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A copy of the declarations page of the flood insurance policy is always acceptable. In the past examiners would accept a completed flood insurance application and proof of payment of the flood insurance premium. Recently some examiners have insisted on a copy of the “dec” page.
Regulation C requires that open-end lines of credit and closed-end mortgages loans be reported. Both categories must be secured by a dwelling. The reported loan amount could be 0.00 if the application is denied, withdrawn or closed for incompleteness at an early stage or for a preapproval request.
First calculate the amount of flood insurance that is needed.
Loan Amount $400,243
FEMA Max. $&50,000 (3 residential buildings) to $1.5 million (three non-residential buildings)
Value of the Imp. Information not provided.If the smallest of the three amounts is the loan amount, then insurance of at least $400,243 is needed. You need a policy on each building. The total can be split among the three properties in a variety of ways. The current split appears to comply, but are you satisfied with those amounts? If the third building is worth substantially more than $11,600 I would not be satisfied with that amount of coverage. Since you apparently are in compliance at the moment you have time to work with the borrower to obtain coverage in an amount acceptable to your bank.
It is not completely clear exactly how your transactions are being handled.
In a typical one-time close the note provided at closing covers both the construction and permanent phases of the loan. If your note covers both phases then modification is not needed, unless, for example, the consumer requests a change in terms. The one-time close loan is HMDA reportable. The APR in the Closing Disclosure is used to calculate the rate spread. The loan amount, am type and term are pulled from the same document.
Some lenders provide construction financing and then refinance the construction note into permanent financing. In such a transaction, the construction phase is not HMDA reportable (temporary financing). The refinance transaction is HMDA reportable. The APR in the Closing Disclosure provided for the permanent phase is used to calculate the rate spread. The loan amount, am type and term are pulled from the same document.
Some lenders provide construction financing and then modify the construction note into permanent financing, which is a complicated task to accomplish using a modification agreement. In such a transaction, the construction phase is generally not HMDA reportable (temporary financing). However the planned modification of the construction might mean that the transaction will “automatically convert to perm” and because it is not designed to be replaced by separate permanent financing. In such a case the transaction is not excluded as temporary financing. Such a loan would generally have a balloon payment at the end of the construction term. A modification, which occurs after completion of construction, is not HMDA reportable, since a modification is not a loan. If a new note was used instead of a modification agreement the transaction would be HMDA reportable as a refinance. See the previous paragraph.
Does your original note provide information about the rate and payments due after the construction phase is completed?
The slide you reference indicates, in Footnote 1, that a risk-based pricing notice (RBP) is not required on a denied application. But when an exception notice is used it must be proved within three days of receiving the score. So, unless an adverse action notice is provided with three days, the borrower will receive both the exception notice within three days and the Adverse Action notices within 30 days. If an AAN is given within 3 days of receiving the score, then only the AAN is needed.
Scott’s list of cons includes “The debit card will be a credit card and the account will be regulated by Regulation Z.” This is a big deal, very big deal. Listed below are the sections of Regulation Z that come into play for credit card accounts. The requirements are manageable, but they are a big load.
You don’t want to take on this burden for a handful of accounts. You need to spread this overhead over a good volume of accounts.
• Subpart B—Open-End Credit
• 1026.5—General disclosure requirements.*
• 1026.6—Account-opening disclosures.*
• 1026.7—Periodic statement.*
• 1026.8—Identifying transactions on periodic statements.*
• 1026.9—Subsequent disclosure requirements.
• 1026.10—Payments.*
• 1026.11—Treatment of credit balances; account termination.
• 1026.12—Special credit card provisions.*
• 1026.13—Billing error resolution.*
• 1026.14—Determination of annual percentage rate.
• 1026.15—Right of rescission.
• 1026.16—Advertising.• Subpart G—Special Rules Applicable to Credit Card Accounts and Open-End Credit Offered to College Students
• 1026.51—Ability to Repay
• 1026.52—Limitations on Fees.*
• 1026.53—Allocation of payments.
