We do business in a state with dower rights. I just want to make sure that a spouse who is not on the title to real estate but uses the home as a primary residence does not receive the right to rescind—is this correct?
That is correct. For purposes of the rescission rules, dower does not constitute an ownership interest.
An ownership interest does not include, for example, leaseholds or inchoate rights, such as dower.
Comment 2 to §1026.2(a)(11): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/2/#2-a-11-Interp-2
We have a loan application which will be secured by our borrowers’ primary residence. It will additionally be secured by 40 acres of agricultural real estate that is owned by one of the borrowers’ father. My question is, do I have to provide a copy of the Loan Estimate to the father who is only pledging security?
There is not a requirement to give a copy of the Loan Estimate to the father in this case, under the TRID requirements. If the loan is subject to the right of rescission, the bank would need to give a Closing Disclosure to anyone with the right to rescind though, which may include the father. As always, be sure to check any internal policy requirements or investor guidelines, if applicable, since these often include additional disclosure requirements.
…When two consumers are joint obligors with primary liability on an obligation, the early disclosures required by § 1026.19(a), (e), or (g), as applicable, may be provided to any one of them. In rescindable transactions, the disclosures required by § 1026.19(f) must be given separately to each consumer who has the right to rescind under § 1026.23. In transactions that are not rescindable, the disclosures required by § 1026.19(f) may be provided to any consumer with primary liability on the obligation. …
We send disclosures electronically and can be notified when the borrower has not accessed them by the Loan Estimate (LE) due date. Are we required to mail the disclosures on that day if the borrower hasn’t accessed the electronic docs? They are telling us they are having a problem once we are past the LE due date so we are mailing them then but it is past the due date. If our system logs that we sent it by the due date and the borrower had e-consented, are we okay?
The customer is considered to have received the LE three business days after the bank sends it, even if the customer has not opened it. There is not a regulatory requirement to then send the disclosures in paper form as well. However, doing so may be required under the bank's internal policy, or an investor's guidelines (if applicable).
2. Electronic delivery. The three-business-day period provided in § 1026.19(e)(1)(iv) applies to methods of electronic delivery, such as email. For example, if a creditor sends the disclosures required under § 1026.19(e) via email on Monday, pursuant to § 1026.19(e)(1)(iv) the consumer is considered to have received the disclosures on Thursday, three business days later.
Is an "assumed" loan HMDA reportable? There was only one borrower when the loan was originated (not this year) and the loan was reported in that year. The Bank has now allowed another borrower to assume the note from the original borrower.
Yes, it would be when the bank enters into a written agreement accepting a new borrower in place of an existing borrower, even if the bank does not create a new obligation.
i. Assumptions. For purposes of Regulation C, an assumption is a transaction in which an institution enters into a written agreement accepting a new borrower in place of an existing borrower as the obligor on an existing debt obligation. For purposes of Regulation C, assumptions include successor-in-interest transactions, in which an individual succeeds the prior owner as the property owner and then assumes the existing debt secured by the property. Under § 1003.2(d), assumptions are extensions of credit even if the new borrower merely assumes the existing debt obligation and no new debt obligation is created. See also comment 2(j)-5.
Comment 2 to §1003.2(d)(2)(i): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/Interp-2/#2-d-Interp-2-i
First, the HMDA Rule maintains Regulation C’s coverage of loan assumptions, even if no new debt obligation is created. A loan assumption is a transaction in which a Financial Institution enters into a written agreement accepting a new borrower in place of an existing borrower as the obligor on an existing debt obligation. The HMDA Rule clarifies that, under Regulation C, assumptions include successor-in-interest transactions in which an individual succeeds the prior owner as the property owner and then assumes the existing debt secured by the property. Assumptions are extensions of credit under the HMDA Rule even if the new borrower merely assumes the existing debt obligation and no new debt obligation is created. Comment 2(d)-2.i.
HMDA Small Entity Compliance Guide, p. 32: https://files.consumerfinance.gov/f/documents/cfpb_2018-hmda_small-entity-compliance-guide_stickered.pdf
Can you clarify all of the documents that the Board of Directors is required to review prior to approving the BSA/AML Policy? Does the BOD need to review the Policy, Risk Assessment and Procedures as a total program review?
Because procedures and policies are components of the BSA/AML compliance program, conservatively, the Board of Directors should be approving both of them. Additionally, even though it is not explicitly required, because of how broad the requirement is and in the spirit of keeping the board informed, we have members who also obtain board approval for the risk assessment component.
(b) Establishment of BSA compliance program—(1) Program requirement. Each bank shall develop and provide for the continued administration of a program reasonably designed to ensure and monitor compliance with the recordkeeping and reporting requirements set forth in subchapter II of chapter 53 of title 31, United States Code, the Bank Secrecy Act, and the implementing regulations promulgated thereunder by the Department of the Treasury at 31 CFR part 103. The compliance program shall be reduced to writing, approved by the board of directors, and noted in the minutes.
