§617.7130. What initial disclosures must a qualified lender make to a borrower?
12 C.F.R. § 617.7130
Required disclosures—in general. A qualified lender must disclose in writing:
The interest rate on the loan;
The effective interest rate of the loan;
The amount of stock or participation certificates that a borrower is required to purchase in connection with the loan and included in the calculation of the effective interest rate of the loan;
All loan origination charges included in the effective interest rate;
That stock or participation certificates that borrowers are required to purchase are at risk and may only be retired at the discretion of the board of the institution; and
The various types of loan options available to borrowers, with an explanation of the terms and borrower rights that apply to each type of loan.
Adjustable rate loans. A qualified lender must provide the following information for adjustable rate loans in addition to the requirements of paragraph (a) of this section:
The circumstances under which the rate can be adjusted;
How much the rate can be adjusted at any one time and how much the rate can be adjusted during the term of the loan;
How often the rate can be adjusted;
Any limitations on the amount or frequency of adjustments;
The specific factors that the qualified lender may take into account in making adjustments to the interest rate on the loan; and
If the borrower's interest rate is directly tied to a widely publicized external index:
How and where the borrower may obtain information on changes to the index; and
When the qualified lender will provide written notice of changes to the borrower's interest rate.
Notes, amendments, and revision history
Amendments
[69 FR 16459, Mar. 30, 2004, , as amended at 74 FR 67972, Dec. 22, 2009]
Source
Source: 69 FR 16459, Mar. 30, 2004, unless otherwise noted.
Authority
Authority: Secs. 4.13, 4.13A, 4.13B, 4.14, 4.14A, 4.14C, 4.14D, 4.14E, 4.36, 5.9, 5.17 of the Farm Credit Act (12 U.S.C. 2199, 2200, 2201, 2202, 2202a, 2202c, 2202d, 2202e, 2219a, 2243, 2252).
Source
Source: 69 FR 10907, 10908, Mar. 9, 2004, unless otherwise noted.
Amendments
[69 FR 16459, Mar. 30, 2004, , as amended at 74 FR 67972, Dec. 22, 2009]