[Brent V]

Annmichele,

You should already have our Providing Accurate and Timely Adverse Action Notices training manual in your possession. If you prefer, it can be downloaded here https://jackscompliance.s3.amazonaws.com/woocommerce_uploads/2020/12/CRLW-Providing-Accurate-and-Timely-Adverse-Action-Notices-12.01.20-bp1ra4.pdf

You’ll find the information you need in the last block on page 12 and the first block on page 13.

[Brent V]

Without more details it is difficult to reach a conclusion. If we understand your question, the new loan product will have a minimum loan amount of around $500,000. The product raises CRA issues since the fixed-rate product will not be available for low- to moderate-income borrowers. It also raises fair lending issues if demographic data shows that low- and moderate-income individuals in your area are minorities.

[Brent V]

Then regardless of where the invoice or payment was sent, it all falls within the bank. It should be shown on the closing disclosure as paid before closing.

[Brent V]

Could you clarify if the secondary market mortgage department is simply another department within your bank or a separate legal entity? If it is another department within your bank then the loan was originated by the bank, the appraisal invoice was sent to the bank, and the customer made payment to the bank. It should be shown on your CD as paid before closing. If the mortgage department is another legal entity then that is another ball of wax.

[Brent V]

I believe that the bank should pay the penalty. It’s a best practice to have the tax bills sent to the bank that will be making the payment on the tax bill from escrow. I understand this is easier said than done in some places, but if it is possible, it’s highly recommended this be implemented at the bank. We assume that you took all three tracts as collateral on the loan. In that case, the bank should be aware that payments were made on two tracts with a third outstanding. In the event that you only have two of the three tracts as collateral, you wouldn’t be required to pay this outstanding bill at all.

[Brent V]

Gwen,

I apologize for the delay. This issue has never been clear.

Logic says an “agent” is a party that represents the bank in a closing, and that a bank cannot be its own agent. But the CFPB has stated, informally, that a bank conducting settlement should be listed as the settlement agent. In our opinion listing the bank as settlement agent is illogical. The regulation does not require the disclosure, nor does it prohibit the disclosure. Showing the bank as a settlement agent is, in our opinion, not likely to be cited as a violation.

[Brent V]

Your disclosure should state the minimum requirements as opposed to a link to the vendor’s website. Having the minimum requirements listed on your site can serve as documentation that the specifications were provided at that point in time, which will help you determine if there is a change in the future that needs to be redisclosed. Putting the burden on the customer to continuously check for updates to the requirements opposed to redisclosing is not notifying the borrower of changes in software/hardware requirements as required by ESIGN.

[Brent V]

Kathy, I’m not aware of specific definitions for loan or deposit add-on products. The CFPB defines Credit card “add-on products,” as additional, optional services. You don’t have to buy these or other extra products or services from the credit card company to activate your credit card. This generic definition could be modified to fit deposit or loan products.

Additionally, here is some guidance on marketing add-on products: https://files.consumerfinance.gov/f/201207_cfpb_marketing_of_credit_card_addon_products.pdf

[Brent V]

Based on the E-SIGN Act, you must “describe the procedures the consumer must use to withdraw consent and to update information needed to contact the consumer electronically”. It does not spell out what those procedures must be. While technically sufficient, it is the industry standard to provide a phone number that the consumer can utilize to contact you about their consent. It’s never a great idea to place extra hurdles in front of the customer on something that could result in a violation. Providing all of the info the consumer needs to follow through on the procedures will never been deemed a bad thing. Is there a reason that you are hesitant to provide them with a phone number to call?

[Brent V]

Since it is a part of the application and includes information about them and their specific loan request, it should be provided to them and probably explained as well. It’s not spelled out anywhere, but some of the info overlaps with TRID info and needs to match in order to avoid any UDAP/UDAAP concerns.

[Brent V]

Thanks for attending our TRID program back in 2015. There have literally been thousands of pages of revisions since then. It may be time to attend a TRID update program.

Intentionally delaying a disclosure because you don’t accept information from the applicant is both a TRID violation and a Unfair, Deceptive or Abusive Act or Practice.

You do not have an application until the borrower submits all six items. If the borrower gives you a social security number, orally or in writing, you have that item even though you may not want it.