§ 208.63: https://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&sid=512f235ab20bd5823c2a3d1bfdb1c168&rgn=div8&view=text&node=12:22.214.171.124.126.96.36.199&idno=12
The BSA/AML compliance program must be written, approved by the board of directors, and noted in the board minutes. A bank must have a BSA/AML compliance program commensurate with its respective BSA/AML risk profile. Refer to the core overview section, "BSA/AML Risk Assessment," page 18, for additional guidance on developing a BSA/AML risk assessment. Refer to Appendix I (“Risk Assessment Link to the BSA/AML Compliance Program") for a chart depicting the risk assessment’s link to the BSA/AML compliance program. Furthermore, the BSA/AML compliance program must be fully implemented and reasonably designed to meet the BSA requirements.32 Policy statements alone are not sufficient; practices must coincide with the bank’s written policies, procedures, and processes. The BSA/AML compliance program must provide for the following minimum requirements:
· A system of internal controls to ensure ongoing compliance.
· Independent testing of BSA/AML compliance.
· Designate an individual or individuals responsible for managing BSA compliance (BSA compliance officer).
· Training for appropriate personnel.
BSA/AML Manual: https://www.compliancealliance.com/find-a-tool/tool/regulatory-policy-and-training-requirements
We were written up for the initial CD being sent via e-disclosure to a borrower that did not have E-SIGN consent. I am saying that sending via email was not an option for the borrower. Is this correct? I did just look at the file and both borrowers did end up wet signing, but at the time of my review it only showed that it was sent via e-disclosure
Assuming the transaction is not rescindable, the CD can be provided to any consumer primarily liable on the obligation. As far as E-SIGN consent goes, the CD can be provided electronically as long as the bank has obtained E-SIGN consent from the consumer. From what you describe, it appears that E-SIGN consent was not obtained from the borrower prior to providing the CD electronically to the borrower, which would not have satisfied the disclosure provision requirements under TRID. However, the versions provided in person may have met these requirements as long as the bank can show these were actually received at least three business days before closing.
If there is more than one consumer, the disclosures may be made to any consumer who is primarily liable on the obligation. If the transaction is rescindable under § 1026.23, however, the disclosures shall be made to each consumer who has the right to rescind.
12 CFR § 1026.17(d): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/17/#d
In a transaction subject to paragraph (e)(1)(i) of this section, the creditor shall provide the consumer with the disclosures required under § 1026.38 reflecting the actual terms of the transaction.
12 CFR § 1026.19(f)(1)(i): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/19/#f-1-i
The disclosures required by this section may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the Electronic Signatures in Global and National Commerce Act (15 U.S.C. 7001 et seq.).
12 CFR § 1026.38(t)(3)(iii): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/38/#t-3-iii
So I am aware of the two walls and a roof requirement in the flood regulations, but what if the building is on a dirt floor but secured to the ground with concreted post? Because there is no floor, does that negate the requirement for flood coverage?
Unfortunately, a floor is not a requirement for it to be considered a building requiring flood coverage. Assuming the other conditions of the definition have otherwise been met, flood insurance would still be required in this case.
A structure with 2 or more outside rigid walls and a fully secured roof, that is affixed to a permanent site;...
For HMDA reporting, the purpose is to construct 45 additional apartment units but collateral is existing 68 unit apartment complex and land where borrower will build the additional units. The payment terms are 24 payments of interest only thru 3/15/21 then payments of P & I starting 4/15/21 amortized over 25 years. Would it be considered a construction loan and not reportable or construction to perm all in one and reportable?
If you are doing the construction to perm, then it would be reportable unless otherwise excluded. If you are doing construction-only, which is planned to be taken out by another loan, it is temporary financing and not HMDA reportable.
Section 1003.3(c)(3) provides that closed-end mortgage loans or open-end lines of credit obtained for temporary financing are excluded transactions. A loan or line of credit is considered temporary financing and excluded under § 1003.3(c)(3) if the loan or line of credit is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time.
Comment 1 to §1003.3(c)(3): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/3/#3-c-3-Interp-1
What are the risks/concerns to the Bank if we allow a customer to view multiple accounts under the same log in in our Online Banking? The customer would have “View Only” access to these accounts. The accounts are a mix of Business accounts (LLCs, Partnerships, Sole Proprietorships, etc.) and personal accounts. Would this be a risk based decision, or is there regulations against it?
This is a risk-based decision. It is generally not considered best practice, except for sole proprietorships. Some banks do allow "view only" so that the customers can at least see everything in one place but do not allow the customer to transfer funds. Allowing transferring of funds would run the risk of commingling funds, possible tax fraud, etc. When there are multiple owners, it could cause issues if one owner is transferring money out to their personal account. Although that is ultimately the responsibility of the owners and not the bank, the bank may still be involved if a dispute were to come up.
I have a commercial loan for the refinance of his office and warehouse. The office is actually an old home though. Am I correct that this is not HMDA since it's not occupied as a home?
If the structure has been converted to a commercial office, it is no longer considered a dwelling and, thus, the loan is outside the scope of HMDA, if no other dwelling secures the loan.
Exclusions. Recreational vehicles, including boats, campers, travel trailers, and park model recreational vehicles, are not considered dwellings for purposes of § 1003.2(f), regardless of whether they are used as residences. Houseboats, floating homes, and mobile homes constructed before June 15, 1976, are also excluded, regardless of whether they are used as residences. Also excluded are transitory residences such as hotels, hospitals, college dormitories, and recreational vehicle parks, and structures originally designed as dwellings but used exclusively for commercial purposes, such as homes converted to daycare facilities or professional offices.
Comment 3 to §1003.2(f)(3): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/2/#2-f-Interp-3
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