Closing Protection Letter - Finance Charge?

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Question:

Is a Closing Protection Letter considered a finance charge for purposes of Reg. Z?

Answer:

Since the CPL indemnifies the lender for failures of the title company's agent in executing the lender's instructions for the closing of the loan, it would be a finance charge, as I do not believe it falls in any category found in 226.4(c).

First published on BankersOnline.com 11/16/09