1. Purchase money security interest loan. Credit is excluded as a purchase money security interest loan if: (a) the credit is extended solely and expressly for the purpose of financing a consumer’s initial purchase of a good (e.g., a motor vehicle, television, household appliance, furniture); and (b) the credit is secured by that good. 12 CFR §1041.3(d)(1).
2. Real estate secured credit. g., mobile home, boat, cooperative unit) to be used as a dwelling. 12 CFR §1041.3(d)(2). Comment 1041.3(d)(2)-1.
3. Credit card account. Credit is excluded as a credit card account if it is a credit card account under an open-end (not home-secured) consumer credit plan, as defined in Regulation Z, 12 CFR §1026.2(a)(15)(ii). 12 CFR §1041.3(d)(3).
4. Credit is excluded as a student loan if it is made, insured, or guaranteed pursuant to a program authorized by subchapter IV of the Higher Education Act of 1965, 20 U.S.C. 1070 through 1099d. Additionally, credit is excluded if it is a private education loan as defined in Regulation Z, 12 CFR §(b)(5). 12 CFR §1041.3(d)(4).
5. Non-recourse pawn loan. Credit is excluded as a non-recourse pawn loan if both of the following conditions are satisfied: (a) the lender has sole physical possession and use of the property securing the loan for the entire loan term; and (b) the lender’s sole recourse is the retention of that property. 12 CFR §1041.3(d)(5).
6. Overdraft service; overdraft line of credit. Overdraft services under Regulation E, 12 CFR §(a), and overdraft lines of credit otherwise excluded from the definition of overdraft services under Regulation E, 12 CFR §(a)(1), are excluded from coverage under the Payday Lending Rule. 12 CFR §1041.3(d)(6).
7. Wage advance program loans. Advances by an employer (or its business partner) to the employer’s employee of the value of accrued wages are excluded from the Payday Lending Rule if the entity advancing the funds makes certain warranties as set forth in the Payday Lending Rule. The entity must make the warranties before the funds are advanced and as part of the contract between the parties and on behalf of itself and any business partners. 12 CFR §1041.3(d)(7). More information on this exclusion is available in Payday Lending Rule Covered Loans Question 10 and Question 11.
Credit is excluded as real estate secured credit if the credit is secured by any real property or by personal property (e
8. No cost advances. If the consumer is not required to pay any charge or fee to be eligible to receive or in return for receiving a credit advance, the no-cost advance is excluded from the Payday Lending Rule if the entity advancing the funds warrants all of the following to the consumer (before any amounts are advanced and as part of the contract between the parties):
- The entity does not have any legal or contractual claim or remedy against the consumer based on the consumer’s failure to repay. This provision does not prevent the entity from obtaining a one-time authorization to seek repayment from the consumer’s account. Comment 1041.3(d)(8)-1;
- With respect to the amounts advanced, the entity will not engage in any debt collection activities if the advance is not repaid on the scheduled date;
- The entity will not place the amount advanced as debt with a third party or sell it as debt to a third party; and
- The entity will not report information to a consumer reporting agency concerning the amount check advanced.
For information on loans that are exempted from coverage under the Payday Lending Rule, Payday Lending Rule Covered Loans Question 5.