The credit reports we use are through the company Factual Data. This company retrieves the information from Equifax and on our tri-merge requests, retrieves from all 3 consumer reporting agencies. We have been putting on the denial letters the address and phone numbers of the consumer reporting agencies for the person to contact. Factual Data did a review of our procedures and is saying that it should be their name and address on the denial letters since they furnished the report. I want to verify that changing to their name, address and # only would be correct.
To be most conservative, we would agree and recommend including Factual Data on the Adverse Action Notice, including their name, address, and phone number.
There is currently a debate in the industry, including with examiners, regarding whether tri-merge companies are considered a credit reporting agency. If they are, it would be recommended that they are disclosed on the Adverse Action Notice.
15 USC 1681a(p)
"The term “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis” means a consumer reporting agency that regularly engages in the practice of assembling or evaluating, and maintaining, for the purpose of furnishing consumer reports to third parties bearing on a consumer’s credit worthiness, credit standing, or credit capacity, each of the following regarding consumers residing nationwide: (1) Public record information. (2) Credit account information from persons who furnish that information regularly and in the ordinary course of business."
"Multiple credit scores. 28 In certain cases, a person may receive multiple credit scores from consumer reporting agencies. If the person only uses one credit score in making the decision, that particular score and related information for that specific credit score must be disclosed. If the person uses multiple credit scores in making the credit decision, only one of the scores is required to be disclosed; however, the FCRA does not prohibit creditors from disclosing multiple credit scores to the consumer."
My financial institution is looking at a participation to purchase. We haven’t done this in a long time, especially after the beneficial ownership rule has been effective. The borrowing entity is an LTD partnership. As only the participant, what do we need to collect for beneficial ownership?
Participation loans are technically exempt from the Beneficial Owner rule. The bank should obtain, however, some type of certification or assurance that the originating bank collected the beneficial owner information.
2. Are loan participations purchased from third parties and loans purchased from a car
dealer or mortgage broker within the exclusion from the definition of “account” for loans
acquired through an acquisition, merger, purchase of assets, or assumption of liabilities?
Yes, this exclusion is intended to cover loan participations purchased from third parties and loans
purchased from a car dealer or mortgage broker. If, however, the bank is extending credit to the
borrower using a car dealer or mortgage broker as its agent, then it must ensure that the dealer or
broker is performing the bank’s CIP.
PAGE 2: https://www.fincen.gov/sites/default/files/guidance/finalciprule.pdf
If it is in our loan policy not to use the credit score to base our credit decision on, but we do pull the real estate credit report for the disclosures. We don’t need to report the credit score on the HMDA LAR since we do not rely on the score to make a decision, correct?
Yes, that's correct - if the credit score wasn't relied on in making the credit decision, you're not required to report it for HMDA purposes, even if the credit report was pulled.
TRANSACTIONS FOR WHICH NO CREDIT SCORE WAS RELIED ON.
If a financial institution makes a credit decision without relying on a credit score for the applicant or borrower, the financial institution complies with § 1003.4(a)(15) by reporting that the requirement is not applicable.
Comment 5 to 1003.4(a)(15): https://www.consumerfinance.gov/eregulations/1003-Subpart-Interp/2017-18284_20180101#1003-4-a-15-Interp-5
We have a property that we are financing the purchase of. The flood determination came back and the house is not in a flood zone, but the deck that is attached to the house is in the flood zone. Is the property subject to the flood insurance requirements even though only the deck is in the flood zone?
Yes – the property is subject to the flood insurance regulations. This is because even if one piece of the building that the bank is taking as security is in the flood zone, then the entire structure should be covered by flood insurance. Now, if the deck was detached from the house, then flood insurance would not be required. However, here, the deck is attached and in a flood zone. Thus, the entire house needs to be covered by the requisite amount of flood insurance.
12 CFR § 339.3(a):
“(a) In general. An FDIC-supervised institution shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan.”
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