ percentage points at each adjustment.] Your interest rate cannot increase [or decrease] more than _______ percentage points over the term of the loan. How Your Payment Can Change Your payment can change (frequency) based on changes in the interest rate. [Your payment cannot increase more than (amount or percentage) at each adjustment.] You will be notified in writing _______ days before the due date of a payment at a new level. This notice will contain information about your interest rates, payment amount, and loan balance. [You will be notified once each year during which interest rate adjustments, but no payment adjustments, have been made to your loan. This notice will contain information about your interest rates, payment amount, and loan balance.] [For example, on a $10,000 [term] loan with an initial
interest rate of _______ [(the rate shown in the interest rate
column below for the year 19_______)] [(in effect (month)
(year)], the maximum amount that the interest rate can rise under this
program is _______ percentage points, to _______ %, and the
monthly payment can rise from a first-year payment of $ _______ to
a maximum of $ _______ in the _______ year. To see what your
payments would be, divide your mortgage amount by $10,000; then
multiply the monthly payment by that amount. (For example, the monthly
payment for a mortgage amount of $60,000 would be: $60,000 [Example The example below shows how your payments would have changed under this ARM program based on actual changes in the index from 1982 to 1996. This does not necessarily indicate how your index will change in the future. The example is based on the following assumptions:
*This is a margin we have used recently, your margin may be different. **This is the amount of a discount we have provided recently; your loan may be discounted by a different amount.]
Note: To see what your payments would have been during that
period, divide your mortgage amount by $10,000; then multiply the
monthly payment by that amount. (For example, in 1996 the monthly
payment for a mortgage amount of $60,000 taken out in 1982 would be:
$60,000 H-4(D) VARIABLE-RATE MODEL CLAUSES Your new interest rate will be _______ %, which is based on an index value of _______ %. Your previous interest rate was _______ %, which was based on an index value of _______ %. [The new interest rate does not reflect a change of _______ percentage points in the index value which was not added because of _______ .] [The new payment will be $ _______ .] [Your new loan balance is $ _______ .] [Your (new) (existing) payment will not be sufficient to cover the interest due and the difference will be added to the loan amount. The payment amount needed to pay your loan in full by the end of the term at the new interest rate is $ _______ .] [The following interest rate adjustments have been implemented this year without changing your payment: _______ . These interest rates were based on the following index values: _______ .] H4(E)FIXED-RATE MORTGAGE INTEREST RATE AND PAYMENT SUMMARY MODEL CLAUSE
H4(F)ADJUSTABLE-RATE MORTGAGE OR STEP-RATE MORTGAGE INTEREST RATE AND PAYMENT SUMMARY MODEL CLAUSE
H-4(G)MORTGAGE WITH NEGATIVE AMORTIZATION INTEREST RATE AND PAYMENT SUMMARY MODEL CLAUSE
H-4(H)FIXED-RATE MORTGAGE WITH INTEREST-ONLY INTEREST RATE AND PAYMENT SUMMARY MODEL CLAUSE
H4(I)ADJUSTABLE-RATE MORTGAGE INTRODUCTORY RATE DISCLOSURE MODEL CLAUSE [Introductory Rate Notice You have a discounted introductory rate of _______ % that ends after (period). In the (period in sequence), even if market rates do not change, this rate will increase to _______ %.] H4(J)BALLOON PAYMENT DISCLOSURE MODEL CLAUSE [Final Balloon Payment due (date): $ _______] H4(K)NO GUARANTEE TO REFINANCE STATEMENT MODEL CLAUSE There is no guarantee that you will be able to refinance to lower your rate and payments. H-5DEMAND FEATURE MODEL CLAUSES This obligation [is payable on demand.] [has a demand
feature.] [All disclosures are based on an assumed maturity of one year.] H-6ASSUMPTION POLICY MODEL CLAUSE Assumption: Someone buying your house [may, subject to conditions, be allowed to] [cannot] assume the remainder of the mortgage on the original terms. H-7REQUIRED DEPOSIT MODEL CLAUSE The annual percentage rate does not take into account your required deposit. H8RESCISSION MODEL FORM (GENERAL) NOTICE OF RIGHT TO CANCEL You are entering into a transaction that will result in a [mortgage/lien/security interest] [on/in] your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last: (1) the date of the transaction, which is _______ ; or (2) the date you received your Truth in Lending disclosures; or (3) the date you received this notice of your right to cancel. If you cancel the transaction, the [mortgage/lien/security interest] is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the [mortgage/lien/security interest] [on/in] your home has been cancelled, and we must return to you any money or property you have given to us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. If you decide to cancel this transaction, you may do so by notifying us in writing, at (creditor's name and business address). You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of (date) (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL _______ _______ Consumer's Signature Date H--9--Rescission Model Form (Refinancing with Original Creditor) NOTICE OF RIGHT TO CANCEL Your Right To Cancel You are entering into a new transaction to increase the amount of credit previously provided to you. Your home is the security for this new transaction. You have a legal right under federal law to cancel this new transaction, without cost, within three business days from whichever of the following events occurs last: (1) the date of this new transaction, which is _______ ; or (2) the date you received your new Truth in Lending disclosures; or (3) the date you received this notice of your right to cancel. If you cancel this new transaction, it will not affect any amount that you presently owe. Your home is the security for that amount. Within 20 calendar days after we receive your notice of cancellation of this new transaction, we must take the steps necessary to reflect the fact that your home does not secure the increase of credit. We must also return any money you have given to us or anyone else in connection with this new transaction. You may keep any money we have given you in this new transaction until we have done the things mentioned above, but you must then offer to return the money at the address below. If we do not take possession of the money within 20 calendar days of your offer, you may keep it without further obligation. How To Cancel If you decide to cancel this new transaction, you may do so by notifying us in writing, at _______ (Creditor's name and business address). You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of _______ (Date) _______ (or midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL _______ Consumer's Signature _______ H10Credit Sale Sample
H11Installment Loan Sample
H12Refinancing Sample
H13Mortgage with Demand Feature Sample
H--14--Variable-Rate Mortgage Sample This disclosure describes the features of the adjustable-rate mortgage (ARM) program you are considering. Information on other ARM programs is available upon request. How Your Interest Rate and Payment Are Determined Your interest rate will be based on an index rate plus a margin. Your payment will be based on the interest rate, loan balance, and loan term. --The interest rate will be based on the weekly average yield on United States Treasury securities adjusted to a constant maturity of 1 year (your index), plus our margin. Ask us for our current interest rate and margin. --Information about the index rate is published weekly in the Wall Street Journal. Your interest rate will equal the index rate plus our margin unless your interest rate "caps" limit the amount of change in the interest rate. How Your Interest Rate Can Change Your interest rate can change yearly. Your interest rate cannot increase or decrease more than 2 percentage points per year. Your interest rate cannot increase or decrease more than 5 percentage points over the term of the loan. How Your Monthly Payment Can Change Your monthly payment can increase or decrease substantially based on annual changes in the interest rate. [For example, on a $10,000, 30-year loan with an initial
interest rate of 12.41 percent in effect in July 1996, the maximum
amount that the interest rate can rise under this program is 5
percentage points, to 17.41 percent, and the monthly payment can rise
from a first-year payment of $106.03 to a maximum of $145.34 in the
fourth year. To see what your payment is, divide your mortgage amount
