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#2097581 - 09/08/16 09:45 PM
Timing of the Status Check
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Power Poster
Joined: Aug 2001
Posts: 7,364
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Can I beat a dead horse? I am so confused regarding exactly when a status check must be done for a cover loan. Here is a poll. Comments too, please!
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#2097670 - 09/09/16 03:25 PM
Re: Timing of the Status Check
swiggles
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100 Club
Joined: Sep 2015
Posts: 115
Texas
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Section 232.5 from the Federal Register
"the creditor may make a determination regarding a consumer applicants status generally when the creditor enters into a transaction or establishes an account that is (or could be) consumer credit...."
I have interpreted that to mean at application for our institution...
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#2097688 - 09/09/16 04:11 PM
Re: Timing of the Status Check
swiggles
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Diamond Poster
Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
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Feel free to laugh and throw things at me, but I'm still trying to figure out how we would check the status of an applicant 30 days before application. Is this saying that I can check when the customer says I'm looking for a car but hasn't given me enough info for a credit app? If so, I better not see any credit report ordering!
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#2097692 - 09/09/16 04:16 PM
Re: Timing of the Status Check
swiggles
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Power Poster
Joined: Nov 2004
Posts: 5,925
So Cal
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Cornfed, that provision is for psychics who finance their fees. ![wink wink](/forum/images/graemlins/default/wink.gif) Our process will be to check the DOD database soon after we receive an application.
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#2097708 - 09/09/16 04:46 PM
Re: Timing of the Status Check
swiggles
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Gold Star
Joined: Apr 2013
Posts: 420
VA
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Here is how I understand it.
A customer comes in the branch on 9/1/2016 and applies for a car loan. At that time we would pull the customer's military status and all other items needed to qualify the loan.
The same customer then comes back in to the branch on 9/15/2016 and applies for a lot loan. We could use the customer's military status confirmation that was pulled on 9/1/2016 for this new loan because it is within 30 days.
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The answers I give are my opinions. Not legal advice.
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#2097721 - 09/09/16 05:37 PM
Re: Timing of the Status Check
Adam F
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Diamond Poster
Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
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Agreed. And if 30 days has passed since the credit report (or whatever means used to document status) but the loan hasn't closed yet, you would re-check military status. Thanks, NSF. And...ouch!.....you said "lot loans." ![smile smile](/forum/images/graemlins/default/smile.gif) I don't want to do a lot loan! Just sayin'
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#2097730 - 09/09/16 06:01 PM
Re: Timing of the Status Check
swiggles
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Gold Star
Joined: Sep 2007
Posts: 497
WA
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#2097762 - 09/09/16 06:57 PM
Re: Timing of the Status Check
swiggles
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Power Poster
Joined: Aug 2001
Posts: 7,364
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We will be using the credit report method also......new consumer loan request.....new credit report. No re-using of credit reports even if within 30 days. I am one of those in the camp that thinks that is illegal anyway. I am happy to finally "get my way." We typically access credit same day, next day, or possibly the third day.
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The more you sweat in training, the less you bleed in battle.......
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#2097962 - 09/12/16 03:30 PM
Re: Timing of the Status Check
RR Joker
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Power Poster
Joined: Aug 2001
Posts: 7,364
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They SAY they will be.
Experian
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#2098382 - 09/14/16 01:25 PM
Re: Timing of the Status Check
Beth175
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Power Poster
Joined: Aug 2001
Posts: 7,364
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Most likely a consumer loan would close within 30 days of application but for lot loans it is unlikely one would close that quickly so would we need to pull another determination of status prior to loan closing if the last determination was more than 30 days prior but is for this loan request? I am interested in discussion on this as well. Our lot loans take from 30 to 45 days to close, typically.
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The more you sweat in training, the less you bleed in battle.......
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#2098484 - 09/14/16 06:15 PM
Re: Timing of the Status Check
swiggles
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Gold Star
Joined: Sep 2007
Posts: 497
WA
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Most likely a consumer loan would close within 30 days of application but for lot loans it is unlikely one would close that quickly so would we need to pull another determination of status prior to loan closing if the last determination was more than 30 days prior but is for this loan request? I am interested in discussion on this as well. Our lot loans take from 30 to 45 days to close, typically. Yes. The covered borrower check is only good for 30 days. So if they apply and 31 days later you are going to be funding the loan, you will have to check again before funding.
