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A silent auction would not be a lottery since there is no requirement to advance thing of value (money, opening account, etc.) for a chance to win.
There is not a blanket training requirement in Regulation Z like you might see in some laws/regulations. However, there are loan originator training requirements. This requirement is a requirement for LOs in 1026.36(f). In addition, you should consider risk (products, changes to the reg, recent audit findings) to help determine how frequently your lending staff (LOs and others) will need training on Regulation Z. Regulation Z the is largest regulation on the lending side and has significant changes over the last few years, I would recommend that you provide training at least annually and more frequently if you’ve had Reg Z related audit findings, new products, changes to the reg, etc.
1026.36(f)(3) For each of its individual loan originator employees who is not required to be licensed and is not licensed as a loan originator pursuant to § 1008.103 of this chapter or State SAFE Act implementing law:
… (iii) Provide periodic training covering Federal and State law requirements that apply to the individual loan originator’s loan origination activities.Commentary 36(f)(3)(iii)
1. Training. The periodic training required in § 1026.36(f)(3)(iii) must be sufficient in frequency, timing, duration, and content to ensure that the individual loan originator has the knowledge of State and Federal legal requirements that apply to the individual loan originator’s loan origination activities. The training must take into consideration the particular responsibilities of the individual loan originator and the nature and complexity of the mortgage loans with which the individual loan originator works. An individual loan originator is not required to receive training on requirements and standards that apply to types of mortgage loans that the individual loan originator does not originate, or on subjects in which the individual loan originator already has the necessary knowledge and skill. Training may be delivered by the loan originator organization or any other person and may utilize workstation, internet, teleconferencing, or other interactive technologies and delivery methods. Training that a government agency or housing finance agency has established for an individual to originate mortgage loans under a program sponsored or regulated by a Federal, State, or other government agency or housing finance agency satisfies the requirement in § 1026.36(f)(3)(iii), to the extent that the training covers the types of loans the individual loan originator originates and applicable Federal and State laws and regulations. Training that the NMLSR has approved to meet the licensed loan originator continuing education requirement at § 1008.107(a)(2) of this chapter satisfies the requirement of § 1026.36(f)(3)(iii), to the extent that the training covers the types of loans the individual loan originator originates and applicable Federal and State laws and regulations. The training requirements under § 1026.36(f)(3)(iii) apply to individual loan originators regardless of when they were hired.Answer by Jack Holzknecht:
There is no problem with offering both a construction-to-perm product and a construction only product.I am not aware of anything that would prohibit you from doing so unless there is some type of court order attached, but you might want to check with your legal counsel to confirm. The IRS has requirements to provide notice to the individual.
You would report the difference between the APR of the Covered Loan that would have resulted had the applicant accepted it and a comparable transaction’s APOR as of the date the interest rate was set.
I think this would be considered a recreational vehicle and would not be reportable.
Existing commentary 1003.2
Dwelling.
1. Coverage. The definition of “dwelling” is not limited to the principal or other residence of the applicant or borrower, and thus includes vacation or second homes and rental properties. A dwelling also includes a multifamily structure such as an apartment building.2. Exclusions. Recreational vehicles such as boats or campers are not dwellings for purposes of HMDA. Also excluded are transitory residences such as hotels, hospitals, and college dormitories, whose occupants have principal residences elsewhere.
Commentary Effective 1-1-18:
2(f) Dwelling
1. General. The definition of a dwelling is not limited to the principal or other residence of the applicant or borrower, and thus includes vacation or second homes and investment properties.3. Exclusions. Recreational vehicles, including boats, campers, travel trailers, and park model recreational vehicles, are not considered dwellings for purposes of § 1003.2(f), regardless of whether they are used as residences. Houseboats, floating homes, and mobile homes constructed before June 15, 1976, are also excluded, regardless of whether they are used as residences. Also excluded are transitory residences such as hotels, hospitals, college dormitories, and recreational vehicle parks, and structures originally designed as dwellings but used exclusively for commercial purposes, such as homes converted to daycare facilities or professional offices.
The CFPB’s executive summary and the final rule tells us you can make some of the changes on the effective date if you choose to do so, but compliance is mandatory on 10-1-18. It states:
“Beginning on the 2017 Rule’s effective date and for transactions for which a
creditor or mortgage broker receives an application prior to October 1, 2018, a person can comply with the 2017 Rule, but is not required to do so. Generally, during this optional compliance period, a person may comply with the changes set forth in the 2017 Rule all at one time or phase in the changes over time (even within the course of a transaction). Notwithstanding this flexibility, a person cannot phase in the 2017 Rule in a way that would violate provisions of Regulation Z that are not being changed. ” (e.g. issuing a GFE and then CD).With that in mind, if you are going to begin to take advantages of some of the changes that will benefit the FI I would also ensure the disclosures are updated to benefit the consumer (making them as informed as possible). on the shopping list, I assume you are already disclosing services that you require and for which you allow the consumer to shop, but if there are changes you would need to make then I would recommend you make those in conjunction with implementing the clarifying comments regarding the 10% tolerance bucket. In addition, it might be easier to implement these changes incrementally rather than all on the mandatory compliance date.
