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Banks use these terms differently. What you do need to know is if one of these actions is a refinance, as defined under Reg Z 1026.20, then you will need to provide new disclosures.
I am not aware of any provision in Regulation E that would allow you deny investigating the claim. I suggest you make an effort to complete the investigation within 10 business days. You may also want to look at when the customer notified you of the transactions which may affect their liability. Here is a link to a Fed guide that gives a good overview of the requirements: https://consumercomplianceoutlook.org/2012/fourth-quarter/error-resolution-procedures-consumer-liability-limits-unauthorized-electronic-fund-transfers/.
The FDIC made some technical changes to their form effective Jan. 18 of this year (2017). You can see them here on the second page, column 1: https://www.gpo.gov/fdsys/pkg/FR-2017-01-18/pdf/2016-31928.pdf. If your bank is FDIC you should make the changes, but they aren’t likely to get much attention since your auditors and examiners should have bigger issues to review.
I’m not aware of any other changes to the CRA form.
As you stated, Reg DD does not apply to business accounts, so you are not required to comply with the statement requirements and I’m not aware of similar requirements for business accounts. With that said, it may be beneficial to customers for you to include this information at no extra effort on your behalf. You should also review your account agreement to ensure you are providing the information/frequency agreed upon in the contract.
You can use the closing disclosure to reflect a change in circumstance if it is too late to issue a revised LE.
Generally you compare the LE to the CD to determine tolerances. If you have a change of circumstance that allows for re-issuing the LE and resetting tolerance you would use that revised LE (or CD if it is within 4 business days of consummation and the change was, therefore, reflected on the CD) for comparing charges. The CFPB has issued a proposal that would clarify when creditors are permitted to re-issue a CD to reset tolerances (https://www.gpo.gov/fdsys/pkg/FR-2017-08-11/pdf/2017-15763.pdf).
The violation of the required time frame for delivery has occurred and cannot be corrected, but the requirement to provide it still remains. Sending the AAN now will inform the customer of the reason for the adverse action. It may also prevent further digging by examiners to see you have taken all necessary actions to correct and prevent this from reoccurring.
I would have a conversation with the lender to better understand why the file was “incomplete” – that might answer your questions or it might identify an area where training is needed.
I believe, technically, since the notice of incompleteness was sent you may report this as the action taken. Again, you may need to have a training session with the lender on what constitutes a denial vs incomplete application – your research with this file will determine that.
In my opinion, you base the action on the original application. The counteroffer was not accepted so what you are left with was the original app. Although Reg C didn’t apply to the original app, I think Reg C commentary does support the general idea of looking to the original app when a counteroffer is not accepted (see paragraph 4(8)(a) discussing action taken).
The confusion come in because the regulation does not match the language of the law. TILA says: Except as otherwise provided in this section, in the case of any consumer credit transaction (including opening or increasing the credit limit for an open end credit plan) in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this subchapter, whichever is later, by notifying the creditor, in accordance with regulations of the Bureau, of his intention to do so. TILA – Right of Rescission
You can see that this differs from the language you included from the regulation because it does not specify it must be an owner of the property. Jack has always advocated the safe approach is to follow the law as it provides protection to more consumers and would save you some trouble if a court decides the regulation doesn’t accurately interpret the law. On the flip side, following the regulation probably won’t get you into trouble with your examiner since most will be looking to the regulation to evaluate your processes.
You are required to include the total sales price for credit sales (1026.18(j)). Although I would generally not advise including this disclosure when it isn’t required, I don’t believe it would be a violation to include it because of the language in 1026.18-1 where it says disclosures under this section “need” only be made as applicable; it does not say “should”, “must”, or “may” which leaves some room for disclosing when not required. However, since this is not required for non-credit sale transactions your auditor/examiners may interpret the inclusion of this as a misunderstanding of the regulation, cite it as a violation and see it an indicator that there may be broader issues with your disclosures. I would recommend only including this as required – document the issue, make adjustments to correct the process, train, etc. and you should be fine.
The flood regulation states an institution shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan. I don’t believe there is any language that specifically prohibitions using force placed insurance in the circumstance you mentioned; however, force placed insurance is intended to be used when coverage becomes inadequate. I would be hesitant to veer from this standard and would certainly recommend checking with your examiners to obtain their interpretation before accepting the force-placed policy. And, of course, when obtaining the examiners opinion document it the best you can.
I am not aware of any guidance that defines “substantial”. I would be hesitant to allow a lender to determine what is and is not substantial. My opinion has always been if we are not granting credit in the amount or for the terms requested then a denial or counteroffer would come into play.
I think a good source of information would be the underwriting guidelines for Fannie Mae and/or Freddie Mac. If you still have concerns have a discussion with your examiner to ask their advice.
https://www.fanniemae.com/content/guide/selling/b3/3.1/09.html
https://www.freddiemac.com/learn/pdfs/uw/docmatrix.pdf.See Jack’s response here: https://mycomplianceresource.com/forums/topic/habitat-4-humanity/
