15 USC 1606 - Determination of annual percentage rate

U.S Code last checked for updates: Nov 22, 2024

§ 1606.

Determination of annual percentage rate

(a)

“Annual percentage rate” defined

The 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).1

 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

(c)

Allowable tolerances for purposes of compliance with disclosure requirements

(d)

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

(e)

Authorization of tolerances in determining annual percentage rates

(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.)

cite as: 15 USC 1606