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For CD advertisement or anything account earing interest for that matter. Reg DD states:
RATES AND YIELDS
Section 230.8(b) restricts the use of rates in advertisements. First, if an advertisement states a rate of return, the rate must be identified as an “annual percentage yield” (using that term). No other term can be used except for “interest rate,” provided it is stated in conjunction with the annual percentage yield. The abbreviation “APY” may be used if the term “annual percentage yield” is stated at least once in the advertisement. Often, advertisements will use the abbreviation in the text of the advertisement and direct the consumer to the bottom of the advertisement for the expansion of the abbreviation. Second, if the annual percentage yield is stated in an advertisement, §230.8(c) requires that the following additional disclosures be made clearly and conspicuously:
• Variable rates. For variable-rate accounts, a statement that the rate may change after the account is opened.
• Time annual percentage yield is offered. The period of time the annual percentage yield will be offered or a statement that the annual percentage yield is accurate as of a specified date.
• Minimum balance. The minimum balance required to obtain the advertised annual percentage yield. For tiered-rate accounts, the minimum balance required for each tier shall be stated in close proximity and with equal prominence to the applicable annual percentage yield.
• Minimum opening deposit. The minimum deposit required to open the account, if it is greater than the minimum balance necessary to obtain the advertised annual percentage yield.
• Effect of fees. A statement that fees could reduce the earnings on the account.
• Features of time accounts. For time accounts:
o Time requirements. The term of the account.
o Early withdrawal penalties. A statement that a penalty will or may be imposed for early withdrawal.
o Required interest payouts. For noncompounding time accounts with a stated maturity greater than one year that do not compound interest on an annual or more frequent basis, that require interest payouts at least annually, and that disclose an APY determined in accordance with section E of Appendix A of the regulation, a statement that interest cannot remain on deposit and that payout of interest is mandatory.Recognizing Reg DD doesn’t address when no rate is used, but UDAAP and UDAP speak to unfairness and is a foundation to Fair Banking. I can see your concern with no rate. Because the question in my mind is someone getting quoted something different? Why can’t the rate and APY be in the add? etc.
Ultimately, this would be a business decision. But I agree it needs to be looked at through a UDAP lens.
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Thank you PParks for jumping in and answering this! As follow up to the last question in the post, I has always been my understanding that you would use code 9 when the loans do not fit in any of the other options. I personally have not seen code 9 used but would be interested in seeing if any of our Banks have used it in the past.
Thank you for your question. Since this is very state focused question, we recommend that you reach out to an attorney. Our focus as a National training company is Federal Regulations and Law
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The rules are written as follows:
According to the final rule, “a structure that is part of a residential property” refers to a structure used primarily for personal, family, or household purposes and not used primarily for agricultural, commercial, industrial, or other business purposes. In instances in which certain structures are used for both residential and business purposes, the exemption applies only to structures with a primary residential purpose. A structure is “detached” if it stands alone, meaning it is not joined by any structural connection to the residential structure. Furthermore, the detached structure may not “serve as a residence.”
Based on how I’m understanding your questions:
1. The house would be required to have insurance because it is used as a residence.
2. The fact that is not a personal residence of the borrower would not exempt it from insurance.
3. The rules do not speak to a limit on structures – only to being used as a residence.
4. Neither the garage or the storage buildings sound as if they are used as a residence.NOTICE: This email message, including any attachments, is intended only for the addressee, and may contain confidential and privileged information either as protected work product or confidential client information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, do not read, copy, retain, or disseminate this message or any attachment, and please contact the sender by reply e-mail or at 888.760.5646and destroy all copies of the original message and attachments. Neither the transmission of this message or any attachment, nor any error in transmission or misdelivery shall constitute waiver of any applicable legal privilege.
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________________________________________1. Yes, if you are notified that the flood maps have been updated you are required to notify the borrower that the flood maps have been updated they need to get insurance. If they do not obtain it then you are required to forceplace it. At the time property it is released you would then need to follow the proper requirements to remove the insurance.
2. Yes, if there is any building in a flood plain regardless of use or condition it will require flood insurance per the regulations. As with the prior answer you are required to required to notify the borrower that the flood maps have been updated they need to get insurance. If they do not obtain it then you are required to forceplace it.