• 1026.54—Limitations on the imposition of finance charges.
• 1026.55—Limitations on increasing annual percentage rates, fees, and charges.*
• 1026.56—Requirements for over-the-limit transactions.
• 1026.57—Reporting and marketing rules for college student open-end credit.*
• 1026.58—Internet posting of credit card agreements.
• 1026.59—Reevaluation of rate increases.
• 1026.60—Credit and charge card applications and solicitations.*Property value is discussed in Section 1003.4(a)(28). Neither the regulation nor the Commentary for this section mentions the possibility of collateral other than . However for the property value used in the loan-to-value ratio, discussed in section 1003.4(a)(24), the Commentary states, “The property used in the combined loan-to-value ratio calculation does not need to be the property identified in § 1003.4(a)(9) and may include more than one property and non-real property.” It would be helpful to have the same discussion in both sections or at least to have a cross reference between the two sections. Section 1003.4(a)(28) states that the number reported is the value of the property securing the covered loan or, in the case of an application, proposed to secure the covered loan relied on in making the credit decision. If you rely on the value of the automobile, in addition to the value of the other collateral, then presumably you should report that amount.
Comment 4(a)(23) – 3 states, “If a file was closed for incompleteness, or if an application was withdrawn before a credit decision was made, a financial institution reports that the requirement is not applicable, even if the financial institution had calculated the ratio of the applicant’s total monthly debt to total monthly income.”
This is a close call. According to Comment 4(a)(8)(i) – 13 if you issued an approval conditioned solely on customary commitment or closing conditions and the applicant expressly withdraws before satisfying all underwriting or creditworthiness conditions and before you deny the application or closes the file for incompleteness, then the application is reported as withdrawn. If the facts change even a little bit then the answer changes as well.
As explained in the program manual and as shown on the program PowerPoint slides, the lender credits disclosed on the LAR are the Lender Credits from Section J of the Closing Disclosures. That amount includes the general credits, which includes the tolerance cure, but not the specific lender credits.
There are really two questions. Are you eligible for the partial exemption? And, if you are eligible, should you take advantage of the partial exemption?
• First question. The conditions for determining eligibility are detailed on page 21 of the program materials.
o It appears that you meet, just barely, the volume threshold. When a bank is that close to a threshold cutoff, based on my experience as an examiner, you can expect very detailed scrutiny of your calculation documentation. You want to very sure that your calculations are accurate.
o We assume that you meet the CRA rating requirement.
• Second question. We are big believers in the value of the expanded HMDA data. Whether you submit the full data or not it is available for your use. Once examiners are aware that you have collected the data they will most likely want access even if you choose not to submit the data. Not submitting the data shields the data from disclosure to the general public.I agree with Robin – The code is not required, but not aware of anything that prohibits including it.
Current confusion about the TCPA results from cases that challenge what is considered as a “automatic telephone dialing system” (ATDS). From recent cases it appears that the definition of ATDS could be so broad as to include using a cell phone to call a customer. The Federal Communications Commission is seeking further comment on what constitutes a ATDS. Until the issue is clarified the safe course of action continues to be obtain prior express consent from your consumer before making calls; that appears to be what your software vendors are attempting to do.
The reply from rcooper is correct, but let me add that the initial Loan Estimate (LE) would not reflect the charge, since it is not required by your bank or by any of the attorney’s on your list. Once you become aware of the charge then the charge would be reflected in Section C of any revised LE or Closing disclosure.
Since your bank will have exceeded the large bank threshold for both 2017 and 2018 it will need to begin collecting data in 2019.
It is possible that you maybe overthinking the issue with the codes. There is no need for a book explaining codes. For small business and small farm loans you only collect:
(1) A unique number or alpha-numeric symbol that can be used to identify the relevant loan file;
(2) The loan amount at origination;
(3) The loan location; and
(4) An indicator whether the loan was to a business or farm with gross annual revenues of $1 million or less.
The FFIEC publishes A Guide to CRA Data Collection and Reporting that may be helpful.
