Check a business-purpose declaration before treating credit as exempt
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- Set out the purpose the file shows, who the borrower is, and what the declaration says. Do not treat the declaration as the exemption.
- What the lawyer must review
- Regulation Z does not apply to an extension of credit primarily for a business, commercial or agricultural purpose, or to an extension of credit to other than a natural person, including a government agency (12 C.F.R. § 1026.3(a)). A form the borrower signs does not itself make the purpose a business purpose. A separate exemption for credit over a threshold is adjusted each year in the official commentary, which was not used for a dollar figure here, and it does not apply to credit secured by real property or by personal property used or expected to be used as the principal dwelling, or to a private education loan. You decide whether (a) fits this loan.
- Written for / version
- United States versionUS
Who does what
| Role | What they do |
|---|---|
| Assistance | Do not begin AI assistance until the responsible lawyer has defined and confirmed its permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Confirm the appropriate instructions, permissions and cultural context with the relevant people before using information or communicating the result.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.