### Question
How is the term bona fide discount points defined?


### Answer
The term **bona fide discount points** is defined in *15 U.S.C. § 1639c* as the following:

> loan discount points which are knowingly paid by the consumer for the purpose of reducing, and which in fact result in a bona fide reduction of, the interest rate or time-price differential applicable to the mortgage

#### Citation:
  - *15 U.S.C. § 1639c*
  - Heading: **CHAPTER 41-CONSUMER CREDIT PROTECTION > SUBCHAPTER I-CONSUMER CREDIT COST DISCLOSURE > Part B-Credit Transactions**

