- This topic has 1 reply, 2 voices, and was last updated 10 years, 6 months ago by
.
-
Posts
-
Does the new periodic statement rule apply to consumer dwelling construction loans? I am referring to loans that are only to construct the dwelling and the terms are interest only monthly for the draw period, they are for a line limit, and funds are drawn as needed, but the line does not revolve, once funds are drawn, even if paid back those funds cannot be drawn again. When it matures, the loan is either renewed by us through a completely new loan as permanent financing, or permanently financed elsewhere.
The periodic statement rule applies to closed-end loans, so I guess I am really double checking that these initial constructioni loans without permanent financing would be considered open-end and not required to receive a periodic statement.
“once funds are drawn, even if paid back those funds cannot be drawn again.”
This is closed end credit and the periodic statement rules in 1026.41 would apply. The CFPB’s Small Entity Compliance Guide has a table that clearly breaks down exemptions. You can find it here: https://files.consumerfinance.gov/f/201401_cfpb_small-entity-compliance-guide_tila-respa.pdf
*****
Jack’s Compliance Resource offers policy and procedure updates, risk assessments, training manuals, Director/Senior Management Updates, checklists, flowcharts and much more. To access our Marketplace click here: https://mycomplianceresource.com/compliance-marketplace/.
- You must be logged in to reply to this topic.