Triggers for MDIA

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Question:

Relative to MDIA, are there two triggers that would require the lender to redisclose under MDIA rules? Our QC company has cited us for failing to redisclose our TIL based on our finance charge being outside the $100.00 finance charge being understated. We've gone round and round about this and I truly think we only have to take the .125% APR into consideration for regular loans and .25% for irregular loans varying up or down. I've read 226.18, 226.19 and 226.22 until I'm blue in the face. Help!

Answer:

MDIA redisclosure is based on the APR being out of tolerance. It is very possible to have the finance charge understated by $100 and the APR will remain within tolerance. As long as the APR is within tolerance, redisclosure is not required.

First published on BankersOnline.com 9/06/10