Should We Change the Rate Instead of Redisclosing?

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Question:

We have discovered that a few variable simple interest loans have been printed on a simple interest note disclosure and security agreement instead of a variable simple interest note disclosure and security agreement. We have considered converting these to fixed rate loans rather than redisclose. Any suggestions?

Answer:

I don't think you have a choice. The note controls. Truth in Lending disclosed the costs of credit, but is based on the contract. If the note doesn't give you the right to adjust rates, you have a fixed rate loan, no matter what you disclosed.

First published on BankersOnline.com 6/12/06