Is a volunteer fire department fully exempt from obtaining beneficial ownership or would it require just the Control prong?
It depends on whether the fire department is a government entity or a non-profit. Governmental units are entities set up by federal, state, or local law.
If the fire department is a government entity, then it would be exempt under 31 CFR 1010.230(e)(2).
"(2) Legal entity customer does not include:
(i) A financial institution regulated by a Federal functional regulator or a bank regulated by a State bank regulator;
(ii) A person described in §1020.315(b)(2) through (5) of this chapter;"
And 1020.315(b)(2) states:
"b) Exempt person. For purposes of this section, an exempt person is:
(1) A bank, to the extent of such bank's domestic operations;
(2) A department or agency of the United States, of any State, or of any political subdivision of any State;
(3) Any entity established under the laws of the United States, of any State, or of any political subdivision of any State, or under an interstate compact between two or more States, that exercises governmental authority on behalf of the United States or any such State or political subdivision;"
If instead, the fire department is a non-profit, then it would be subject to only the control prong under 31 CFR 1010.230(e)(3).
"(3) The following legal entity customers are subject only to the control prong of the beneficial ownership requirement:
(i) A pooled investment vehicle that is operated or advised by a financial institution not excluded under paragraph (e)(2) of this section; and
(ii) Any legal entity that is established as a nonprofit corporation or similar entity and has filed its organizational documents with the appropriate State authority as necessary."
Is a loan for a “flipper” property subject to HMDA? This would be a short-term loan to purchase an existing property, renovate it, and then completely pay off the loan with the proceeds of the sale.
Although the loan may be short-term, if it is for the purpose of renovating an existing home (as opposed to constructing a new home), and if it is not intended to be replaced with later financing, then it would be reportable for HMDA purposes.
Do we collect the Government Monitoring Information for a temporary construction loan where the loan purpose was to purchase a lot and construct home?
As long as both the lot purchase money and the construction money will be permanently financed with a later loan, the entire loan is considered “temporary financing,” and therefore Government Monitoring Information should not be collected.
Is the bank required to provide an appraisal notice when it takes real estate as an abundance of caution?
If a loan is secured by a dwelling, the appraisal notice is required. If the dwelling is an abundance of caution, an appraisal itself, however, would not be required. Abundance of caution specifically exempts the lender from hanging to get an appraisal, as long as it is a true abundance of caution. The bank should not invoke this exemption if its credit analysis reveals that the transaction would not be adequately secured by sources of repayment other than the real estate, even if the contributory value of the real estate collateral is low relative to the entire collateral pool and other repayment sources.
See Appendix A in the Interagency Appraisal and Evaluation Guidelines here: https://www.fdic.gov/regulations/laws/rules/5000-4800.html
I have a question in regards to the matricula consular identification. This is a form of ID given by the Mexican government. Is this form of ID acceptable for CIP purposes in opening a new account?
The CIP rule neither endorses nor prohibits bank acceptance of information from Matricula IDs. Instead, a bank must decide for itself, based upon appropriate risk factors, whether the information presented by a customer is reliable. The CIP rules simply permit use of "any other government-issued document evidencing nationality or residence and bearing a photograph or similar safeguard." https://www.ffiec.gov/bsa_aml_infobase/pages_manual/olm_011.htm
However, some banks refuse to accept this form of ID, because they believe it's too hard to verify the legitimacy of these cards. If your bank decides to accept this form of ID, you may still want a secondary source of ID if you have reason to doubt the authenticity of the card.
If the bank takes a property into Other Real Estate Owned, must the bank buy/ maintain flood insurance on the property?
For risk management and safety and soundness purposes, a bank with other real estate owned (OREO) in flood hazard areas should purchase flood insurance policies on its OREO property. However, it is not required to do so by regulation.
Other Real Estate Owned— An institution with other real estate owned (OREO) in SFHAs should, as a
prudent practice, purchase flood insurance policies on its OREO property, although it is not required to do so by the regulations.
We used to say if the funds were improving the commercial part of the building with no benefit to the dwelling it was not reportable--in 2018 is a loan for improving a veterinary clinic that is under the same roof as an individual’s home reportable?
For mixed-use buildings, the closed-end mortgage loan would be reportable if the proceeds go toward either:
1. improving the whole property, or
2. primarily improving the residential portion of the property.
For example, if the loan were to replace the A/C for the whole building, or replace the floors on the residential side, then it would be reportable:
A closed-end mortgage loan or an open-end line of credit to improve a multifamily dwelling used for residential and commercial purposes (for example, a building containing apartment units and retail space), or the real property on which such a dwelling is located, is a home improvement loan if the loan's proceeds are used either to improve the entire property (for example, to replace the heating system), or if the proceeds are used primarily to improve the residential portion of the property. An institution may use any reasonable standard to determine the primary use of the loan proceeds. An institution may select the standard to apply on a case-by-case basis. See comment 3(c)(10)-3.ii for guidance on loans to improve primarily the commercial portion of a dwelling other than a multifamily dwelling.
I have a loan for $200,000 to purchase a principal dwelling. It is unsecured. Do I need a TIL, or since it's out of the threshold, is it exempt from the regulations?
Because the loan is not secured by real property and is over the current Regulation Z threshold of $55,800, it is exempt from Regulation Z, meaning no TRID or TIL forms would be required. Additionally, the loan would be exempt from RESPA and HMDA because it is unsecured. Keep in mind, however, that you will still need to abide by safety and soundness concerns, the bank’s underwriting policy, and any other statutory or regulatory concerns that might apply (ECOA/fair lending, FCRA, e-SIGN, state law, etc.)
If a customer completes a Certification of Beneficial Owners form for a DDA account and opens a Loan on the same day, may one form be used or should we have a form completed for each account?
You may use one form in this case since you have obtained a certification form--as long as the information is accurate and up-to-date (assuming yes since same day).
"If a legal entity customer opens multiple accounts at a covered financial institution
(whether or not simultaneously), must the financial institution identify and verify
the customer’s beneficial ownership for each account?
A. Generally, covered financial institutions must identify and verify the legal entity
customer’s beneficial ownership information for each new account opening,
regardless of the number of accounts opened or over a specific period of time.
However, an institution that has already obtained a Certification Form (or its
equivalent) for the beneficial owner(s) of the legal entity customer may rely on
that information to fulfill the beneficial ownership requirement for subsequent
accounts, provided the customer certifies or confirms (verbally or in writing) that
such information is up-to-date and accurate at the time each subsequent account
is opened and the financial institution has no knowledge of facts that would
reasonably call into question the reliability of such information. The institution
would also need to maintain a record of such certification or confirmation,
including for both verbal and written confirmations by the customer."
Our bank's website has been “spoofed” by a foreign website. The foreign website has a different but very similar URL and content almost identical to our site. Do you have any tips on what steps we should take?
In addition to following your regular BSA/AML policies and procedures, we recommend contacting your federal regulator, and your state's cybercrimes unit or Attorney General as soon as possible. We also recommend adding a “pop-up” or greeting page on your own website that explains the issue to your online visitors, and keeping it up until the fake site is removed. Furthermore, consider sending out a warning e-mail to at least all your online banking customers--if not all your customers--notifying them of the issue.