Carleton, Inc.
Consumer Lending Software

Carleton Compliance Blog

This blog is a forum for announcements of regulatory changes, regulatory interpretation related to lending computations and computational questions related to: consumer loans and leasing, debt protection and credit insurance, fees, amortization schedules and interest accrual.

Carleton and eOriginal Introduce Joint Digital Solution for Loan Origination Systems

Baltimore and South Bend, Ind. – September 28, 2016 – Carleton, Inc., a leading provider of compliant loan calculation and document generation software solutions, and eOriginal, Inc., the experts in digital transactions, today announced a partnership to deliver

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Posted on Sep 28, 2016

Military APR Requirements are right around the corner... Are you ready? We are...

As October 3rd approaches, the Carleton team wants to ensure that our partners are equipped to comply with the new Military Lending Act requirements. The maximum 36% Military Annual Percentage Rate (MAPR) requirement has been

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Posted on Sep 15, 2016

It's Not Just the Rate...

At Carleton, we spend a lot of time and focus on helping our partner lenders stay compliant in the area of the maximum state finance charge that is allowed by a statute or regulation. Consistent with our expertise, once we drill down to the granular detail, the compliant calculations are not always

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Posted on Jul 11, 2016

Military APR Changes on the Horizon

Carleton announces the June release of the latest CarletonCalcs Origination Module to support the Changes identified in the 2015 amendment

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Posted on May 18, 2016

How "Clean" is That Portfolio?

An industry trend of the steadily increasing pace of regulation and the resulting volume of requirements is placing a great deal of pressure on an already stressed “creditor” compliance management systems

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Posted on Apr 25, 2016

Credit Insurance on the Move!

Three states published new prima facie rate changes for 2016 in a three month period.

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Posted on Jan 15, 2016

APRWin is Not Infallible!

APRWin, from the Office of the Comptroller of the Currency, is a mainstay in compliance circles. It is a great tool, and, like nearly every field examiner in the Western Hemisphere, we use it every day, right alongside our own Carleton APR validation tool.

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Posted on Aug 27, 2014

The Actuarial Method - Beware the Compounding

During a recent training session for a group of newer employees (fairly new by Carleton standards, since our average tenure is approximately 18 years of service), we began discussing the parameters integral to computing a loan payment.

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Posted on Apr 24, 2014

Computing an APR with the new Mortgage Payment Disclosures

Had an interesting phone message from a colleague attending a Mortgage Bankers Conference yesterday. It went something like this…

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Posted on Mar 26, 2014

Is Calculation Validation Included in Your Compliance Program?

Often we fall prey to not being able to see the forest because of the trees. The details overwhelm us and we miss the proverbial big picture. When it comes to the compliance of your credit calculations, I’m afraid these days the opposite may be taking place.

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Posted on Mar 05, 2014

The APR: Semi-monthly Complications

There has been a marked increase over the past couple of years in credit plans being tailored to the payroll frequencies of respective borrowers and retail buyers. Creditors like the security of scheduling payments in accordance with how their customers get paid by their employers.

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Posted on Dec 31, 2013

Preparing for the 2014 HOEPA Regs

We’ve spent the last couple of months putting the finishing touches on revisions to the Carleton “HOEPA” module. Like any software update that deals with regulations, the bulk of the changes were fairly straight-forward. It is the nuances “around the edges” that always makes life a bit more interesting.

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Posted on Nov 08, 2013

Maximum Finance Charges... It's Not Just the Rate

The regulatory climate is about as uncertain and volatile as I have seen it in my 28 plus years at Carleton. Of course, the big dog in the room is the CFPB administering the Dodd Frank Act provisions. It is a task of such enormity that it’s, obviously, being done piece-meal over a several year period and leaving most of us with a sense of impending, “I wonder what’s next.”

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Posted on Aug 29, 2013

MOB Credit Insurance and the CFPB

It’s been an active month for regulation, to say the least. A minor deluge of state based July 1st law changes mixed with the CFPB’s upswing in both proposed and final regulations has made for an awful lot of reading, analysis, and retrofitting of existing programs.

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Posted on Jul 17, 2013

Keeping the "Truth" in Truth-in-Lending

From the first introduction of a bill to promote “Truth in Lending” in 1960 by Senator Paul Douglas of Illinois to its adoption and enactment in 1969, the first principle of the Truth in Lending Act is to ensure the American consumer is given the whole truth about the price he is asked to pay for credit.

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Posted on Apr 22, 2013

MOB Credit Insurance Premiums: It's the Rounding

With the inception of the 2002 HOEPA revisions, we saw a dramatic increase in the use of outstanding balance (aka “monthly remittance”) credit insurance premiums in conjunction with closed end credit transactions. That, of course, was due to the inclusion of single premium credit insurance premiums being included in the points and fees trigger introduced with the Act.