If you have the other five items, but lack the address of the property, then you do not have an application. This was covered in FAQs released by the CFPB in 2019

We currently half way through our Total TRID Training four-part webinar series. Parts 1 and 2 are available via recording with the purchase of the bundle https://mycomplianceresource.com/event-registration/?ee=487

[Brent V]

I need some additional information in order to accurately respond to your question. Was the “excessive credit use – meaning they owe more than the allowable threshold of 75%” one of the four key factors that affected the credit score? If so, it must be listed. ..in Part II of the form.

Additionally, if it is the sole reason for denial it must be listed in Part I (ECOA). None of the options on the model form match “excessive credit use”, so I believe you’d select “other” and write it in the blank.

If the excessive use of credit – 75% allow threshold is not information you received as a key factor from the CRA, as we have assumed, please let us know what the threshold is.

[Brent V]

As defined in the CRA Sunshine Regulations “Covered Agreement” is any contract, arrangement, or
understanding that meets all of the following criteria:

1. The agreement is in writing.
2. The parties to the agreement include:
a. One or more insured depository institutions or affiliates of an insured
depository institution; and
b. One or more NGEPs.
3. The agreement provides for the insured depository institution or any affiliate to:
a. Provide to one or more individuals or entities (whether or not parties to
the agreement) cash payments, grants, or other consideration (except loans)
that have an aggregate value of more than $10,000 in any calendar year; or
b. Make to one or more individuals or entities (whether or not parties to the
agreement) loans that have an aggregate principal amount of more than
$50,000 in any calendar year.
4. The agreement is made pursuant to, or in connection with, the fulfillment of the CRA.
5. The agreement is with a NGEP that has had a CRA communication prior to entering into the agreement.

A “Covered Agreement” does not include:

1. Any individual loan that is secured by real estate; or
2. Any specific contract or commitment for a loan or extension of credit to an individual, business, farm, or other entity, or group of such individuals or entities if:
a. The funds are loaned at rates that are not substantially below market rates;
and
b. The loan application or other loan documentation does not indicate that the
borrower intends or is authorized to use the borrowed funds to make a loan
or extension of credit to one or more third parties.

[Brent V]

There is not a regulation that controls the interest rate you will pay on a deposit account. Some banks negotiate rates for certain (usually high dollar) customers. Also, there isn’t a regulation that would mirror fair lending, but I would argue that you need to apply the same principles and negotiate rates on an equitable basis, regardless of a prohibited basis, due to reputational risk.

There are prohibitions on preferential rates being paid to a director, officer, attorney, or employee. (https://www.law.cornell.edu/uscode/text/12/376).

[Brent V]

Assuming you have complied with the E-SIGN requirements, the same rule would apply for delivering the LE electronically – it would be required to be delivered (i.e. sent in compliance with E-SIGN) no later than 3 business days after application. As with regular mail, if you send the LE via email it is considered received 3 business days after delivery unless you have evidence the consumer received the disclosures earlier.
See 1026.19(e)(1)(iii)-A and (iv).

Also, comment 19(e)(I)(iv)-2 states:
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. The creditor may, alternatively, rely on evidence that the consumer received the emailed disclosures earlier. For example, if the creditor emails the disclosures at 1 p.m. on Tuesday, the consumer emails the creditor with an acknowledgement of receipt of the disclosures at 5 p.m. on the same day, the creditor could demonstrate that the disclosures were received on the same day. Creditors using electronic delivery methods, such as email, must also comply with § 1026.37(o)(3)(iii), which provides that the disclosures in § 1026.37 may be provided to the consumer in electronic form, subject to compliance with the consumer consent and other applicable provisions of the E-Sign Act. For example, if a creditor delivers the disclosures required under § 1026.19(e)(1)(i) to a consumer via email, but the creditor did not obtain the consumer’s consent to receive disclosures via email prior to delivering the disclosures, then the creditor does not comply with § 1026.37(o)(3)(iii), and the creditor does not comply with § 1026.19(e)(1)(i), assuming the disclosures were not provided in a different manner in accordance with the timing requirements of § 1026.19(e)(1)(iii).

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