By the Division of Banks

Excludability Of Title Search Charges From Finance Charge Disclosure Requirements

"Finance charge" is defined as the cost of credit under Mass. Gen. Laws chapter 140D, § 4, The Truth-In-Lending statute. Section 4(e)(1) specifically excludes from the finance charge fees or premiums for title examination, title insurance, or similar purposes. Therefore, it is the position of the Division of Banks that an identifiable charge paid by a retail seller to a third party for a title search in connection with a retail installment sales agreement is not part of the maximum finance charge of 21% APR that may be charged to the customer as a cost of such transaction pursuant to Mass. Gen. Laws chapter 255D.

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