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Posted on Mar 11, 2013

Contemplating the APR

2013 has begun with a deluge of questions, issues, and investigative queries from a diverse cross-section of lenders in the consumer finance industry about the specifics of proper APR computations.

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Posted on Feb 12, 2013

Is It Really a 360 Day Year?

Whenever, in the discussion of consumer credit calculations, I hear someone say “Well, that’s a 360 day year,” I ask myself “Is it really?” and “Why would you want to craft your disclosure calculations to conform to that in the 21st century”. The concept of the “360 day year” is a bit like the energizer bunny: No matter its age, it goes…and it goes…and… well, you get the idea.

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Posted on Dec 07, 2012

More on Truth in Lending APR Disclosures

It’s pretty obvious that the subject of interest rates versus APR’s just isn’t going away. The topic arises daily in our customer service area with questions from clients and users of our software. The more we deal with it, the more we realize it is actually a multifaceted issue.

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Posted on Oct 12, 2012

U.S. Rule vs Actuarial Method APR Disclosure

While the subject has been around now for over 30 years, it’s still a question we get asked a lot: should I use the actuarial or U.S. Rule method to compute and disclose the A.P.R.?

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Posted on Sep 17, 2012

It's All in the Payment - Part II

We’ve been away for a while without a new blog post waiting for the launch of the new Carleton, Inc. website which will be the new home of the Carleton Compliance Blog. Like any undertaking of that magnitude, it is taking a bit longer than originally planned but we’re almost there.

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Posted on Aug 27, 2012

Do your lending calculations handle leap year?

It’s leap day, February 29th. While leap day, and leap year, is ostensibly a corrective calendar measure, attributed most often to Julius Caesar, I am always intrigued when it rolls around every fourth year as to what effect it may, or may not, have on lending and servicing systems.

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Posted on Feb 29, 2012

Why One Size Doesn't Fit All

Fighting the perception that the credit industry is operated and regulated on a standardized basis isn’t easy.

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Posted on Nov 28, 2011

The Rule of 78ths

Almost everyone in the industry is familiar with the term “Rule of 78ths.” Ever think about how much you really know about this widely-used term?

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Posted on Oct 20, 2011

Navigating the Pendulum Swing

What do the following have in common? HMDA, Fair Lending, Suitability, Arbitration, CRA, Ability to Repay, Interchange Fees, Credit Freeze, Risk Retention, Appraiser Independence, FCRA, ECOA. The answer is, they all have been regulatory and compliance hot topics in the last 60 months or so.

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Posted on Sep 21, 2011

The Match Game

An interesting discussion I have often with members from both the industry and the regulators is the proper way to decide if a computed number is “right”. Generally, we see two schools of thought on this subject: one that seeks to “re-originate” the transaction in question and match the disclosed results, and the other which seeks to validate computed numbers by a predetermined set of rules.

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Posted on Aug 26, 2011

A Fee by Any Other Name....

A particularly key compliance component of our project definition process for new clients is the analysis of the properties associated with any fees paid by a consumer as part of a prospective credit transaction. Unlike mortgage lending, fees associated with personal loans, small loans, and retail sales aren’t always transparent based solely on the fee name.

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Posted on Aug 12, 2011

The Deception of Dates

There are days when I absolutely hate the month of February. And not just during that month with its sub-zero temps, dark days and endless snow, but when the fact that it has only 28 days wreaks havoc on system lending calculations.

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Posted on Jul 28, 2011

Every Fee "Affects" the APR

When gathering information to define software, one of the critical areas for accurate disclosure is determining the nature of any fees that will be charged by the lender. A really popular industry description of specific fees is that “this fee affects the APR”.

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Posted on Jul 13, 2011

Single Payment Transactions and Mixed Fruit Results

n the last few months we have had a number of inquiries from clients about how to pass our calculation engine the right information for single advance, single payment transactions. There seems to be a degree of uncertainty when dealing with these types of loans.

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Posted on Jun 13, 2011

It's All in the Payment

The thought for the day centers around the seemingly ubiquitous client request of “why is my payment different when I use your software”? The specifics of the answer to that question permeates the core of what makes consumer credit math a more intimidating subject than at first glance. Bottom line: there is no such thing as a single universal payment amount for a given set of loan data.

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Posted on May 09, 2011

The Interest Rate and the APR

One question we field on a weekly, some weeks daily, basis revolves around the Truth-in-Lending APR disclosure in the “fedbox” being a different value than the originating interest rate. A different value meaning the interest rate was 10.00% but the disclosed TILA APR is 9.98%.

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Posted on Apr 25, 2011