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#2098495 - 09/14/16 06:24 PM
Re: Timing of the Status Check
swiggles
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Power Poster
Joined: Aug 2001
Posts: 7,364
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Oh good grief!!
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The more you sweat in training, the less you bleed in battle.......
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#2098616 - 09/15/16 01:14 PM
Re: Timing of the Status Check
Bville
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Power Poster
Joined: Aug 2001
Posts: 7,364
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232.5(b)(3)(i)(ii) and it depends upon the definition of "initiates a transaction" which is anyone's guess. Is it "initiated" when the borrower applies? Or is it "initiated" when the loan is closed?
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The more you sweat in training, the less you bleed in battle.......
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#2098670 - 09/15/16 03:58 PM
Re: Timing of the Status Check
swiggles
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Gold Star
Joined: Sep 2007
Posts: 497
WA
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Bville- I think the "firm offer of credit" is referring to a pre-approval campaign where you mail out the offer. I never took it to mean if they applied, you approved it, and they took forever to get documents back, etc that you could use the covered borrower check for up to 60 days.
As always with this poorly written reg... Until further clarification is received, we will go with another check if the loan is 30 past the original check. Luckily, we have LOS software that will not allow the loan to proceed if the covered borrower check is over 30 days old.
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#2098731 - 09/15/16 06:44 PM
Re: Timing of the Status Check
swiggles
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100 Club
Joined: Jan 2013
Posts: 169
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I was reading that the same way as you Bville. I initially thought 30 days, but after seeing that in the interpretive rule I changed my initial stance. Any other thoughts?
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#2098732 - 09/15/16 06:51 PM
Re: Timing of the Status Check
swiggles
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Gold Star
Joined: Sep 2007
Posts: 497
WA
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I don't think the interpretation can trump the regulation. I think the regulation is very clear on the 30 days and that it wasn't necessary to expand upon that in the interpretation.
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#2098767 - 09/15/16 08:28 PM
Re: Timing of the Status Check
Beth175
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Power Poster
Joined: Mar 2004
Posts: 2,512
Up North
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(3) Determination and recordkeeping; one-time determination permitted. A creditor who makes a determination regarding the status of a consumer by using one or both of the methods set forth in paragraph (b)(2) of this section shall be deemed to be conclusive with respect to that transaction or account involving consumer credit between the creditor and that consumer, so long as that creditor timely creates and thereafter maintains a record of the information so obtained. A creditor may make the determination described in this paragraph (b), and keep the record of that information obtained at that time, solely at the time—
(i) A consumer initiates the transaction or 30 days prior to that time;
(ii) A consumer applies to establish the account or 30 days prior to that time; or
(iii) The creditor develops or processes, with respect to a consumer, a firm offer of credit that (among the criteria used by the creditor for the offer) includes the status of the consumer as a covered borrower, so long as the consumer responds to that offer not later than 60 days after the time that the creditor had provided that offer to the consumer. If the consumer responds to the creditor's offer later than 60 days after the time that the creditor had provided that offer to the consumer, then the creditor may not rely upon its initial determination in developing or processing that offer, and, instead, may act on the consumer's response as if the consumer is initiating the transaction or applying to establish the account (as described in paragraph (b)(3)(i) or (ii) of this section).
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#2098794 - 09/16/16 12:10 AM
Re: Timing of the Status Check
RR Sarah
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Junior Member
Joined: Dec 2002
Posts: 31
Missouri
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I know there are several posts on here about WHEN you need to verify if they are or are not a "covered borrower". I keep going back to: (i) A consumer initiates the transaction or 30 days prior to that time;
(ii) A consumer applies to establish the account or 30 days prior to that time
I'm understanding (i) to mean when the loan IS consummated or 30 days prior, and (ii) to mean at the time the consumer makes application for the loan, or 30 days prior.
So IF I'm understanding this correctly, I feel at my bank, we will have to do them the day of loan closing. My loan officer's in most cases will not even get an application for most of the covered loans, with the exception of vacant land. We are in a small rural community so the biggest majority of customers have banked with us for several years and loan officer's don't make them fill out new application forms each time.
I am the Compliance Officer and if I had to be certain they are pulling this information at the time of application, I have nothing to verify when they actually made application for the loan. Like I said, I'm so confused on this stuff but does anyone else see this as an issue?
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