Please let us know if you have additional questions.
Yes, I think your best course of action to comply with the requirements would be to verify/send the notice at the time of the address changes rather than waiting for a request for new or replacement cards. By automatically notifying the customer you eliminate the need for monitoring those changes for at least 30 days for a request for a new or replacement card and then notifying after such receipt.
Form of notice (12 CFR 334.91(e))
Any written or electronic notice that a card issuer provides to satisfy these rules must be clear and conspicuous and provided separately from its regular correspondence with the cardholder.Here are the FDIC exam procedures: https://www.fdic.gov/regulations/compliance/manual/8/viii-6.1.pdf. Change of address begins on p. 6.35.
It says generally “current debt obligations” and does specify consumer debt nor exclude commercial debt, so yes I would include any commercial debt obligations as well.
Response from Rachel Hamilton (CMG member/presenter during M2M):
We will use the same documentary and non-documentary measures we use to verify customers and account signers consistent with our written CIP; however, we will accept photocopies of IDs for beneficial owners as allowed by the regulation and guidance. Beneficial owners will not have to appear in person, but the bank will rely on the information and copies of IDs provided by the business representative opening the account.
I agree with your assessment. Coverage limits would be based on the type of property (e.g. residential, other residential, non-residential) rather than who occupies it. Since you have a residential structure, those applicable limits would apply. See page 18 of the NFIP Q&A: https://www.fema.gov/media-library-data/20130726-1438-20490-1905/f084_atq_11aug11.pdf. Looking at the definitions of non-residential, business building, and residential building is also helpful to understand how the buildings are defined: https://www.fema.gov/media-library-data/1490893737230-1063d7d6fbb6bbb9a46fc5eaa34a94fb/23_definitions_508_apr2017.pdf
There is a $500,000 coverage limit for other residential buildings (non-condominium residential buildings designed for use for five or more families) but that doesn’t sound like what you have here. I don’t recall anywhere that the NFIP rules or the flood regs discuss owner-occupied, except determining when the NFIP will pay replacement cost on a structure in regards to a principal residence (https://www.fema.gov/media-library-data/20130726-1620-20490-4648/f_679_summaryofcoverage_11_2012.pdf). Here is the same form for commercial property if you’re interested: https://www.fema.gov/media-library-data/6a2ad0291e8d6a5452aa891a6c037039/fema_Summary_508C.pdf.
Try to have a conversation with the examiner to explain your thoughts and ask what they are basing this opinion on.
You must deliver or place the LE in the mail the disclosures not later than the third business day after you receive consumer’s application (i.e. the six pieces of information you mentioned – consumer’s name, income, social security number to obtain a credit report, property address, estimated property value, and loan amount requested).
You may issue the LE prior to receiving all six pieces of this information; however, once you receive the final piece of information it is not considered a change of circumstance that would allow you to reset tolerances if any of the disclosed information is affected.
Comment 19(e)(3)(iv)(A)-3:
Six pieces of information presumed collected, but not required. Section 1026.19(e)(1)(iii) requires creditors to deliver the disclosures not later than the third business day after the creditor receives the consumer’s application, which consists of the six pieces of information identified in § 1026.2(a)(3)(ii). A creditor is not required to collect the consumer’s name, monthly income, social security number to obtain a credit report, the property address, an estimate of the value of the property, or the mortgage loan amount sought. However, for purposes of determining whether an estimate is provided in good faith under § 1026.19(e)(1)(i), a creditor is presumed to have collected these six pieces of information. For example, if a creditor provides the disclosures required by § 1026.19(e)(1)(i) prior to receiving the property address from the consumer, the creditor cannot subsequently claim that the receipt of the property address is a changed circumstance pursuant to § 1026.19(e)(3)(iv)(A) or (B).We are not aware of any formal guidance that would require you retain that process. I assume it was the opinion of the examiner and what that examiner deemed to be a best practice.
If you look at 12 CFR 222.91 it outlines rules for address verification if it is also followed by a request for an additional card; you can also meet that requirement by verifying the address when the change is requested which I believe is a prudent approach. However, there is not a signature requirement. You will need to determine if the new process will complies with the requirements in 222.91 and your policy and procedures.
I’m not sure how many examiners you have heard this from, but it may be worth your time to proactively have a conversation with your examiners rather than trying to defend it later which might be more contentious. If they insist a signature it is required they should be able to show you the requirement.
Comments from Don Blaine:
It does appear, based on the links provided, that 4A does not apply to a “normal” Reg E EFT but if it’s a remittance transfer from a consumer to another consumer in a foreign country it may be covered as long as it did not involve an electronic transfer by the consumer sending the money. For example, if you walk in an give your bank $1K in cash and ask them to wire to India the transaction would be covered by 4A but if you were the one to electronically send $1K to someone in a foreign country then 4A doesn’t apply since your transfer would be an electronic funds transfer. Neither the Univ of Cornell website or the ABA article said anything about written disclosures to consumers but Reg DD’s 1030.4(b)(4) requires the bank to disclose, in its account opening disclosures, “the amount of any fee that may be imposed in connection with the account (or an explanation of how the fee will be determined) and the conditions under which the fee may be imposed”.