by $10,000; then multiply the monthly payment by that amount. (For
example, the monthly payment for a mortgage amount of $60,000 would be:
$60,000 You will be notified in writing 25 days before the annual payment adjustment may be made. This notice will contain information about your interest rates, payment amount and loan balance.] [Example The example below shows how your payments would have changed under this ARM program based on actual changes in the index from 1982 to 1996. This does not necessarily indicate how your index will change in the future. The example is based on the following assumptions:
*This is a margin we have used recently; your margin may be different. **This interest rate reflects a 2 percentage point annual interest rate cap. ***This interest rate reflects a 5 percentage point lifetime interest rate cap. Note: To see what your payments would have been during that period,
divide your mortgage amount by $10,000; then multiply the monthly
payment by that amount. (For example, in 1996 the monthly payment for a
mortgage amount of $60,000 taken out in 1982 would be:
$60,000 You will be notified in writing 25 days before the annual payment adjustment may be made. This notice will contain information about your interest rates, payment amount and loan balance.] _______ H15Graduated Payment Mortgage Sample
H16Mortgage Sample You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application. If you obtain this loan, the lender will have a mortgage on your home. YOU COULD LOSE YOUR HOME, AND ANY MONEY YOU HAVE PUT INTO IT, IF YOU DO NOT MEET YOUR OBLIGATIONS UNDER THE LOAN. You are borrowing $ _______ (optional
credit insurance is The annual percentage rate on your loan will be _______ %. Your regular [frequency] payment will be $ _______ . [At the end of your loan, you will still owe us $[balloon amount].] [Your interest rate may increase. Increases in the interest rate could increase your payment. The highest amount your payment could increase is to $ _______ .] H18Private Education Loan Application and Solicitation Model Forms Page 1 of 2 _______
H18Private Education Loan Application and Solicitation Model
Form (contd.) Page 2 of 2
H19Private Education Loan Approved Model Form Page 1 of 2
H19Private Education Loan Approved Model Form (contd.) Page 2 of 2
H20Private Education Loan Final Model Form Page 1 of 2
H20Private Education Loan Final Model Form (contd.) Page 2 of 2
H21Private Education Loan Application and Solicitation Sample Page 1 of 2
H21Private Education Loan Application and Solicitation Sample (contd.) Page 2 of 2
H22Private Education Loan Approval Sample Page 1 of 2
H22Private Education Loan Approval Sample (contd.) Page 2 of 2
H23Private Education Loan Final Sample Page 1 of 2
H23Private Education Loan Final Sample (contd.) Page 2 of 2
H--17(A) Debt Suspension Model Clause Please enroll me in the optional [insert name of program], and bill my account the fee of [insert charge for the initial term of coverage]. I understand that enrollment is not required to obtain credit. I also understand that depending on the event, the protection may only temporarily suspend my duty to make minimum payments, not reduce the balance I owe. I understand that my balance will actually grow during the suspension period as interest continues to accumulate. [To Enroll, Sign Here]/[To Enroll, Initial Here]. X _______ H--17(B) Debt Suspension Sample Please enroll me in the optional [name of program], and bill my account the fee of $200.00. I understand that enrollment is not required to obtain credit. I also understand that depending on the event, the protection may only temporarily suspend my duty to make minimum payments, not reduce the balance I owe. I understand that my balance will actually grow during the suspension period as interest continues to accumulate. To Enroll, Initial Here. X _______ [47 FR 20892, Apr. 7, 1981, as amended at 46 FR 29246, June 1, 1981; 52 FR 52 FR 48671, Dec. 24, 1987; 53 FR 467, Jan. 7, 1988; Reg. Z, 60 FR 15473, Mar. 24, 1995; 61 FR 49247, Sept. 19, 1996; 62 FR 63444, 63445, Dec. 1, 1997; 62 FR 66179, Dec. 17, 1997; Reg. Z, 63 FR 2723, Jan. 16, 1998; 66 FR 65618, Dec. 20, 2001; 74 FR 41236, Aug. 14, 2009; 75 FR 7845, Feb. 22, 2010] Appendix I to Part 226Federal Enforcement Agencies The following list indicates which federal agency enforces Regulation Z for particular classes of businesses. Any questions concerning compliance by a particular business should be directed to the appropriate enforcement agency. Terms that are not defined in the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in the International Banking Act of 1978 (12 U.S.C. 3101). National banks and federal branches and federal agencies of foreign banks District office of the Office of the Comptroller of the Currency for the district in which the institution is located. State member banks, branches and agencies of foreign banks (other than federal branches, federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act Federal Reserve Bank serving the district in which the institution is located. Non-member insured banks and insured state branches of foreign banks Federal Deposit Insurance Corporation Regional director for the region in which the institution is located. Savings institutions insured under the Savings Association Insurance Fund of the FDIC and federally chartered savings banks insured under the Bank Insurance Fund of the FDIC (but not including state-chartered savings banks insured under the Bank Insurance Fund). Office of Thrift Supervision Regional Director for the region in which the institution is located. Federal Credit Unions Regional office of the National Credit Union Administration serving the area in which the Federal credit union is located. Air Carriers Assistant General Counsel for Aviation Enforcement and Proceedings, Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590. Creditors Subject to Packers and Stockyards Act Nearest Packers and Stockyards Administration area supervisor. Federal Land Banks, Federal Land Bank Associations, Federal Intermediate Credit Banks and Production Credit Associations. Farm Credit Administration, 490 L'Enfant Plaza, SW., Washington, DC 20578. Retail, Department Stores, Consumer Finance Companies, All Other Creditors, and All Nonbank Credit Card Issuers (Creditors operating on a local or regional basis should use the address of the FTC Regional Office in which they operate.) Division of Credit Practices, Bureau of Consumer Protection, Federal Trade Commission, Washington, DC 20580. [Reg. Z, 46 FR 20892, Apr. 7, 1981, as amended at 50 FR 8708, Mar. 5, 1985; 54 FR 53539, Dec. 29, 1989; 56 FR 51322, Oct. 11, 1991; 57 FR 20400, May 13, 1992]
Appendix J to Part 226Annual Percentage Rate Computations (a) Introduction (1) Section 226.22(a) of Regulation Z provides that the annual percentage rate for other than open end credit transactions shall be determined in accordance with either the actuarial method or the United States Rule method. This appendix contains an explanation of the actuarial method as well as equations, instructions and examples of how this method applies to single advance and multiple advance transactions. (2) Under the actuarial method, at the end of each unit-period (or fractional unit-period) the unpaid balance of the amount financed is increased by the finance charge earned during that period and is decreased by the total payment (if any) made at the end of that period. The determination of unit-periods and fractional unit-periods shall be consistent with the definitions and rules in paragraphs (b) (3), (4) and (5) of this section and the general equation in paragraph (b)(8) of this section. (3) In contrast, under the United States Rule method, at the end of each payment period, the unpaid balance of the amount financed is increased by the finance charge earned during that payment period and is decreased by the payment made at the end of that payment period. If the payment is less than the finance charge earned, the adjustment of the unpaid balance of the amount financed is postponed until the end of the next payment period. If at that time the sum of the two payments is still less than the total earned finance charge for the two payment periods, the adjustment of the unpaid balance of the amount financed is postponed still another payment period, and so forth. (b) Instructions and Equations for the Actuarial Method (1) General Rule The annual percentage rate shall be the nominal annual percentage rate determined by multiplying the unit-period rate by the number of unit-periods in a year. (2) Term of the Transaction The term of the transaction begins on the date of its