; (B) all fees which constitute a finance charge, as defined by rules of the Bureau in accordance with this title; (C) credit insurance premiums, whether optional or required; and (D) all charges and costs for ancillary products sold in connection with or incidental to the credit transaction. (2) Tolerances (A) In general With respect to a credit obligation that is payable in at least 3 fully amortizing installments over a period of 90 days or more, the term fee and interest rate does not include— (i) an application or participation fee that in total do not exceed the greater of $30 or, if there is a limit to the credit line, 5 percent of the credit limit, up to $120, if— (I) such fees are excludable from the finance charge determined under section 106; (II) such fees cover all credit extended or renewed by the creditor to the borrower for 12 months; and (III) the minimum amount of credit extended or available on a credit line is equal to $300 or more; (ii) a late fee that does not exceed either $20 per late payment or $20 per month, charged as authorized by State law or by an agreement between the creditor and the borrower; or (iii) a creditor-imposed fee that does not exceed $15, charged when a borrower tenders payment on a debt with a check drawn on insufficient funds. (B) Adjustments for inflation The Bureau may adjust the amounts of the tolerances established under this paragraph for inflation over time, consistent with the primary goals of protecting consumers and preventing circumvention of the 36-percent fee and interest rate limitation established under subsection (a). (c) Calculations (1) Open end credit plans For an open end credit plan— (A) the fee and interest rate shall be calculated each month, based upon the sum of all fees, charges, and payments described in subsection (b) charged by the creditor during the preceding 1-year period, divided by the average daily balance