15 U.S.C. § 1606

Determination of annual percentage rate

Read at: OLRCuscode.house.gov CornellLII GovInfogovinfo.gov JustiaTitle 15 CasesGoogle Scholar

(a) “Annual percentage rate” definedThe annual percentage rate applicable to any extension of consumer credit shall be determined, in accordance with the regulations of the Bureau,(1) in the case of any extension of credit other than under an open end credit plan, as(A) that nominal annual percentage rate which will yield a sum equal to the amount of the finance charge when it is applied to the unpaid balances of the amount financed, calculated according to the actuarial method of allocating payments made on a debt between the amount financed and the amount of the finance charge, pursuant to which a payment is applied first to the accumulated finance charge and the balance is applied to the unpaid amount financed; or(B) the rate determined by any method prescribed by the Bureau as a method which materially simplifies computation while retaining reasonable accuracy as compared with the rate determined under subparagraph (A).11 So in original.(2) in the case of any extension of credit under an open end credit plan, as the quotient (expressed as a percentage) of the total finance charge for the period to which it relates divided by the amount upon which the finance charge for that period is based, multiplied by the number of such periods in a year.(b) Computation of rate of finance charges for balances within a specified range

Where a creditor imposes the same finance charge for balances within a specified range, the annual percentage rate shall be computed on the median balance within the range, except that if the Bureau determines that a rate so computed would not be meaningful, or would be materially misleading, the annual percentage rate shall be computed on such other basis as the Bureau may be regulation require.

The disclosure of an annual percentage rate is accurate for the purpose of this subchapter if the rate disclosed is within a tolerance not greater than one-eighth of 1 per centum more or less than the actual rate or rounded to the nearest one-fourth of 1 per centum. The Bureau may allow a greater tolerance to simplify compliance where irregular payments are involved.

(d) Use of rate tables or charts having allowable variance from determined rates

The Bureau may authorize the use of rate tables or charts which may provide for the disclosure of annual percentage rates which vary from the rate determined in accordance with subsection (a)(1)(A) by not more than such tolerances as the Bureau may allow. The Bureau may not allow a tolerance greater than 8 per centum of that rate except to simplify compliance where irregular payments are involved.

(e) Authorization of tolerances in determining annual percentage rates

In the case of creditors determining the annual percentage rate in a manner other than as described in subsection (d), the Bureau may authorize other reasonable tolerances.

(Pub. L. 90–321, title I, § 107, May 29, 1968, 82 Stat. 149; Pub. L. 96–221, title VI, § 607, Mar. 31, 1980, 94 Stat. 170; Pub. L. 111–203, title X, § 1100A(2), July 21, 2010, 124 Stat. 2107.)Editorial NotesAmendments

2010—Pub. L. 111–203 substituted “Bureau” for “Board” wherever appearing.

1980—Subsec. (c). Pub. L. 96–221, § 607(a), substituted provisions relating to allowable tolerances for purposes of compliance with disclosure requirements, for provisions relating to rounding off of annual percentage rates which are converted from single add-on or other rates.

Subsec. (e). Pub. L. 96–221, § 607(b), struck out reference to subsection (c) of this section.

Subsec. (f). Pub. L. 96–221, § 607(c), struck out subsec. (f) setting forth requirements for form of expressing percentage rates prior to Jan. 1, 1971.

Statutory Notes and Related SubsidiariesEffective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–221 effective on expiration of two years and six months after Mar. 31, 1980, with all regulations, forms, and clauses required to be prescribed to be promulgated at least one year prior to such effective date, and allowing any creditor to comply with any amendments, in accordance with the regulations, forms, and clauses prescribed by the Board prior to such effective date, see section 625 of Pub. L. 96–221, set out as a note under section 1602 of this title.

Notes of Decisions

Cited in 62 cases (4 in the last 5 years), 1973–2025 · leading case: Karun N. Jackson v. Specialized Loan Servicing LLC, 898 F.3d 1348 (11th Cir. 2018).

Sort: Relevance Newest Treatment

Karun N. Jackson v. Specialized Loan Servicing LLC, 898 F.3d 1348 (11th Cir. 2018). “By calculating the annual percentage rate (APR) based upon improperly calculated and disclosed finance charges and amount financed, 15 U.S.C. § 1606 , Regulation Z§ 226.22, Defendants understated the disclosed annual percentage *1371 rate in violation of 15 U.”

Joyce Green v. U.S. Cash Advance Illinois, 724 F.3d 787 (7th Cir. 2013). · cites it 2× “Cash Advance, from which she borrowed money, misstated the loan’s annual percentage rate and so violated the Truth in Lending Act, 15 U.S.C. §1606 . The lender asked the district judge to stay the litigation and direct arbitration under ¶17 of the loan agreement: 2 No.”

Lovick v. Ritemoney Ltd., 378 F.3d 433 (5th Cir. 2004). “Lovick does not present a claim under the Truth in Lending Act, 15 U.S.C. § 1606 (a)(1)(A).) The Note stated, in relevant part: Payment of third-party fees: In connection with any third-party fees such as fees for loan brokerage or other credit services, I acknowledge the…”

Nelson v. Pearson Ford Co., 186 Cal. App. 4th 983 (Cal. Ct. App. 2010). · cites it 2× “( 15 U.S.C. § 1606 (c); 12 C.F.R. § 226.22 (a)(2) (2010).”

Est. of Baxter v. Shaw Assocs., Inc., 797 So. 2d 396 (Miss. Ct. App. 2001). · cites it 2× “Mississippi responded to interest rate problems by adopting some reforms in 1972, but they were vetoed by Governor Bill Waller, Sr.”

Velazquez v. GMAC Mortg. Corp., 605 F. Supp. 2d 1049 (C.D. Cal. 2008). · cites it 2× “As directed by 15 U.S.C. § 1606 , APR is calculated in relation to the “finance charge.”

Conder v. Home Sav. of Am., 680 F. Supp. 2d 1168 (C.D. Cal. 2010). · cites it 2× ““Finance charge,” meanwhile, is defined as “the sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit.”

Rucker v. Sheehy Alexandria, Inc., 228 F. Supp. 2d 711 (E.D. Va. 2002). · cites it 2× “See 15 U.S.C. § 1606 (c). And, Regulation Z, promulgated by the Federal Reserve pursuant to TILA, provides detailed and complex instructions for accurate APR calculation.”

Copley v. Rona Enter., Inc., 423 F. Supp. 979 (S.D. Ohio 1976). · cites it 2× “15 U.S.C. § 1606 defines annual percentage rate as a function of the finance charge and the unpaid balances of the amount financed.”

Connie Edwards v. Your Credit, Inc., 148 F.3d 427 (5th Cir. 1998). “See 15 U.S.C. § 1606 ; First Acadiana Bank v.”

Barnes v. West, Inc., 243 F. Supp. 2d 559 (E.D. Va. 2003). · cites it 2× “2d at 717 -718 (citing 15 U.S.C. § 1606 (c)). TILA also allows for a $100 difference between the actual finance charge, and the disclosed finance charge.”

Archer v. Nissan Motor Acceptance Corp., 550 F.3d 506 (5th Cir. 2008). “See Truth in Lending Act, 15 U.S.C. § 1606 ; Reg. Z, 12 C.F.R. § 226.”

Show all 62 citing cases →

Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.