consummation, except that if the finance charge or any portion of it is earned beginning on a later date, the term begins on the later date. The term ends on the date the last payment is due, except that if an advance is scheduled after that date, the term ends on the later date. For computation purposes, the length of the term shall be equal to the time interval between any point in time on the beginning date to the same point in time on the ending date. (3) Definitions of Time Intervals (i) A period is the interval of time between advances or between payments and includes the interval of time between the date the finance charge begins to be earned and the date of the first advance thereafter or the date of the first payment thereafter, as applicable. (ii) A common period is any period that occurs more than once in a transaction. (iii) A standard interval of time is a day, week, semimonth, month, or a multiple of a week or a month up to, but not exceeding, 1 year. (iv) All months shall be considered equal. Full months shall be measured from any point in time on a given date of a given month to the same point in time on the same date of another month. If a series of payments (or advances) is scheduled for the last day of each month, months shall be measured from the last day of the given month to the last day of another month. If payments (or advances) are scheduled for the 29th or 30th of each month, the last day of February shall be used when applicable. (4) Unit-period (i) In all transactions other than a single advance, single payment transaction, the unit-period shall be that common period, not to exceed 1 year, that occurs most frequently in the transaction, except that (A) If 2 or more common periods occur with equal frequency, the smaller of such common periods shall be the unit-period; or (B) If there is no common period in the transaction, the unit-period shall be that period which is the average of all periods rounded to the nearest whole standard interval of time. If the average is equally near 2 standard intervals of time, the lower shall be the unit-period. (ii) In a single advance, single payment transaction, the unit-period shall be the term of the transaction, but shall not exceed 1 year. (5) Number of Unit-periods Between 2 Given Dates (i) The number of days between 2 dates shall be the number of 24-hour intervals between any point in time on the first date to the same point in time on the second date. (ii) If the unit-period is a month, the number of full unit-periods between 2 dates shall be the number of months measured back from the later date. The remaining fraction of a unit-period shall be the number of days measured forward from the earlier date to the beginning of the first full unit-period, divided by 30. If the unit-period is a month, there are 12 unit-periods per year. (iii) If the unit-period is a semimonth or a multiple of a month not exceeding 11 months, the number of days between 2 dates shall be 30 times the number of full months measured back from the later date, plus the number of remaining days. The number of full unit-periods and the remaining fraction of a unit-period shall be determined by dividing such number of days by 15 in the case of a semimonthly unit-period or by the appropriate multiple of 30 in the case of a multimonthly unit-period. If the unit-period is a semimonth, the number of unit-periods per year shall be 24. If the number of unit-periods is a multiple of a month, the number of unit-periods per year shall be 12 divided by the number of months per unit-period. (iv) If the unit-period is a day, a week, or a multiple of a week, the number of full unit-periods and the remaining fractions of a unit-period shall be determined by dividing the number of days between the 2 given dates by the number of days per unit-period. If the unit-period is a day, the number of unit-periods per year shall be 365. If the unit-period is a week or a multiple of a week, the number of unit-periods per year shall be 52 divided by the number of weeks per unit-period. (v) If the unit-period is a year, the number of full unit-periods between 2 dates shall be the number of full years (each equal to 12 months) measured back from the later date. The remaining fraction of a unit-period shall be (A) The remaining number of months divided by 12 if the remaining interval is equal to a whole number of months, or (B) The remaining number of days divided by 365 if the remaining interval is not equal to a whole number of months. (vi) In a single advance, single payment transaction in which the term is less than a year and is equal to a whole number of months, the number of unit-periods in the term shall be 1, and the number of unit-periods per year shall be 12 divided by the number of months in the term or 365 divided by the number of days in the term. (vii) In a single advance, single payment transaction in which the term is less than a year and is not equal to a whole number of months, the number of unit-periods in the term shall be 1, and the number of unit-periods per year shall be 365 divided by the number of days in the term. (6) Percentage Rate for a Fraction of a Unit-period The percentage rate of finance charge for a fraction (less than 1) of a unit-period shall be equal to such fraction multiplied by the percentage rate of finance charge per unit-period. (7) Symbols. The symbols used to express the terms of a transaction in the equation set forth in paragraph (b)(8) of this section are defined as follows:
(8) General equation. The following equation sets forth the relationship among the terms of a transaction:
(9) Solution of general equation by iteration process. (i) The general equation in paragraph (b)(8) of this section, when applied to a simple transaction in which a loan of $1000 is repaid by 36 monthly payments of $33.61 each, takes the special form:
In this case, no further iterations are required to obtain the annual percentage rate correct to two decimal places, 12.83%. (ii) When the iteration approach is used, it is expected that
calculators or computers will be programmed to carry all
available decimals throughout the calculation and that enough
iterations will be performed to make virtually certain that the annual
percentage rate obtained, when rounded to 2 decimals, is correct.
Annual percentage rates in the examples below were obtained by using a
10 digit programmable calculator and the iteration procedure described
above. (c) Examples for the actuarial method. (1) Single advance transaction, with or without an odd first period, and otherwise regular. The general equation in paragraph (b)(8) of this section can be put in the following special form for this type of transaction:
Example (i): Monthly payments (regular first period) Amount advanced (A) = $5000. Payment (P) = $230. Number of payments (n) = 24. Unit-period = 1 month. Unit-periods per year (w) = 12. Advance, 1-10-78. First payment, 2-10-78. From 1-10-78 through 2-10-78 = 1 unit-period. (t = 1; f = 0) Annual percentage rate (I) = wi = .0969 = 9.69% Example (ii): Monthly payments (long first period) Amount advanced (A) = $6000. Payment (P) = $200. Number of payments (n) = 36. Unit-period = 1 month. Unit-periods per year (w) = 12. Advance, 2-10-78. First payment, 4-1-78. From 3-1-78 through 4-1-78 = 1 unit-period. (t = 1) From 2-10-78 through 3-1-78 = 19 days. (f = 19/30) _______ Annual percentage rate (I) = wi = .1182 = 11.82% Example (iii): Semimonthly payments (short first period) Amount advanced (A) = $5000. Payment (P) = $219.17. Number of payments (n) = 24. Unit-period = 1/2 month. Unit-periods per year (w) = 24. Advance, 2-23-78. First payment, 3-1-78. Payments made on 1st
and 16th of each month. From 2-23-78 through 3-1-78 = 6 days. (t = 0; f = 6/15) Annual percentage rate (I) = wi = .1034 = 10.34% Example (iv): Quarterly payments (long first period) Amount advanced (A) = $10,000. Payment (P) = $385. Number of payments (n) = 40. Unit-period = 3 months. Unit-periods per year (w) = 4. Advance, 5-23-78. First payment, 10-1-78. From 7-1-78 through 10-1-78 = 1 unit-period. (t = 1) From 6-1-78 through 7-1-78 = 1 month = 30 days. From 5-23-78
through 6-1-78 = 9 days. (f = 39/90) Annual percentage rate (I) = wi = .0897 = 8.97% Example (v): Weekly payments (long first period) Amount advanced (A) = $500. Payment (P) = $17.60. Number of payments (n) = 30. Unit-period = 1 week. Unit-periods per year (w) = 52. Advance, 3-20-78. First payment, 4-21-78. From 3-24-78 through 4-21-78 = 4 unit-periods. (t = 4) From 3-20-78 through 3-24-78 = 4 days. (f = 4/7) Annual percentage rate (I) = wi = .1496 = 14.96% (2) Single advance transaction, with an odd first payment, with or without an odd first period, and otherwise regular. The general equation in paragraph (b)(8) of this section can be put in the following special form for this type of transaction:
