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Does anyone do cash advances?
Does anyone allow customers to make loan payments with the cash advance or with the credit card without a cash advance?
Do you charge a fee for the credit card transactions?
Are there any regulatory concerns I should review and/or disclosure requirements for this type of transaction and fee?
Trying to determine if this is allowed, and if it is worth it…. Any input is appreciated. Thanks!
As for regulatory concerns, examiners will evaluate the situation to determine if the credit card payments are a convenience or a necessity. If the borrower lacks the ability to make the payments on the loan other than by increasing the balance on the credit card, the situation is considered an unsafe and unsound banking practice and may be a violation of the Regulation Z Ability to Pay rules (12 CFR 1026.43).
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