Corrected TIL for an overstated APR

Compliance > Regulation Z - TILA
The Fed clarified that an "overstated APR that corresponds directly with an overstated finance charge is within tolerance and redisclosure is not required. However, not every overstatement of an APR is caused by an overstated finance charge. If there is no finance charge overstatement and the disclosed APR exceeds the 1/8 of a percent tolerance (1/4 of a percent for irregular transactions), or if the disclosed APR exceeds the APR corresponding to an overstated finance charge, redisclosure with a three-business-day waiting period is required."

This clarification is found in the Fed's Consumer Compliance Outlook which can be found here:


http://www.philadelphiafed.org/bank-resources/publications/consumer-compliance-outlook/2011/first-quarter/mortgage-disclosure-improvement-act.cfm

 

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