Example (i): Monthly payments (regular first period and irregular first payment) Amount advanced (A) = $5000. First payment (P1) = $250. Regular payment (P) = $230. Number of payments (n) = 24. Unit-period = 1 month. Unit-periods per year (w) = 12. Advance, 1-10-78. First payment, 2-10-78. From 1-10-78 through 2-10-78 = 1 unit-period. (t = 1; f = 0) Annual percentage rate (I) = wi = .1008 = 10.08% Example (ii): Payments every 4 weeks (long first period and irregular first payment) Amount advanced (A) = $400. First payment (P1) = $39.50 Regular payment (P) = $38.31. Number of payments (n) = 12. Unit-period = 4 weeks. Unit-periods per year (w) = 52/4 = 13. Advance, 3-18-78. First payment, 4-20-78. From 3-23-78 through 4-20-78 = 1 unit-period. (t = 1) From 3-18-78 through 3-23-78 = 5 days. (f = 5/28) Annual percentage rate (I) = wi = .2850 = 28.50% (3) Single advance transaction, with an odd final payment, with or without an odd first period, and otherwise regular. The general equation in paragraph (b)(8) of this section can be put in the following special form for this type of transaction: _______
Example (i): Monthly payments (regular first period and irregular final payment) Amount advanced (A) = $5000. Regular payment (P) = $230. Final payment (Pn) = $280. Number of payments (n) = 24. Unit-period = 1 month. Unit-periods per year (w) = 12. Advance, 1-10-78. First payment, 2-10-78 From 1-10-78 through 2-10-78 = 1 unit-period. (t = 1; f = 0) Annual percentage rate (I) = wi = .1050 = 10.50% Example (ii): Payments every 2 weeks (short first period and irregular final payment) Amount advanced (A) = $200. Regular payment (P) = $9.50. Final payment (Pn) = $30. Number of payments (n) = 20. Unit-period = 2 weeks. Unit-periods per year (w) = 52/2 = 26. Advance, 4-3-78. First payment, 4-11-78. From 4-3-78 through 4-11-78 = 8 days. (t = 0; f = 8/14) Annual percentage rate (I) = wi = .1222 = 12.22% (4) Single advance transaction, with an odd first payment, odd final payment, with or without an odd first period, and otherwise regular. The general equation in paragraph (b)(8) of this section can be put in the following special form for this type of transaction:
Example (i): Monthly payments (regular first period, irregular first payment, and irregular final payment) Amount advanced (A) = $5000. First payment (P1) = $250. Regular payment (P) = $230. Final payment (Pn) = $280. Number of payments (n) = 24. Unit-period = 1 month. Unit-periods per year (w) = 12. Advance, 1-10-78. First payment, 2-10-78. From 1-10-78 through 2-10-78 = 1 unit-period. (t = 1; f = 0) Annual percentage rate (I) = wi = .1090 = 10.90% Example (ii): Payments every two months (short first period, irregular first payment, and irregular final payment) Amount advanced (A) = $8000. First payment (P1) = $449.36 Regular payment (P) = $465. Final payment (Pn) = $200. Number of payments (n) = 20. Unit-period = 2 months. Unit-periods per year (w) = 12/2 = 6. Advance, 1-10-78. First payment, 3-1-78. From 2-1-78 through 3-1-78 = 1 month. From 1-10-78 through
2-1-78 = 22 days. (t = 0; f = 52/60) Annual percentage rate (I) = wi = .0730 = 7.30% (5) Single advance, single payment transaction. The general equation in paragraph (b)(8) of this section can be put in the special forms below for single advance, single payment transactions. Forms 1 through 3 are for the direct determination of the annual percentage rate under special conditions. Form 4 requires the use of the iteration procedure of paragraph (b)(9) of this section and can be used for all single advance, single payment transactions regardless of term.
Example (i): Single advance, single payment (term of less than 1 year, measured in days) Amount advanced (A) = $1000. Payment (P) = $1080. Unit-period = 255 days. Unit-periods per year (w) = 365/255. Advance, 1-3-78. Payment, 9-15-78. From 1-3-78 through 9-15-78 = 255 days. (t = 1; f = 0) Annual percentage rate (I) = wi = .1145 = 11.45%. (Use Form 1 or 4.) Example (ii): Single advance, single payment (term of less than 1 year, measured in exact calendar months) Amount advanced (A) = $1000. Payment (P) = $1044. Unit-period = 6 months. Unit-periods per year (w) = 2. Advance, 7-15-78. Payment, 1-15-79. From 7-15-78 through 1-15-79 = 6 mos. (t = 1; f = 0) Annual percentage rate (I) = wi = .0880 = 8.80%. (Use Form 1 or 4.) Example (iii): Single advance, single payment (term of more than 1 year but less than 2 years, fraction measured in exact months) Amount advanced (A) = $1000. Payment (P) = $1135.19. Unit-period = 1 year. Unit-periods per year (w) = 1. Advance, 7-17-78. Payment, 1-17-80. From 1-17-79 through 1-17-80 = 1 unit-period. (t = 1) From 7-17-78 through 1-17-79 = 6 mos. (f = 6/12) Annual percentage rate (I) = wi = .0876 = 8.76%. (Use Form 2 or 4.) Example (iv): Single advance, single payment (term of exactly 2 years) Amount advanced (A) = $1000. Payment (P) = $1240. Unit-period = 1 year. Unit-periods per year (w) = 1. Advance, 1-3-78. Payment, 1-3-80. From 1-3-78 through 1-3-79 = 1 unit-period. (t = 2; f = 0) Annual percentage rate (I) = wi = .1136 = 11.36%. (Use Form 3 or 4.) (6) Complex single advance transaction. Example (i): Skipped payment loan (payment every 4 weeks) A loan of $2135 is advanced on 1-25-78. It is to be repaid by 24 payments of $100 each. Payments are due every 4 weeks beginning 2-20-78. However, in those months in which 2 payments would be due, only the first of the 2 payments is made and the following payment is delayed by 2 weeks to place it in the next month. Unit-period = 4 weeks. Unit-periods per year (w) = 52/4 = 13. First series of payments begins 26 days after 1-25-78. (t1 = 0; f1 = 26/28) Second series of payments begins 9 unit-periods plus 2
weeks after start of first series. (t2 = 10; f2 = 12/28) Third series of payments begins 6 unit-periods plus 2
weeks after start of second series. (t3 = 16; f3 = 26/28) Last series of payments begins 6 unit-periods plus 2
weeks after start of third series. (t4 = 23; f4 = 12/28) The general equation in paragraph (b)(8) of this
section can be written in the special
form:
Annual percentage rate (I) = wi = .1200 = 12.00% Example (ii): Skipped payment loan plus single payments A loan of $7350 on 3-3-78 is to be repaid by 3 monthly payments of $1000 each beginning 9-15-78, plus a single payment of $2000 on 3-15-79, plus 3 more monthly payments of $750 each beginning 9-15-79, plus a final payment of $1000 on 2-1-80. Unit-period = 1 month. Unit-periods per year (w) = 12. First series of payments begins 6 unit-periods plus 12
days after 3-3-78. (t1 = 6; f1 = 12/30) Second series of payments (single payment) occurs 12
unit-periods plus 12 days after 3-3-78. (t2 = 12; f2 =
12/30) Third series of payments begins 18 unit-periods plus
12 days after 3-3-78. (t3 = 18; f3 = 12/30) Final payment occurs 22 unit-periods plus 29 days after 3-3-78. (t4 = 22; f4 = 29/30) The general equation in paragraph (b)(8) of this
section can be written in the special
form:
Annual percentage rate (I) = wi = .1022 = 10.22% Example (iii): Mortgage with varying payments A loan of $39,688.56 (net) on 4-10-78 is to be repaid
by 360 monthly payments beginning 6-1-78. Payments are the same for 12
months at a time as follows:
Unit period = 1 month. Unit-periods per year (w) = 12. From 5-1-78 through 6-1-78 = 1 unit-period. (t = 1) From 4-10-78 through 5-1-78 = 21 days. (f = 21/30) The general equation in paragraph (b)(8) of this
section can be written in the special
form:
Annual percentage rate (I) = wi = .0980 = 9.80% (7) Multiple advance transactions. Example (i): Construction loan Three advances of $20,000 each are made on 4-10-79, 6-12-79, and 9-18-79. Repayment is by 240 monthly payments of $612.36 each beginning 12-10-79. Unit period + 1 month. Unit-periods per year (w) = 12. From 4-10-79 through 6-12-79 = (2 + 2/30) unit-periods. From 4-10-79 through 9-18-79 = (5 + 8/30) unit-periods. From 4-10-79 through 12-10-79 = (8) unit-periods. The general equation in paragraph (b)(8) of this
section is changed to the single advance mode by treating the 2nd and
3rd advances as negative
payments:
Annual percentage rate (I) = wi = .1025 = 10.25% Example (ii): Student loan A student loan consists of 8 advances: $1800 on
9-5-78, 9-5-79, 9-5-80, and 9-5-81; plus $1000 on 1-5-79, 1-5-80,
1-5-81, and 1-5-82. The borrower is to make 50 monthly payments of $240
each beginning 7-1-78 (prior to first advance). Unit period = 1 month. Unit-periods per year (w) = 12. Zero point is date of first payment since it precedes first advance. _______ From 7-1-78 to 9-5-78 = (2 + 4/30) unit-periods.
