Are there any regulatory requirements for how loan disbursements are made for debt consolidation loans?

I am thinking that this is not a regulatory compliance concern but a safety and soundness one. We would want documentation that the debts have been paid off.

Mgmt is considering alternatives to dispersing cashier's checks for debt consolidation loans....most credit cards don't accept wire payments...are there any suggestions outside of a cashier's check for paying debts off in this type of transaction?

There is no regulatory requirement on consumer debt consolidation loans that the items in question are paid direct. However, best practice and common sense would suggest that the bank pay them direct.

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.

We've searched for a better solution to paper checks for credit card disbursement, too. Our concern regards possible harm to the consumer's credit if the debtor is lax in closing the account (which we've had happen). The apparent lack of a wire transfer option is a challenge. If anyone knows of a service provider, I'd be interested to look into them further.