Answers About Consumer Loans

Select from the following questions about consumer loans, car loans, and other personal loans.


Every time I apply for a loan, the bank turns me down. Can you make the bank give me a loan?

No. The OCC does not make individual credit decisions.

We encourage national banks to make prudent loans to sound borrowers, but we cannot require banks to extend credit to individuals or businesses.

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I am trying to get the payout or payoff amount on a loan, but the bank won't give it to me. What can I do?

You should contact the bank's loan department for this information.

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I was late with one payment and the bank repossessed my car. Can it do this?

There are no banking laws or regulations that address when a national bank may repossess your vehicle. Technically, if your payment is one day late, you have defaulted on your loan.

Each bank may set its own policy on the conditions of default that will trigger repossession. (These conditions of default are included in the loan contract.) When you accepted the loan, you accepted these conditions. You should contact the bank if you have questions about the terms of your contract

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Can I cancel the credit protection on my bank loan?

Generally, yes. You should be able to cancel the credit protection feature on your loan. However, your Account Agreement will define any requirements or penalties associated with cancelling this feature. You should contact the bank directly to find out.

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My bank agreed to forgive $3,000 on my loan, but then reported it to the IRS. Now I have to pay taxes on it. Can the bank do this?

Yes. You most likely received an IRS 1099-C (Cancellation of Debt form) that showed the $3,000 as income to you. Under the IRS code, the cancellation or forgiveness of loans is generally considered to be income to the borrower. The lender must report that income to the IRS, and you have to pay taxes on it.

If you have other questions, please consult with a tax professional.

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Can the bank close my credit card / line of credit account?

Yes. Generally, national banks can close an account at any time and for any reason. Federal banking laws and regulations do not address the closing of accounts by banks.

Depending on the circumstances of the closure, the bank may be required to send you a notice of adverse action explaining why your account was closed.

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My loan was charged-off. So why is the bank still requiring payment?

A national bank must charge off any loan that has been delinquent for a period of time or deemed uncollectible. This is simply an accounting procedure; it does not affect your obligation to the bank. Unless the bank forgave or cancelled the debt, you are still obligated to repay the loan.

You should refer to your Account Agreement or contract.

Once a loan has been charged-off, the bank may attempt to collect the debt itself, or it can sell the account to a collection agency.

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How can I find out why my bank denied my loan application?

Within 30 days of receiving a completed application, your bank should notify you of its action—and the reasons for that action—on your application. This is required by law under the Equal Credit Opportunity Act.

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Can the bank change my payment due date—say, from the 1st of the month to the 15th of the month?

Yes, your Account Agreement allows the bank to make changes to your account due date as long as the bank sends you notice of the change at least 15 days in advance.

Please review your Account Agreement, which is the contract governing your credit card account. It includes information on changes that can occur to an account.

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I paid off my mortgage / home equity / consumer loan and the bank charged me a high prepayment penalty. I wasn't aware that the loan had a prepayment penalty. What can I do?

Review your loan agreement, which is the contract between you and the bank, to determine if they specify the circumstances that could result in a prepayment penalty.

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Is the bank required to provide Truth in Lending disclosures for all loans?

No. The bank is not required to provide a Truth in Lending disclosure, which outlines the cost of the requested credit, for the following types of loans:

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Can a bank located in one State make a loan to someone living in a different State?

Yes. Generally, national banks can make loans to individuals living in a different State.

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Phone: 800-613-6743
E-mail: customer.assistance
@occ.treas.gov