22 Oct 2012

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New Penalty Disclosures On The Way

In the past, financial institutions would not provide borrowers with the complex formulas and examples needed to accurately calculate penalties. All banks use some variation based on posted rates from, in some cases many years ago, which are not posted for the borrower to see. There are a lot of legalese and vagueness surrounding today’s penalty formulas. As of Nov 5, 2012, all financial institutions will have to provide full penalty disclosure to borrowers, including interest rates used for comparison purposes, full description of the formula used and a time frame for which the penalty is valid. All financial institutions will now be required to…

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