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If there is a barn (any building) in a flood plain regardless of use it will require flood insurance per the regulations. If the FI, using risk based decisions, will allow any deviation from the law requirement it would need to be documented in a policy etc. However, the law does require insurance on any budling in the flood plain.
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Line increases were included in both the proposal and the final rule as being a trigger for the data collection. As such, I would not remove them from your origination count when determining the tier. In the final rule line increase is now a collection point in the credit purpose category. Additionally, being CRA reportable does not exclude loans from 1071 reporting. The only exception they gave in the final rule is for HMDA reportable loans. CRA reportable loans will be on both the CRA and Small Business Data Collection LARs.
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I would caution excluding loans just because you didn’t consider the GAR. The CFPB clearly stated what ever process you use to determine the FIs tier should not circumvent collection of information (or tier determination). The expectation is that you use a reasonable methodology to determine what tier your FI would fall into. IMO, just because it wasn’t’ collected or asked for would not fall into reasonableness. However, it would need to be a Management or BOD decision as to the practices you use to determine the FI tier.
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This could be a gray area. The definition states “business concern”. Which could mean if they are getting a loan using their SSN ( which in some states is a Sole Prop or a DBA) it would be reportable. If I’m getting a loan to buy 5 cows to be fed and raised on my acreage that will be slaughtered and sold that could be viewed as a business concern. It is important that your procedures be created to address gray areas and how you will handle them. The rules did not differentiate between using a TIN or a SSN to define a business. Only speaks to GAR and loans, which they have defined purposes of the proceeds.
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FEMA standards and appraisal rules list an appraisal as being stale after 1 year. Flood FAQs from May 2022 discuss one method of coverage being replacement cost value which I assume is what is listed on the Farm Policy. Rules also indicate that you would need to align the flood insurance requirements with the Flood rules and your bank’s policy.
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You would cancel it as of the date of the flood change and ensure all payments are refunded from that date.
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This would be a legal question and best answered by an Attorney in the State of California. Putting on my BSA/AML compliance hat – I would have to ask why they would do a loan in CA since they do not operate in your state. That would be the “big” red flag IMO.
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Flood Q&A’s state in the “Amount” Question 2. – The insurable value of the building may generally be the same as 100 percent Replacement Cost Value (RCV), which is the cost to replace the building with the same kind of material and construction without deduction for depreciation. In calculating the amount of insurance to require, the lender and borrower (either by themselves or in consultation with the flood insurance provider or other appropriate professional) may choose from a variety of approaches or methods to establish the insurable value. They may use an appraisal based on a cost-value (not market-value) approach, a construction-cost calculation, the insurable value used on a hazard insurance policy (recognizing that the insurable value for flood insurance purposes may differ from the coverage provided by the hazard insurance and that adjustments may be necessary), the replacement cost value listed on the flood insurance policy declarations page, or any other reasonable approach, so long as it can be supported.
Flood Q&A’s state in the “Condo/COOP” Question 4 (Which is the closest to your situation)- If there is no RCBAP on the residential condominium building, then the lender must require the individual unit owner to obtain coverage in an amount sufficient to meet the requirements outlined in Q&A Condo and Co-Op 3.
Based off the FAQs you would need to determine which method your FI will follow for Flood coverage and use that approach. I would also suggest this be documented in policy so the same approach is used the next time this would happen.
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Per Reg Z section 1026.36(g) and the SAFE Act testing in examiner testing manuals they state
(ii)The name of the individual loan originator (as the name appears in the NMLSR) with primary responsibility for the origination and, if the NMLSR has provided such person an NMLSR ID, that NMLSR ID.So it would have to be the name as it is tied to the the NLMS number. However, the NLMS system does allow for an “AKA” if that is also part of the MLO’s record I would think you could possibly use the “AKA” on their business card. I would just caution that since it would be regulator “discretion” to take it since their exam manuals state “as the name appears in the NMLSR”
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That would be up to your institution. It sounds as if this is an internal policy you have put in place. Regulation only says you must provide reasonable notice of flood insurance requirements prior to loan closing.
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