Since the zero point is date of first payment, the general
equation in paragraph (b)(8) of this section is written in the single
advance form below by treating the first payment as a negative advance
and the 8 advances as negative
payments:
Annual percentage rate (I) = wi = .3204 = 32.04% [46 FR 20892, Apr. 7, 1981, as amended at 46 FR 29248, June 1, 1981] [Reg. Z, 46 FR 20892, Apr. 7, 1981, as amended at 46 FR 29246, June 1, 1981] Appendix K to Part 226Total Annual Loan Cost Rate Computations for Reverse Mortgage Transactions (a) Introduction. Creditors are required to disclose a series of total annual loan cost rates for each reverse mortgage transaction. This appendix contains the equations creditors must use in computing the total annual loan cost rate for various transactions, as well as instructions, explanations, and examples for various transactions. This appendix is modeled after appendix J of this part (Annual Percentage Rates Computations for Closed-end Credit Transactions); creditors should consult appendix J of this part for additional guidance in using the formulas for reverse mortgages. (b) Instructions and equations for the total annual loan cost rate--(1) General rule. The total annual loan cost rate shall be the nominal total annual loan cost rate determined by multiplying the unit-period rate by the number of unit-periods in a year. (2) Term of the transaction. For purposes of total annual loan cost disclosures, the term of a reverse mortgage transaction is assumed to begin on the first of the month in which consummation is expected to occur. If a loan cost or any portion of a loan cost is initially incurred beginning on a date later than consummation, the term of the transaction is assumed to begin on the first of the month in which that loan cost is incurred. For purposes of total annual loan cost disclosures, the term ends on each of the assumed loan periods specified in § 226.33(c)(6). (3) Definitions of time intervals. (i) A period is the interval of time between advances. (ii) A common period is any period that occurs more than once in a transaction. (iii) A standard interval of time is a day, week, semimonth, month, or a multiple of a week or a month up to, but not exceeding, 1 year. (iv) All months shall be considered to have an equal number of days. (4) Unit-period. (i) In all transactions other than single-advance, single-payment transactions, the unit-period shall be that common period, not to exceed one year, that occurs most frequently in the transaction, except that: (A) If two or more common periods occur with equal frequency, the smaller of such common periods shall be the unit-period; or (B) If there is no common period in the transaction, the unit-period shall be that period which is the average of all periods rounded to the nearest whole standard interval of time. If the average is equally near two standard intervals of time, the lower shall be the unit-period. (ii) In a single-advance, single-payment transaction, the unit-period shall be the term of the transaction, but shall not exceed one year. (5) Number of unit-periods between two given dates. (i) The number of days between two dates shall be the number of 24-hour intervals between any point in time on the first date to the same point in time on the second date. (ii) If the unit-period is a month, the number of full unit-periods between two dates shall be the number of months. If the unit-period is a month, the number of unit-periods per year shall be 12. (iii) If the unit-period is a semimonth or a multiple of a month not exceeding 11 months, the number of days between two dates shall be 30 times the number of full months. The number of full unit-periods shall be determined by dividing the number of days by 15 in the case of a semimonthly unit-period or by the appropriate multiple of 30 in the case of a multimonthly unit-period. If the unit-period is a semimonth, the number of unit-periods per year shall be 24. If the number of unit-periods is a multiple of a month, the number of unit-periods per year shall be 12 divided by the number of months per unit-period. (iv) If the unit-period is a day, a week, or a multiple of a week, the number of full unit-periods shall be determined by dividing the number of days between the two given dates by the number of days per unit-period. If the unit-period is a day, the number of unit-periods per year shall be 365. If the unit-period is a week or a multiple of a week, the number of unit-periods per year shall be 52 divided by the number of weeks per unit-period. (v) If the unit-period is a year, the number of full unit-periods between two dates shall be the number of full years (each equal to 12 months). (6) Symbols. The symbols used to express the terms of a transaction in the equation set forth in paragraph (b)(8) of this appendix are defined as follows: Aj = The amount of each periodic or lump-sum advance to the consumer under the reverse mortgage transaction. i = Percentage rate of the total annual loan cost per unit-period, expressed as a decimal equivalent. j = The number of unit-periods until the jth advance. n = The number of unit-periods between consummation and repayment of the debt. Pn = Min (Baln, Valn). This is the maximum amount that the creditor can be repaid at the specified loan term. Baln = Loan balance at time of repayment, including all costs and fees incurred by the consumer (including any shared appreciation or shared equity amount) compounded to time n at the creditor's contract rate of interest. Valn = Val0(1 +
Symbols used in the examples shown in this appendix are defined as follows: FVxi = The future value of 1 per unit period for x
unit periods, first advance due immediately (at time = 0, which is
consummation).
w = The number of unit-periods per year. I = wi × 100 = the nominal total annual loan cost rate. (7) General equation. The total annual loan cost rate
for a reverse mortgage transaction must be determined by first
solving the following formula, which sets forth the relationship
between the advances to the consumer and the amount owed to the
creditor under the terms of the reverse mortgage agreement for the loan
cost rate per unit-period (the loan cost rate per unit-period is then
multiplied by the number of unit-periods per year to obtain the total
annual loan cost rate I; that is, I = wi):
(8) Solution of general equation by iteration process.
