Annual adjustment of fee-based trigger amount for additional disclosure requirements.The Federal Reserve Board on August 12, 2004, published its annual adjustment of the dollar amount that triggers additional disclosure requirements under the Truth in Lending Act The Truth in Lending Act is contained in Title I of the Consumer Credit Protection Act (15 U.S.C.A. § 1601 et seq.). The CCPA is designed to assure that every customer who needs Consumer Credit is given meaningful information concerning the cost of such credit. for home mortgage loans that bear rates or fees above a certain amount. The dollar amount of the fee-based trigger has been adjusted to $510 for 2005 based on the annual percentage change reflected in the consumer price index that was in effect on June June: see month. 1, 2004. The adjustment is effective January 1, 2005. The Home Ownership and Equity Protection Act of 1994 restricts credit terms Credit Terms The conditions under which credit will be extended to a customer. The components of credit terms are: cash discount, credit period, net period. such as balloon payments The final installment of a loan to be paid in an amount that is disproportionately larger than the regular installment. When a loan is made, repayment of the principal, which is the amount of the loan, plus the interest that is owed on it, is divided into installments due at and requires additional disclosures when total points and fees payable by the consumer exceed the fee-based trigger (initially set at $400 and adjusted annually) or 8 percent of the total loan amount, whichever is larger. |
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