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Lending Compliance
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Only if there are State law implications. For example, standard bridge loans in Texas are not really doable without running through some hoops.
" the borrowers would not "technically" own the home being purchased..."
I do not understand that statement. Is the property not transferring to them at closing via a warranty deed? Why would they not "own" the new property?
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HMDA
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Our bank assets total $1.4 billion as of 1/1/25. In 2023, we originated approximately 260 open-end mortgages and 175 closed-end mortgages that were HMDA reportable. In 2024, we originated approximately 260 open-end and 190 closed-end mortgages that were HMDA reportable. I have not been keeping up on Reg C changes over the past couple of years, so I have a couple of questions that I am hoping you can give me feedback on:
1) Based on the information above, do we qualify for the partial reporting exemption for 2025?
2) A larger bank will acquire our bank in Q3 of this year. The total assets between them and us will be approximately $8 billion. The larger bank reports all fields. Assuming we can report 2 separate LARs for 2025, and that our bank currently qualifies for a partial exemption (referring to question #1), when must our bank start collecting all HMDA fields?
THANK YOU in advance for your help!!
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Need to Remain Anonymous
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Hello,
1005.11(c) of Reg E notes that banks are required to promptly determine whether an error occurred within 10 business days and must report the results to the consumer within 3 business days of completing its investigation. The requirement seems pretty straightforward, however what is unclear is what is considered notified in terms of informing the consumer of the results.
If we complete an investigation and mail a response, for the 3 business days is it considered delivered when the written notification is mailed, or is it considered delivered once the customer receives the bank letter in their hand?
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Chat! - BOL Watercooler
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Stole the Show - Kygo & Parson James
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TRID - TILA/RESPA Integrated Disclosures
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In a simultaneous closing for 1st & 2nd mortgage purchase loan, should the amount of the 2nd mortgage amount be shown in the 1st Mtge Cash to Close section, Funds for Borrower, or should it appear only on the 1st Mtge CD?
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Deposits and Payments
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No maximum fee, but there is this requirement from MCL 567.227:
(3) A holder may not impose with respect to property described in subsection (1) any charge due to dormancy or inactivity or cease payment of interest unless all of the following requirements are met:
(a) There is an enforceable written contract between the holder and the owner of the property providing that the holder may impose a charge or cease payment of interest.
(b) For the property of a value in excess of $2.00, the holder, not more than 3 months before the initial imposition of those charges or cessation of interest, has given written notice to the owner of the amount of those charges at the last known address of the owner stating that those charges will be imposed or that interest will cease. However, the notice required in this subdivision need not be given with respect to charges imposed or interest ceased before March 28, 1996.
(c) The holder regularly imposes such charges or ceases payment of interest and does not regularly reverse or otherwise cancel them or retroactively credit interest with respect to the property.
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Lending Compliance
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Our Chief Accounts Officer who is our underwriter will sign off if it's within his authority, then to our Board loan committee if over his authority, just like any other loan. If the loan were to our CAO, then it would go directly to the Board loan committee.
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Chat! - BOL Watercooler
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Call Me When You're Sober - Evanescence
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eBanking / Technology
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Is anyone familiar with the requirements below? Would this apply if unsecured personal loans are applied for within a bank app?
Apps that provide personal loans, including but not limited to apps which offer loans directly, lead generators, and those who connect consumers with third-party lenders, must have the App Category set to “Finance” in Play Console and disclose the following information in the app metadata:
Minimum and maximum period for repayment.
Maximum Annual Percentage Rate (APR), which generally includes interest rate plus fees and other costs for a year, or similar other rate calculated consistently with local law.
A representative example of the total cost of the loan, including the principal and all applicable fees.
A privacy policy that comprehensively discloses the access, collection, use, and sharing of personal and sensitive user data, subject to the restrictions outlined in this policy.
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General Discussion
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We have a dual employee that sells property and casualty insurance, including builders risk and flood insurance policies. Do these types of sales trigger the FDIC NDIP disclosures? She is licensed to sell both term life and universal policies but mainly sells property insurance.
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Indiana
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Nothing in IN statutes that I am aware of.
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Michigan
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Hello,
Our compliance team got a research request to see if there's anything in Michigan State Law that prohibits using a BPO instead of an appraisal when a borrower requests cancellation of PMI. All our research seems to suggest that Homeowner's Protection Act is the law primarily governing PMI cancellation in Michigan, but I wanted to reach out on here to see if anyone else was familiar with this.
Thank you in advance.
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eBanking / Technology
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To add just a bit -
My wife and son have spent far more than I care to admit on Apple buying songs and games (in the case of my son). Charges from $0.99 upwards of $20 and everywhere in between. If my bank contacted me with concerns about these transactions, I would have to do the same thing as your customer. I would have to look and ask questions before I could determine anything and before I could state "these are unauthorized" or "these are all okay."
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Lending Compliance
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Thank you, Scott and I agree.
Mgmt wants to streamline the process for paying debtors directly...other than using cashier's checks. I was hoping someone might have some suggestions to offer.