(i) The general equation in paragraph (b)(7) of this
appendix, when applied to a simple transaction for a reverse mortgage
loan of equal monthly advances of $350 each, and with a total amount
owed of $14,313.08 at an assumed repayment period of two years, takes
the special form:
Using the iteration procedures found in steps 1 through 4 of
(b)(9)(i) of appendix J of this part, the total annual loan cost rate,
correct to two decimals, is 48.53%. (ii) In using these iteration procedures, it is expected that
calculators or computers will be programmed to carry all
available decimals throughout the calculation and that enough
iterations will be performed to make virtually certain that the total
annual loan cost rate obtained, when rounded to two decimals, is
correct. Total annual loan cost rates in the examples below were
obtained by using a 10-digit programmable calculator and the iteration
procedure described in appendix J of this part. (9) Assumption for discretionary cash advances. If the
consumer controls the timing of advances made after consummation
(such as in a credit line arrangement), the creditor must use the
general formula in paragraph (b)(7) of this appendix. The total annual
loan cost rate shall be based on the assumption that 50 percent of the
principal loan amount is advanced at closing, or in the case of an
open-end transaction, at the time the consumer (10) Assumption for variable-rate reverse mortgage
transactions. If the interest rate for a reverse mortgage
transaction may increase during the loan term and the amount or timing
is not known at consummation, creditors shall base the disclosures on
the initial interest rate in effect at the time the disclosures are
provided. (11) Assumption for closing costs. In calculating the total annual loan cost rate, creditors shall assume all closing and other consumer costs are financed by the creditor. (c) Examples of total annual loan cost rate computations--(1) Lump-sum advance at consummation. Lump-sum advance to consumer at consummation: $30,000 Total of consumer's loan costs financed at consummation: $4,500 Contract interest rate: 11.60% Estimated time of repayment (based on life expectancy of a consumer at age 78): 10 years Appraised value of dwelling at consummation: $100,000 Assumed annual dwelling appreciation rate: 4% P10 = Min (103,385.84, 137,662.72)
i = .1317069438 Total annual loan cost rate (100(.1317069438 × 1)) = 13.17% (2) Monthly advance beginning at consummation. Monthly advance to consumer, beginning at consummation: $492.51 Total of consumer's loan costs financed at consummation: $4,500 Contract interest rate: 9.00% Estimated time of repayment (based on life expectancy of a consumer at age 78): 10 years Appraised value of dwelling at consummation: $100,000 Assumed annual dwelling appreciation rate: 8% P120 = Min (107,053.63, 200,780.02)
i = .009061140 Total annual loan cost rate (100(.009061140 × 12))=10.87% (3) Lump sum advance at consummation and monthly advances thereafter. Lump sum advance to consumer at consummation: $10,000 Monthly advance to consumer, beginning at consummation: $725 Total of consumer's loan costs financed at consummation: $4,500 Contract rate of interest: 8.5% Estimated time of repayment (based on life expectancy of a consumer at age 75): 12 years Appraised value of dwelling at consummation: $100,000 Assumed annual dwelling appreciation rate: 8%
i = .007708844 Total annual loan cost rate (100(.007708844 × 12)) = 9.25% (b) Reverse mortgage model form and sample form--(1) Model form. Total Annual Loan Cost Rate Loan Terms Age of youngest borrower: Appraised property value: Interest rate: Monthly advance: Initial draw: Line of credit: Initial Loan Charges Closing costs: Mortgage insurance premium: Annuity cost: Monthly Loan Charges Servicing fee: Other Charges: Mortgage insurance: Shared Appreciation: Repayment Limits
The cost of any reverse mortgage loan depends on how long you keep the loan and how much your house appreciates in value. Generally, the longer you keep a reverse mortgage, the lower the total annual loan cost rate will be. This table shows the estimated cost of your reverse mortgage loan, expressed as an annual rate. It illustrates the cost for three [four] loan terms: 2 years, [half of life expectancy for someone your age,] that life expectancy, and 1.4 times that life expectancy. The table also shows the cost of the loan, assuming the value of your home appreciates at three different rates: 0%, 4% and 8%. The total annual loan cost rates in this table are based on the total charges associated with this loan. These charges typically include principal, interest, closing costs, mortgage insurance premiums, annuity costs, and servicing costs (but not costs when you sell the home). The rates in this table are estimates. Your actual cost may differ if, for example, the amount of your loan advances varies or the interest rate on your mortgage changes. Signing an Application or Receiving These Disclosures Does Not Require You To Complete This Loan (2) Sample Form. Total Annual Loan Cost Rate Loan Terms Age of youngest borrower: 75 Appraised property value: $100,000 Interest rate: 9% Monthly advance: $301.80 Initial draw: $1,000 Line of credit: $4,000 Initial Loan Charges Closing costs: $5,000 Mortgage insurance premium: None Annuity cost: None Monthly Loan Charges Servicing fee: None Other Charges Mortgage insurance: None Shared Appreciation: None Repayment Limits Net proceeds estimated at 93% of projected home sale
The cost of any reverse mortgage loan depends on how long you keep the loan and how much your house appreciates in value. Generally, the longer you keep a reverse mortgage, the lower the total annual loan cost rate will be. This table shows the estimated cost of your reverse mortgage loan, expressed as an annual rate. It illustrates the cost for three [four] loan terms: 2 years, [half of life expectancy for someone your age,] that life expectancy, and 1.4 times that life expectancy. The table also shows the cost of the loan, assuming the value of your home appreciates at three different rates: 0%,4% and 8%. The total annual loan cost rates in this table are based on the total charges associated with this loan. These charges typically include principal, interest, closing costs, mortgage insurance premiums, annuity costs, and servicing costs (but not disposition costs--costs when you sell the home). The rates in this table are estimates. Your actual cost may differ if, for example, the amount of your loan advances varies or the interest rate on your mortgage changes. Signing an Application or Receiving These Disclosures Does Not Require You To Complete This Loan [Reg. Z, 60 FR 15474, Mar 1995, as amended at 60 FR 50400, Sept. 29, 1995] Appendix L to Part 226Assumed Loan Periods for Computations of Total Annual Loan Cost Rates (a) Required tables. In calculating the total annual loan cost rates in accordance with appendix K of this part, creditors shall assume three loan periods, as determined by the following table. (b) Loan periods. (1) Loan Period 1 is a two-year loan period. (2) Loan Period 2 is the life expectancy in years of the youngest borrower to become obligated on the reverse mortgage loan, as shown in the U.S. Decennial Life Tables for 1979--1981 for females, rounded to the nearest whole year. (3) Loan Period 3 is the life expectancy figure in Loan Period 3, multiplied by 1.4 and rounded to the nearest full year (life expectancy figures at .5 have been rounded up to 1). (4) At the creditor's option, an additional period may be included, which is the life expectancy figure in Loan Period 2, multiplied by .5 and rounded to the nearest full year (life expectancy figures at .5 have been rounded up to 1).
Appendix M1 to Part 226Repayment Disclosures (a) Definitions. (1) "Promotional terms" means terms of a cardholder's account that will expire in a fixed period of time, as set forth by the card issuer. (2) "Deferred interest or similar plan" means a plan where a consumer will not be obligated to pay interest that accrues on balances or transactions if those balances or transactions are paid in full prior to the expiration of a specified period of time. (b) Calculating minimum payment repayment estimates. (1) Minimum payment formulas. When calculating the minimum payment repayment estimate, card issuers must use the minimum payment formula(s) that apply to a cardholder's account. If more than one minimum payment formula applies to an account, the issuer must apply each minimum payment formula to the portion of the balance to which the formula applies. In this case, the issuer must disclose the longest repayment period calculated. For example, assume that an issuer uses one minimum payment formula to calculate the minimum payment amount for a general revolving feature, and another minimum payment formula to calculate the minimum payment amount for special purchases, such as a "club plan purchase." Also, assume that based on a consumer's balances in these features and the annual percentage rates that apply to such features, the repayment period calculated pursuant to this Appendix for the general revolving feature is 5 years, while the repayment period calculated for the special purchase feature is 3 years. This issuer must disclose 5 years as the repayment period for the entire balance to the consumer. If any promotional terms related to payments apply to a cardholder's account, such as a deferred billing plan where minimum payments are not required for 12 months, card issuers may assume no promotional terms apply to the account. For example, assume that a promotional minimum payment of $10 applies to an account for six months, and then after the promotional period expires, the minimum payment is calculated as 2 percent of the outstanding balance on the account or $20 whichever is greater. An issuer may assume