Mutual funds are implementing redemption fees (in itself, a HUGE recordkeeping problem). Assume the plan is subject to Reg Z and in order to fund a participant's $50k loan, mutual fund shares are liquidated w/ a resulting $500 redemption fee. Is that redemption fee a cost of the loan requiring Reg Z disclosure? And would you (a) gross up the loan amount (if possible) or (b) net down the actual loan disbursement by the amount of the RedFee or © handle it separate from the loan transaction?? Obviously some MFs and all MMFs will not have RedFees, so the RedFee amount will be unique to each partcipant and each loan.
THANKS for your comments.

I would argue "No" because in order to be part of the finance charge the fee has to be imposed by the creditor and has to be a condition of loan.