Finance Charge, APR, Total of Payments, and Amount Financed – Understanding What These Terms Mean and Their Importance – ON-DEMAND WEBINARS

Date Recorded: November 18, 2021

Presenter: Anetria Cohen, Vice President and Senior Consultant, FORVIS

A two-hour webinar focusing on the definitions, calculations, tolerances.

The Truth-in-Lending Act and Regulation Z requires numerous disclosures, six of which are considered material disclosures for which a violation would cause penalties. Of the six material disclosures, the finance charge and APR are perhaps the most difficult. The regulation does not list all fees that are possible in determining whether a charge is a finance charge or not, and some fees are finance charges (or are not finance charges) depending on the transaction. The finance charge, in turn, helps determine the APR, but the calculation of APR is different for closed-end and open-end transactions. It is important that we fully understand this part of Regulation Z as finance charge and APR violations can have an impact on the right of rescission, may result in restitution, and even civil liability.

In addition to finance charges and APR, we will review the calculation for Total of Payments and Amount Financed, which are important disclosures for closed-end transactions.

This webinar explains what a finance charge is, its effect on the APR, the total of payments calculation, and how to calculate the amount financed. We will also review the tolerance rules.

HERE IS WHAT YOU WILL LEARN:

• The “ins” and “out” of finance charges and APR, including:
  • What is considered a finance charge;
  • Charges that can be specifically excluded from the finance charge;
  • The difference between a finance charge and a prepaid finance charge;
  • The difference between the interest rate and the APR;
  • The finance charge and APR tolerance for both real estate and non-real
• Total of payments, including the calculation and tolerance for TRID and non-TRID loans
• Amount Financed