during the promotional period that the $10 promotional minimum payment does not apply, and instead calculate the minimum payment disclosures based on the minimum payment formula of 2 percent of the outstanding balance or $20, whichever is greater. Alternatively, during the promotional period, an issuer in calculating the minimum payment repayment estimate may apply the promotional minimum payment until it expires and then apply the minimum payment formula that applies after the promotional minimum payment expires. In the above example, an issuer could calculate the minimum payment repayment estimate during the promotional period by applying the $10 promotional minimum payment for the first six months and then applying the 2 percent or $20 (whichever is greater) minimum payment formula after the promotional minimum payment expires. In calculating the minimum payment repayment estimate during a promotional period, an issuer may not assume that the promotional minimum payment will apply until the outstanding balance is paid off by making only minimum payments (assuming the repayment estimate is longer than the promotional period). In the above example, the issuer may not calculate the minimum payment repayment estimate during the promotional period by assuming that the $10 promotional minimum payment will apply beyond the six months until the outstanding balance is repaid. (2) Annual percentage rate. When calculating the minimum payment repayment estimate, a card issuer must use the annual percentage rates that apply to a cardholder's account, based on the portion of the balance to which the rate applies. If any promotional terms related to annual percentage rates apply to a cardholder's account, other than deferred interest or similar plans, a card issuer in calculating the minimum payment repayment estimate during the promotional period must apply the promotional annual percentage rate(s) until it expires and then must apply the rate that applies after the promotional rate(s) expires. If the rate that applies after the promotional rate(s) expires is a variable rate, a card issuer must calculate that rate based on the applicable index or formula. This variable rate is accurate if it was in effect within the last 30 days before the minimum payment repayment estimate is provided. For deferred interest plans or similar plans, if minimum payments under the deferred interest or similar plan will repay the balances or transactions in full prior to the expiration of the specified period of time, a card issuer must assume that the consumer will not be obligated to pay the accrued interest. This means, in calculating the minimum payment repayment estimate, the card issuer must apply a zero percent annual percentage rate to the balance subject to the deferred interest or similar plan. If, however, minimum payments under the deferred interest plan or similar plan may not repay the balances or transactions in full prior to the expiration of the specified period of time, a card issuer must assume that a consumer will not repay the balances or transactions in full prior to the expiration of the specified period of time and thus the consumer will be obligated to pay the accrued interest. This means, in calculating the minimum payment repayment estimate, the card issuer must apply the annual percentage rate at which interest is accruing to the balance subject to the deferred interest or similar plan. (3) Beginning balance. When calculating the minimum payment repayment estimate, a card issuer must use as the beginning balance the outstanding balance on a consumer's account as of the closing date of the last billing cycle. When calculating the minimum payment repayment estimate, a card issuer may round the beginning balance as described above to the nearest whole dollar. (4) Assumptions. When calculating the minimum payment repayment estimate, a card issuer for each of the terms below, may either make the following assumption about that term, or use the account term that applies to a consumer's account. (i) Only minimum monthly payments are made each month. In addition, minimum monthly payments are made each month-for example, a debt cancellation or suspension agreement, or skip payment feature does not apply to the account. (ii) No additional extensions of credit are obtained, such as new purchases, transactions, fees, charges or other activity. No refunds or rebates are given. (iii) The annual percentage rate or rates that apply to a cardholder's account will not change, through either the operation of a variable rate or the change to a rate, except as provided in paragraph (b)(2) of this Appendix. For example, if a penalty annual percentage rate currently applies to a consumer's account, a card issuer may assume that the penalty annual percentage rate will apply to the consumer's account indefinitely, even if the consumer may potentially return to a non-penalty annual percentage rate in the future under the account agreement. (iv) There is no grace period. (v) The final payment pays the account in full (i.e., there is no residual finance charge after the final month in a series of payments). (vi) The average daily balance method is used to calculate the balance. (vii) All months are the same length and leap year is ignored. A monthly or daily periodic rate may be assumed. If a daily periodic rate is assumed, the issuer may either assume (1) a year is 365 days long, and all months are 30.41667 days long, or (2) a year is 360 days long, and all months are 30 days long. (viii) Payments are credited either on the last day of the month or the last day of the billing cycle. (ix) Payments are allocated to lower annual percentage rate balances before higher annual percentage rate balances. (x) The account is not past due and the account balance does not exceed the credit limit. (xi) When calculating the minimum payment repayment estimate, the assumed payments, current balance and interest charges for each month may be rounded to the nearest cent, as shown in Appendix M2 to this part. (5) Tolerance. A minimum payment repayment estimate shall be considered accurate if it is not more than 2 months above or below the minimum payment repayment estimate determined in accordance with the guidance in this Appendix (prior to rounding described in § 226.7(b)(12)(i)(B) and without use of the assumptions listed in paragraph (b)(4) of this Appendix to the extent a card issuer chooses instead to use the account terms that apply to a consumer's account). For example, assume the minimum payment repayment estimate calculated using the guidance in this Appendix is 28 months (2 years, 4 months), and the minimum payment repayment estimate calculated by the issuer is 30 months (2 years, 6 months). The minimum payment repayment estimate should be disclosed as 2 years, due to the rounding rule set forth in § 226.7(b)(12)(i)(B). Nonetheless, based on the 30-month estimate, the issuer disclosed 3 years, based on that rounding rule. The issuer would be in compliance with this guidance by disclosing 3 years, instead of 2 years, because the issuer's estimate is within the 2 months' tolerance, prior to rounding. In addition, even if an issuer's estimate is more than 2 months above or below the minimum payment repayment estimate calculated using the guidance in this Appendix, so long as the issuer discloses the correct number of years to the consumer based on the rounding rule set forth in § 226.7(b)(12)(i)(B), the issuer would be in compliance with this guidance. For example, assume the minimum payment repayment estimate calculated using the guidance in this Appendix is 32 months (2 years, 8 months), and the minimum payment repayment estimate calculated by the issuer is 38 months (3 years, 2 months). Under the rounding rule set forth in § 226.7(b)(12)(i)(B), both of these estimates would be rounded and disclosed to the consumer as 3 years. Thus, if the issuer disclosed 3 years to the consumer, the issuer would be in compliance with this guidance even though the minimum payment repayment estimate calculated by the issuer is outside the 2 months' tolerance amount. (c) Calculating the minimum payment total cost estimate. When calculating the minimum payment total cost estimate, a card issuer must total the dollar amount of the interest and principal that the consumer would pay if he or she made minimum payments for the length of time calculated as the minimum payment repayment estimate under paragraph (b) of this Appendix. The minimum payment total cost estimate is deemed to be accurate if it is based on a minimum payment repayment estimate that is within the tolerance guidance set forth in paragraph (b)(5) of this Appendix. For example, assume the minimum payment repayment estimate calculated using the guidance in this Appendix is 28 months (2 years, 4 months), and the minimum payment repayment estimate calculated by the issuer is 30 months (2 years, 6 months). The minimum payment total cost estimate will be deemed accurate even if it is based on the 30 month estimate for length of repayment, because the issuer's minimum payment repayment estimate is within the 2 months' tolerance, prior to rounding. In addition, assume the minimum payment repayment estimate calculated under this Appendix is 32 months (2 years, 8 months), and the minimum payment repayment estimate calculated by the issuer is 38 months (3 years, 2 months). Under the rounding rule set forth in § 226.7(b)(12)(i)(B), both of these estimates would be rounded and disclosed to the consumer as 3 years. If the issuer based the minimum payment total cost estimate on 38 months (or any other minimum payment repayment estimate that would be rounded to 3 years), the minimum payment total cost estimate would be deemed to be accurate. (d) Calculating the estimated monthly payment for repayment in 36 months. (1) In general. When calculating