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Need to Remain Anonymous
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1. Nacha rules allows you to solely post from account number, but you have the ability to look at rejected transactions to correct if you are able to determine the true recipient. now, if you have 25 clients named John Doe, you're going to have a hard time determining which one is correct. but if the name on the account is Heinrich Lieberman then chances are you only have 1 and can post like that by name. but you are not required, you are free to return using uing R03 - no account, unable to locate account, where the account number is valid for the bank but does not meet the customer name.
2, you should not be using R05 for this return, your client has said this is unauthorized, so you should be returning using r10 - customer advises not authorized, they will need to complete a WSUD.
3. if you have an item coming in that does not match a customer account, why would you not return it? you're just going to randomly debit a customer? Use R03 as noted above to return.
Your ACH department should have written procedures to handle routine ACH issues such as this, and the A in ACH stands for Automated, so I would steer them towards eliminating the manual lookup and manual posting and let the automated process work. if the account is not valid, the item is returned next day, no questions asked.
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General Discussion
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Yes, that particular portion of the regulation only applies to employment related activity. The consultant is assuming (or has determined) that: 1) the bank is in fact a government contractor subject to the regulation; 2) the contract is for more than $50k; and 3) the bank has 50 or more employees.
If the regulation does apply, the bank has to post a notice on bulletin boards in its offices, and has to ensure that applicants also get the notice. Where in that part of the regulation is the requirement to include the notice in vendor contracts?
There is another part of the regulation that requires a contractor to include a notice in any subcontracts, but it's not a notice required generally in all vendor contracts.
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CRA
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Thank you for responding. A private message has been sent.
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BSA/AML/CIP/OFAC Forum
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If you've ever opened an AML file prior to its submission to FinCEN, you see that it's a long string of text. (It's fun to audit, let me tell you.) All the pretty formatting in the discrete form disappears when it is submitted. If you want a nicely organized table of transactions for law enforcement to review, upload a .csv file to the SAR and summarize the attachment in the narrative. It's win-win. Less for you to type, and easier for law enforcement to read.
I have a webinar coming up on April 23rd on this topic.
https://mycomplianceresource.com/events/sar-line-by-line-completion-what-do-all-the-boxes-mean/
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Lending Compliance
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Here is my understanding.
I owe back taxes. I make payment arrangements prior to the IRS filing a Federal Tax Lien. That is what paragraph 3 is referring too,
If I make such arrangements and I go delinquent based on any Federal Tax Debt agreement, then I am ineligible.
If an actual lien has been filed, I may still enter into a payment arrangement. The lien can remain outstanding, but I must have entered into the arrangement prior to application allowing me to make at least three payments timely.
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Need to Remain Anonymous
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We are looking to do our next community event by holding a drive to benefit a local nonprofit organization. We want to allow bank customers the opportunity to donate, in the form of personal hygiene/care items or money. Is there a problem/concern with customers donating money towards this drive? We’d deposit any funds donated to a special GL, then purchase needed items for the organization.
Could you use this opportunity for the local nonprofit to open an account at your FI? Not sure if that's a conflict of interest or not; I'm sure someone will have a more expert opinion. Then the funds could be directly deposited into their account, versus a bank GL.
Would you create a special GL for the funds? Or is there a "general" GL funds these would go to? How do you plan to keep track of financial donations?
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HMDA
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FWIW I agree. You also have the applicant's stated purpose the RLOC will be used to purchase dwellings.
A Financial Institution may rely on an applicant’s oral or written statement regarding the
proposed use of the loan proceeds. For example, a Financial Institution could use a check box or
a purpose line on an Application form. If an applicant provides no statement as to the proposed
use of the proceeds, and the Covered Loan is not a Home Purchase Loan, cash-out Refinancing,
or Refinancing, a Financial Institution reports the Covered Loan as for an “other” purpose.
Comment 4(a)(3)-1.
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CRA
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On May 7 we will broadcast a free webinar about the proposed repeal of the 2023 rule. If anyone is interested you can pm me and send me your email address and I can send you a link.
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Lending Compliance
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Inherent_Risk, this is a perfect case study example that I like to avoid when working with lenders. 
On one side, the lender didn't say they can't do the loan. They explained what they generally do and encouraged the applicant to apply.
On the other side, the lender did (at least slightly) discourage the applicant from applying by saying they generally don't take condos as collateral. When the applicant said "I live in a condo," this can be seen as a direct correlation to the statement that the bank doesn't like condos as collateral, so the applicant may have believed they would be denied and, therefore, didn't want to waste anyone's time.
So for me, I would likely error on the side of providing the AA notice. Is it "required?" Possibly not. But if we provide the notice when it technically wasn't required, we are probably in a better situation than if we didn't provide it and an examiner says we should have provided it.
Nice job on the "just for fun" discussion on a Thursday afternoon.
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HMDA
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As Randy said, the purpose is irrelevant since it is required by Reg B/ECOA. That said, the purpose is so you have the information on file which allows you, auditors, and examiners to better evaluate your Fair Lending posture. While a data reporting rule (i.e., HMDA) doesn't require Reg B data to be sent anywhere, Reg B is a data collection rule that can still be used to help evaluate fair lending compliance of the financial institution.
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BSA/AML/CIP/OFAC Forum
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Thanks for your input. Yes, this was a grand jury subpoena. Information was already identified, but subpoena certainly placed a different perspective on the transaction.
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