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
The private flood insurance regulations have a provision requiring an insured to file suit not later than one year after the date of a written denial for all or part of a claim under a policy, but the policy we’re looking at does not contain this provision. Is this policy acceptable if it meets the other criteria?
Unfortunately, it does have to have the provision regarding filing suit no later than 1 year.
The bank may still be able to accept it under discretionary acceptance provisions though.
Commenters asserted that the section of the proposed definition stating that a policy must require an insured to file suit not later than one year after the date of a written denial of all or part of a claim under the policy would disqualify private policies with different or no statutes of limitations. However, this provision also is part of the statutory definition, and, therefore, the Agencies are retaining it in the final rule.
You can also find that in our checklist:
I noticed that a lot of banks no longer hand out the substitute check consumer awareness disclosure. Was the requirement to disclose this information revised as part of the regulation CC amendments?
The likely reason that you are seeing fewer of these disclosures going out is that the notice is only required when you are actually providing substitute checks back with the periodic statements. If you are only providing photocopy images, and not actual substitute checks, then the notice is not necessary.
Some of the financial institution’s customers get their checks back and some don’t (they get an imaged statement or just the statement). Do they all have to get the initial consumer awareness disclosure?
No. Only the institution’s consumer customers who receive paid checks or substitute checks along with their periodic account statements are required to get the notice. Any new consumer customers, who will get paid original or paid substitute checks back in their periodic statement, must get the notice at the time the consumer relationship is established.
Consumer Compliance FAQ for Check Clearing for the 21st Century Act (Check 21) and the Implementing Regulation (12 CFR 229); Question 19: https://www.ffiec.gov/exam/check21/faq.htm
This is regarding the recent threshold changes to Regulation CC. Since we have same day availability and the amounts are actually in the customers’ favor, do we have to do a change notice to reflect the new funds availability thresholds?
Yes, it would still be required to be updated and provided within 30 days of the change as set out here:
(e) Changes in policy. A bank shall send a notice to holders of consumer accounts at least 30 days before implementing a change to the bank's availability policy regarding such accounts, except that a change that expedites the availability of funds may be disclosed not later than 30 days after implementation.
If a consumer is disputing a POS transaction and it is not fraud (i.e. merchandise never received, service canceled and company debited account or any other reason than a fraud transaction), are we required under Reg. E to give provisional credit while we complete our investigation?
As the customer has asserted that an error took place, you are required to conduct an investigation. Subject to certain limitations, if the investigation takes more than 10 days, you have to issue a provisional credit to the customer’s account. If your investigation reveals that the customer authorized the transaction in the amount transferred, then it would not be a Reg. E error. At that point, you need to provide a written explanation of the results of your investigation and debit any provisional credit.
The term “error” means:
(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.
§ 1005.11(a): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1005/11/#a
In addition to following the procedures specified in paragraph (c) of this section, the financial institution shall follow the procedures set forth in this paragraph (d) if it determines that no error occurred or that an error occurred in a manner or amount different from that described by the consumer:
(1) Written explanation. The institution's report of the results of its investigation shall include a written explanation of the institution's findings and shall note the consumer's right to request the documents that the institution relied on in making its determination. Upon request, the institution shall promptly provide copies of the documents.
(2) Debiting provisional credit. Upon debiting a provisionally credited amount, the financial institution shall:
(i) Notify the consumer of the date and amount of the debiting;
(ii) Notify the consumer that the institution will honor checks, drafts, or similar instruments payable to third parties and preauthorized transfers from the consumer's account (without charge to the consumer as a result of an overdraft) for five business days after the notification. The institution shall honor items as specified in the notice, but need honor only items that it would have paid if the provisionally credited funds had not been debited.
§ 1005.11(d): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1005/11/#d
I’m being told we can opt people in for overdraft protection. Is that true?
Reg. E sets out the requirements for providing customers with overdraft services for paying an ATM or a one-time debit card transaction. Under the Reg. E requirements, before the bank can assess an overdraft fee for paying an ATM or one-time debit card transaction, the customer must affirmatively consent to such coverage. This does not mean that the bank cannot pay the overdraft item, it merely means that without the customer’s affirmative consent, the bank may not assess an overdraft fee for paying those items.
(b) Opt-in requirement --
(1) General. Except as provided under paragraph (c) of this section, a financial institution holding a consumer's account shall not assess a fee or charge on a consumer's account for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service, unless the institution:
(iii) Obtains the consumer's affirmative consent, or opt-in, to the institution's payment of ATM or one-time debit card transactions; and
§ 1005.17(b)(1)(iii): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1005/17/#b-1-iii
(2) Conditioning payment of other overdrafts on consumer's affirmative consent. A financial institution shall not:
(i) Condition the payment of any overdrafts for checks, ACH transactions, and other types of transactions on the consumer affirmatively consenting to the institution's payment of ATM and one-time debit card transactions pursuant to the institution's overdraft service….
§ 1005.17(b)(2)(i): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1005/17/#b-2-i
We are moving to a new ChexSystem benefit whereby the credit score will be provided to us. However, we will not use the score in making the determination to deny an account opening. Since we are not using it, do we have to include the additional credit score disclosures?
If you did not use a credit score in your decision, then there is no technical need to add include the additional disclosures. However, the issue comes in the form of showing that the bank did not actually use the score. So, if the bank does choose not to utilize the credit score disclosures, then it needs to thoroughly document that fact.
Section 1100F of the Dodd-Frank Act amended the FCRA to include additional disclosure requirements when adverse action is taken because of the consumer’s credit score. ... But if the credit score did not play a role in the decision to take adverse action, these disclosures are not required.
Fed. Res., Consumer Compliance Outlook, Adverse Action Notice Requirements Under the ECOA and the FCRA: https://consumercomplianceoutlook.org/2013/second-quarter/adverse-action-notice-requirements-under-ecoa-fcra/
I have a list of reasons for denial on a loan, but is there a separate list of reasons for denying a deposit that are standard reasons?
Answer: Unfortunately, there is not a model list of reasons for deposit accounts. The bank may be able to modify some of the reasons in the model forms for credit accounts though, and you can find those in Regulation B here:
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