For TRID purposes, when we receive a Preliminary Title CD from a Title Company and it has seller-paid fees on it, do we have to disclose the seller-paid fees to the borrower on our CD or can we leave these seller-paid fees off of the CD we give the borrower?
Even though you are able to give separate CDs to the borrower and seller, seller-paid loan costs are required, per the guidance, to be disclosed on the CD that you give the borrower.
CFPB, TILA/RESPA Small Entity Compliance Guide, p. 80:
“Seller-paid Loan Costs and Other Costs are required to be disclosed on the consumer’s Closing Disclosure, regardless of whether a separate Closing Disclosure is provided to the seller. Seller-paid real estate commissions are one example of seller-paid costs that may not be omitted from and must be included on the consumer’s Closing Disclosure. (§ 1026.38(g)(4); Comment 38(g)(4)-4).”
We have a new teller machine that we are about to make available for use. It is a virtual teller machine (VTM) where customers will be able to access a teller via video chat. The debit card would only be used for identification purposes, if at all. Sometimes, they can just verify their identity through the video chat, though. Do the Reg. E error procedure rules apply?
Not necessarily – no. For the rules to apply, there would need to be an electronic fund transfer (EFT). In order for there to be an EFT, in the situation of a VTM, there would need to be an electronic terminal, telephone, computer, or magnetic tape. Although, this is not a totally settled point in the law, it is our interpretation that a VTM would not fall under the definition of “electronic terminal” nor “computer” for purposes of Reg. E. Further, the official commentary to Reg. E expressly excludes teller operated machines where an access device is used for ID purposes only as an “EFT.” So, there would be no EFT in this situation of a VTM. Thus, because the error resolution procedures of Reg. E (§ 1005.11) apply to EFTs, the rules encapsulated in § 1005.11 do not apply.
12 CFR § 1005.11(a)(1):
“(a) Definition of error.
(1) TYPES OF TRANSFERS OR INQUIRIES COVERED.
(i) An unauthorized electronic fund transfer;
(ii) An incorrect electronic fund transfer to or from the consumer's account;
(iii) The omission of an electronic fund transfer from a periodic statement;
(iv) A computational or bookkeeping error made by the financial institution relating to an electronic fund transfer;
(v) The consumer's receipt of an incorrect amount of money from an electronic terminal;
(vi) An electronic fund transfer not identified in accordance with § 1005.9 or § 1005.10(a); or
(vii) The consumer's request for documentation required by § 1005.9 or § 1005.10(a) or for additional information or clarification concerning an electronic fund transfer, including a request the consumer makes to determine whether an error exists under paragraphs (a)(1)(i) through (vi) of this section.”
12 CFR § 1005.3(b)(1):
The term “electronic fund transfer” means any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account. The term includes, but is not limited to: …”
12 CFR § 1005.2(h)-3:
“A terminal or other computer equipment operated by an employee of a financial institution is not an electronic terminal for purposes of the regulation. However, transfers initiated at such terminals by means of a consumer's access device (using the consumer's PIN, for example) are EFTs and are subject to other requirements of the regulation. If an access device is used only for identification purposes or for determining the account balance, the transfers are not EFTs for purposes of the regulation.”
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.
Compliance Alliance offers a comprehensive suite of compliance management solutions.
To learn how to put them to work for your bank, call (888) 353-3933 or email firstname.lastname@example.org.