10/20/2024
If a financial institutions normal process for commercial property loans is to start appraisal bids/engagements post-decision, can there be fair lending violations for starting appraisal bids/engagements pre-decision for customers based on length of relationship with the financial institution, credit exposure with the financial institution, etc?
07/28/2024
This concerns a commercial revolving line of credit that is secured by the borrowers' home. This loan is done in the individuals' names and the purpose of the loan is to purchase, renovate and sell investment houses.
The thing that is confusing me is that they aren't making purchases or renovating with the line right now. Would this loan still be HMDAreportable since it is secured by the borrowers' primary residence?
06/09/2024
Under the The Servicemembers Civil Relief Act (SCRA), (50 U.S.C. § 4026), it states that under "Availability of non-business assets to satisfy obligations" that If the trade or business (without regard to the form in which such trade or business is carried out) of a servicemember has an obligation or liability for which the servicemember is personally liable, the assets of the servicemember not held in connection with the trade or business may not be available for satisfaction of the obligation or liability during the servicemember’s military service.
Do the "assets of the servicemember not held in connection with the trade or business" include a personal guarantee of the servicemember?
04/07/2024
If a lender is cancelling the SBA guarantee on the existing SBA loan and converting that to a commercial loan, is it acceptable to pay off the existing SBA loan and simply create new commercial loan, or should we use a loan modification instead?
03/17/2024
Our residential mortgage lending team is very thorough to ensure that the Lending Committee signs-off on adverse action/denial documentation. We are newer to commercial lending. Thus, the Board approves all commercial loans.
The commercial lending officer has been given the discretion to decline certain requests before they even get to the Board. The question is more of a compliance/procedural one. Is it sufficient for only the commercial loan officer to sign-off on adverse actions, or should we be obtaining Board sign-off on these as well....under our current approval structure?
12/31/2023
If a customer changes from a Corporation (Inc) to an LLC do new loan documents need to be prepared?
11/26/2023
Currently, the bank I am employed by uses commercial loan applications. In my prior work lives, the banks never had a specific cmmercial loan application. Are they required? I realize some compliance related items are collected on them; but believe this could be done in another manner. Thoughts on this topic and why you would recommend keeping them or eliminating them.
10/15/2023
Our bank recently added an Equipment Finance division and I am wondering if an Adverse Action Notice needs to be sent either to the vendor or the business working with the vendor applying for credit?
09/17/2023
We had an auditor tell us that we needed to get the signers of an LLC to initial the "Joint Application for Credit" where the LLC is the only borrower. We disagree with that. There should not be a Joint Application for Credit for this loan. Has anyone else had this problem? What's the best way to handle the auditor and the loan?
07/23/2023
Pertaining to large corporate secondary market participation / syndication loan questions: What time frames, waivers, or legal letters are reasonable / acceptable regarding BSA compliance, specifically, CIP and CDD Beneficial Ownership Forms, when purchasing a share of a large corporate (not consumer or mortgage loans) participation / syndication loan a few years after its origination (secondary market)?
For example: Purchasing a 3.7% share ($20 million) in an existing ($550 million originally) syndicated corporate (not consumer or mortgage loans) secured term loan for publicly traded and non-publicly traded corporations. The loans are purchased in the secondary market through attorneys and agented by global investment banks such as Credit Suisse Group AG. Some syndicated loans have more than 80 borrowers with more than 100 banks that participate in the loan. Further, our bank is not a Legal Bank of Record for the loan until our initial Funding Date (years after the loan originated) and therefore we cannot request and are not provided with any BSA required documentation such as Beneficial Ownership Forms, and CIP Documents for numerous borrowers, or non-BSA documentation such as Organization Documents, prior to the Funding Date. Typically, it takes 90+ days to receive Beneficial Ownership Forms, CIP information, etc., after the Funding Date, and in some instances, we aren’t provided with some requested documentation at all.
What are reasonable / acceptable timeframes for collection of Beneficial Ownership Forms, CIP, etc. that we can specify in our BSA Policy for these specific syndication loans? Is 90 – 180 days acceptable? If we specify a shorter timeframe we would constantly be up against the due dates, or past due, causing BSA policy exceptions / violations, which we want to avoid. Is it acceptable to obtain only the main borrower’s Beneficial Ownership Forms and CIP?
Alternatively, is it acceptable to create and utilize a standard legal letter signed / certified by the agent bank or attorney that managed the transaction stating that they have in their possession, and thoroughly reviewed for adherence to Regulatory Requirements, specific documents, and information, such as CIP for guarantors, Beneficial Ownership documents, or other BSA or Compliance related documents? Additionally, the legal letter would include a statement that they agree to provide documents or information should the need arise for audit or examination purposes or in the event of a triggering event when the bank would be required to complete enhanced due diligence. Would we be subject to regulatory criticism in either of those processes?