the estimated monthly payment for repayment in 36 months, a card issuer must calculate the estimated monthly payment amount that would be required to pay off the outstanding balance shown on the statement within 36 months, assuming the consumer paid the same amount each month for 36 months. (2) Weighted annual percentage rate. In calculating the estimated monthly payment for repayment in 36 months, an issuer may use a weighted annual percentage rate that is based on the annual percentage rates that apply to a cardholder's account and the portion of the balance to which the rate applies, as shown in Appendix M2 to this part. If a card issuer uses a weighted annual percentage rate and any promotional terms related to annual percentage rates apply to a cardholder's account, other than deferred interest plans or similar plans, in calculating the weighted annual percentage rate, the issuer must calculate a weighted average of the promotional rate and the rate that will apply after the promotional rate expires based on the percentage of 36 months each rate will apply, as shown in Appendix M2 to this part. For deferred interest plans or similar plans, if minimum payments under the deferred interest or similar plan will repay the balances or transactions in full prior to the expiration of the specified period of time, if a card issuer uses a weighted annual percentage rate, the card issuer must assume that the consumer will not be obligated to pay the accrued interest. This means, in calculating the weighted annual percentage rate, the card issuer must apply a zero percent annual percentage rate to the balance subject to the deferred interest or similar plan. If, however, minimum payments under the deferred interest plan or similar plan may not repay the balances or transactions in full prior to the expiration of the specified period of time, a card issuer in calculating the weighted annual percentage rate must assume that a consumer will not repay the balances or transactions in full prior to the expiration of the specified period of time and thus the consumer will be obligated to pay the accrued interest. This means, in calculating the weighted annual percentage rate, the card issuer must apply the annual percentage rate at which interest is accruing to the balance subject to the deferred interest or similar plan. A card issuer may use a method of calculating the estimated monthly payment for repayment in 36 months other than a weighted annual percentage rate, so long as the calculation results in the same payment amount each month and so long as the total of the payments would pay off the outstanding balance shown on the periodic statement within 36 months. (3) Assumptions. In calculating the estimated monthly payment for repayment in 36 months, a card issuer must use the same terms described in paragraph (b) of this Appendix, as appropriate. (4) Tolerance. An estimated monthly payment for repayment in 36 months shall be considered accurate if it is not more than 10 percent above or below the estimated monthly payment for repayment in 36 months determined in accordance with the guidance in this Appendix (after rounding described in § 226.7(b)(12)(i)(F)(1)(i)). (e) Calculating the total cost estimate for repayment in 36 months. When calculating the total cost estimate for repayment in 36 months, a card issuer must total the dollar amount of the interest and principal that the consumer would pay if he or she made the estimated monthly payment calculated under paragraph (d) of this appendix each month for 36 months. The total cost estimate for repayment in 36 months shall be considered accurate if it is based on the estimated monthly payment for repayment in 36 months that is calculated in accordance with paragraph (b) of this appendix. (f) Calculating the savings estimate for repayment in 36 months. When calculating the savings estimate for repayment in 36 months, if a card issuer chooses under § 226.7(b)(12)(i) to round the disclosures to the nearest whole dollar when disclosing them on the periodic statement, the card issuer must calculate the savings estimate for repayment in 36 months by subtracting the total cost estimate for repayment in 36 months calculated under paragraph (e) of this appendix (rounded to the nearest whole dollar) from the minimum payment total cost estimate calculated under paragraph (c) of this appendix (rounded to the nearest whole dollar). If a card issuer chooses under § 227.7(b)(12)(i), however, to round the disclosures to the nearest cent when disclosing them on the periodic statement, the card issuer must calculate the savings estimate for repayment in 36 months by subtracting the total cost estimate for repayment in 36 months calculated under paragraph (e) of this appendix (rounded to the nearest cent) from the minimum payment total cost estimated calculated under paragraph (c) of this appendix (rounded to the nearest cent). The savings estimate for repayment in 36 months shall be considered accurate if it is based on the total cost estimate for repayment in 36 months that is calculated in accordance with paragraph (e) of this appendix and the minimum payment total cost estimate calculated under paragraph (c) of this appendix. [Codified to 12 C.F.R. Part 226, Appendix M1] [Source: 75 Fed. Reg. 7818, February 22, 2010; amended at 76 Fed. Reg. 23004, effective October 1, 2011, mandatory compliance date October 1, 2011. Creditors may, at their option, comply with this rule prior to October 1, 2011.] Appendix M2 to Part 226Sample Calculations of Repayment Disclosures The following is an example of how to calculate the minimum payment repayment estimate, the minimum payment total cost estimate, the estimated monthly payment for repayment in 36 months, the total cost estimate for repayment in 36 months, and the savings estimate for repayment in 36 months using the guidance in Appendix M1 to this part where three annual percentage rates apply (where one of the rates is a promotional APR), the total outstanding balance is $1000, and the minimum payment formula is 2 percent of the outstanding balance or $20, whichever is greater. The following calculation is written in SAS code. data one; /* Note:pmt01 = estimated monthly payment to repay balance in 36 months sumpmts36 = sum of payments for repayment in 36 months month = number of months to repay total balance if making only minimum payments pmt = minimum monthly payment fc = monthly finance charge sumpmts = sum of payments for minimum payments */ * inputs; * annual percentage rates; apr1=0.0; apr2=0.17; apr3=0.21; * insert in ascending order; * outstanding balances; cbal1=500; cbal2=250; cbal3=250; * dollar minimum payment; dmin=20; * percent minimum payment; pmin=0.02; * (0.02+perrate); * promotional rate information; * last month for promotional rate; expm=6; * = 0 if no promotional rate; * regular rate; rrate=.17; * = 0 if no promotional rate; array apr(3); array perrate(3); days=365/12; * calculate days in month; * calculate estimated monthly payment to pay off balances in 36 months, and total cost of repaying balance in 36 months; array xperrate(3); do I=1 to 3; xperrate(I)=(apr(I)/365)*days; * calculate periodic rate; end; if expm gt 0 then xperrate1a=(expm/36)*xperrate1+(1-(expm/36))*(rrate/365)*days; else xperrate1a=xperrate1; tbal=cbal1+cbal2+cbal3; perrate36=(cbal1*xperrate1a+cbal2*xperrate2+cbal3*xperrate3)/(cbal1+cbal2+cbal3); * months to repay; dmonths=36; * initialize counters for sum of payments for repayment in 36 months; Sumpmts36=0; pvaf=(1-(1+perrate36)**-dmonths)/perrate36; * calculate present value of annuity factor; pmt01=round(tbal/pvaf,0.01); * calculate monthly payment for designated number of months; sumpmts36 = pmt01 * 36; * calculate time to repay and total cost of making minimum payments each month; * initialize counter for months, and sum of payments; month=0; do I=1 to 3; perrate(I)=(apr(I)/365)*days; * calculate periodic rate; end; put perrate1=perrate2=perrate3=; eins: month=month+1; * increment month counter; pmt=round(pmin*tbal,0.01); * calculate payment as percentage of balance; if month ge expm and expm ne 0 then perrate1=(rrate/365)*days; if pmt lt dmin then pmt=dmin; * set dollar minimum payment; array xxxbal(3); array cbal(3); do I=1 to 3; xxxbal(I)=round(cbal(I)*(1+perrate(I)),0.01); end; fc=xxxbal1+xxxbal2+xxxbal3-tbal; if pmt gt (tbal+fc) then do; do I=1 to 3; if cbal(I) gt 0 then pmt=round(cbal(I)*(1+perrate(I)),0.01); * set final payment amount; end; end; if pmt le xxxbal1 then do; cbal1=xxxbal1-pmt; cbal2=xxxbal2; cbal3=xxxbal3; end; if pmt gt xxxbal1 and xxxbal2 gt 0 and pmt le (xxxbal1+xxxbal2) then do; cbal2=xxxbal2-(pmt-xxxbal1); cbal1=0; cbal3=xxxbal3; end; if pmt gt xxxbal2 and xxxbal3 gt 0 then do; cbal3=xxxbal3-(pmt-xxxbal1-xxxbal2); cbal2=0; end; sumpmts=sumpmts+pmt; * increment sum of payments; tbal=cbal1+cbal2+cbal3; * calculate new total balance; * print month, balance, payment amount, and finance charge; put month=tbal=cbal1=cbal2=cbal3=pmt=fc=; if tbal gt 0 then go to eins; * go to next month if balance is greater than zero; * initialize total cost savings; savtot=0; savtot= round(sumpmts,1)--round (sumpmts36,1); * print number of months to repay debt if minimum payments made, final balance (zero), total cost if minimum payments made, estimated monthly payment for repayment in 36 months, total cost for repayment in 36 months, and total savings if repaid in 36 months; put title=` '; put title=number of months to repay debt if minimum payment made, final balance, total cost if minimum payments made, estimated monthly payment for repayment in 36 months, total cost for repayment in 36 months, and total savings if repaid in 36 months'; put month=tbal=sumpmts=pmt01=sumpmts36=savtot=; put title=` '; run; [75 FR 7846, Feb. 22, 2010] 1[Reserved] Go back to Text
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