Forum Replies Created
-
Replies
-
The below from Appendix Q would apply to contingent liability on commercial debt as well as consumer debt.
From Appendix Q:
IV. Consumer Liabilities: Contingent Liability
1.Definition: Contingent Liability. A contingent liability exists when an individual is held responsible for payment of a debt if another party, jointly or severally obligated, defaults on the payment.
and
5. Contingent Liability on Cosigned Obligations.a. Contingent liability applies, and the debt must be included in the underwriting analysis, if an individual applying for a mortgage is a cosigner/co-obligor on:
i. A car loan;
ii. A student loan;
iii. A mortgage; or
iv. Any other obligation.
b. If the creditor obtains documented proof that the primary obligor has been making regular payments during the previous 12 months, and does not have a history of delinquent payments on the loan during that time, the payment does not have to be included in the consumer’s monthly obligations.
As long as you can show what you are paying is fair market value – what you would expect to pay to anyone else for the rental of a similar property – I don’t see it as a conflict.
You are only obligated to investigate the dispute if you receive a notice (as detailed in 1022.43) at either the address you specify or, if you don’t specify an address, any address of your financial institution.
It would be a good idea to inform the customer of how to submit a complaint. Here is a link to a consumer information page on the CFPB’s website discussing how consumer should submit disputes:https://www.consumerfinance.gov/askcfpb/1303/how-do-i-file-a-dispute-with-a-creditor-or-other-institution-that-gives-information-to-a-credit-reporting-company.html.
The new rule doesn’t define motor vehicle, but we can gain some insight by looking at the definition of a vehicle title loan in the regulation implementing the MLA and how it defines motor vehicle. It says it applies to a motor vehicle that has been registered for use on public roads and owned by a covered borrower. It seems any other types of motor vehicle would be considered personal property.
Here’s a link to the regulation (32 CFR 232): https://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR&searchPath=Title+32%2FSubtitle+A%2FChapter+I%2FSubchapter+M%2FPart+232&oldPath=Title+32%2FSubtitle+A%2FChapter+I%2FSubchapter+M&isCollapsed=true&selectedYearFrom=2015&ycord=2265.6
Angie Cowell,
Something I wanted to share that came to my attention and I thought might benefit you: if proceeds of the simultaneous loan will be going toward the purchase of the property securing the loan then it would be considered a purchase and you could use the alternate Cash to Close without the deposit line. This was discussed in an August 2014 Outlook Live webinar.timob1973 –
You are correct. The preamble to the final rule says this on page 35 (https://www.fdic.gov/news/board/2015/2015-06-16_notice_sum_c_fr.pdf):Another financial institution commenter requested that the Agencies clarify that a flood map change on or after January 1, 2016 that causes a building, which had not previously been located in an SFHA, to be located in an SFHA would not impose a duty on a lender to begin escrowing flood insurance premiums and fees for a loan that is secured by such building. Section 102(d) of the FDPA, as amended, applies to loans that experience a triggering event on or after January 1, 2016. Because a map change is not a triggering event, lenders would not be required to escrow flood insurance premiums and fees based solely on that change.
1026.43(c):A creditor shall not make a loan that is a covered transaction unless the creditor makes a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms.
You must comply with the requirements in 1026.43 when making a covered loan. You may comply with the general ATR rules or the QM rules. If you make a QM you can have either a safe harbor or rebuttable presumption of compliance if it is a HPCT. If you do not comply with either the ATR or QM rules under 1026.43, you can expect enforcement actions from your regulator and possible legal action from borrowers, both of which could be severe. Here is an article from the American Bar Association that details what can happen if you do not comply with the ATR rules (see the section on “Failure to Comply”): https://www.americanbar.org/publications/blt/2013/04/02_shatz.html.
I apologize we overlooked your question last week.
I am assuming this is a rescindable transaction, in which case you must refund all fees the consumer paid to you or a third party as part of the transaction. See 1026.15(d)(2) and its commentary.
If the disclosure hasn’t changed the date issued shouldn’t change. Your bank can give copies of the disclosure that was delivered without changing the date issued. If information on the CD changes then I would agree that the date issued would change at that point to reflect the date the revised disclosure was provided.
This sounds like a deposit advance loan. They are discussed on P. 43579 of the federal register linked here.
Most, if not all, ‘‘deposit advance’’
products would (when offered to a
covered borrower) be covered as
consumer credit because this type of
product typically involves credit
extended by a creditor primarily for
personal, family, or household purposes
for which the borrower pays any fee or
charge that is, or is expected to be,
repaid from funds available in the
borrower’s asset account held by that
creditor.I believe the fee associated with the loan would be included in the MAPR.
I’m most concerned about the “Capacity” concept – when does is matter and it really a theoretical test?
It seems as though it is based on your system’s ability/capacity to autodial even if you aren’t using it for that purpose at the time the call is made.
Did the old standard of prior existing relationship essentially become inadequate?
Yes
If our processes only allow for a human to physically contact a customer for verbal cross-sales efforts are we now required to obtain Written Express consent just because we have a computer-based phone system?
If your concern is that your telephone system qualifies as automatic telephone dialer system (ATDS) and you do not use prerecorded or artificial voice message technology, it seems it depends if you are calling a land line or mobile device.
I’ve linked a couple of articles that give good summaries of the rules:
https://www.acc.com/accdocket/onlineexclusives/tcpa.cfm
https://www.kelleydrye.com/publications/client_advisories/0985Also, the ABA is offering a webinar on this topic later this month.
That’s correct. Even if an particular asset is listed on the application by the borrower, if you aren’t relying the asset for repayment and that is reflected in your underwriting (as you mentioned) you don’t need to verify it.
