Which of the following fees is a finance charge?

Which of the following fees is a finance charge?
A . A notary fee
B . An origination fee
C . An appraisal fee
D . A late payment fee

View Answer

Answer: B

Explanation:

An origination fee is considered a finance charge under TILA because it represents the cost of obtaining credit. A finance charge includes all fees that a borrower must pay as a condition of securing a loan, excluding certain exempt fees like notary or appraisal fees.

Notary fees (A) and appraisal fees (C) are typically excluded from the finance charge calculation.

Late payment fees (D) are not considered finance charges; they are penalties for delinquent payments.

References:

Truth in Lending Act (TILA), 12 CFR §1026.4 (Regulation Z)

CFPB Finance Charge Definitions