§ 561.13 - Consumer credit classified as a loss.

The term consumer credit classified as a loss means closed-end consumer credit delinquent 120 days or more (5 monthly payments or more) and open-end consumer credit delinquent 180 days or more (7 zero billing cycles or more). For the purposes of computing delinquency, a payment of 90 percent or more of the contractual payment will be considered as a full payment. If a savings association can clearly demonstrate that repayment would occur regardless of delinquency status—for example, the loan is well-secured by collateral and is in the process of collection; the loan is supported by a valid guarantee or insurance; or it is a loan where claims have been filed against a solvent estate—then such loan need not be classified as a loss. The following table illustrates the delinquency computation:

Closed-end Consumer CreditDue datePeriodDelinquency statusClassification3/10 3/10-4/09 Not delinquent6/10 6/10-7/09 90 days or 4 payments Slow.7/10 7/10-8/09 120 days or 5 payments Loss.8/10 8/10-9/09 150 days or 6 payments Loss. Open-end Consumer CreditStatementZero billingDayCycleDaysPayment recordDelinquentClass1 1 0 7 180 6 No payment 150 Slow.8 210 7 No payment 180 Loss.9 240 8 No payment 210 Loss.