Regulation Z and Plan loans

[R. Butler]

The Truth in Lending Act provides that a lender is subject to Regulation Z if credit is offered or extended to consumers on a regular basis and such credit is subject to a finance charge or repayable in more than four installments. Credit will considered extended on a regular basis if concumer credit has been offered more than 25 times in a calendar year. Does this mean that there must be 25 new loans in a calendar year or is Regulation Z triggered once there are 25 outstanding loans in total?

Thanks in advance for any guidance.

[rcline46]

It is my opinion that it is 25 loans per year. This ties into the question on the 5500 which asked if an extension of credit (loan) was made to HCE in current year. We only answer yes if a new loan has been issued.

[pmacduff]

I'm with rcline - A year ago in a past life, I used to administer a 401(k) plan with approximately 600 participants with 68 outstanding loans by the 4th year of the plan, but none of the individual plan years had had more than 25 new loans. The accoutant performing the 5500 audit and I were questioning the Reg Z stuff and I believe one or both of us called the IRS (at the time, not PWBA) and were told that it was 25 new loans per year, not 25 total before Reg Z info was required. Just practical experience, but hope it helps!