LEGAL EASE - Compliance Adviser Question of the Week
The Compliance Question of the Week is chosen from questions received through the Compliance Adviser Helpline, a free resource available to CBW bank members. Submit your questions to Kelly Goulart - 512-275-2231 or kgoulart@complianceadviser.com.
Does Our CD Product Qualify For Exceptive Relief?
We have a CD product that by contract allows a customer to make deposits during the grace period between maturity and renewal. Would that product qualify for the exceptive relief from the Beneficial Ownership rules? Learn the answer here.
Past Legal Ease Questions of the Week
Do We Have To Provide New Account Hold Notice?
We had a new customer open an account on Monday. Today (Wednesday) it was discovered that there was no hold placed or notice given. I think we can place a hold for 3 or longer up to 12 days (checks were local) and not send a notice, as this is a new account. Deposit was for $20,000.00. Learn the answer here.
Under SCRA Do We Have to Reduce the Amount of Each Payment?
Under the Servicemembers Civil Relief Act (SCRA), if a borrower is entitled to protection under the 6% interest rate limitation, do we have to reduce the payment amount as well? Learn the answer here.
Beneficial Ownership & Loan Modifications
We did a collateral modification on a commercial loan. Would this be subject to the Beneficial Ownership rules? Learn the answer here.
How Do We Report Conditional Loan Approvals for HDMA?
If we issue a letter to a residential mortgage loan applicant that says the borrower is ‘approved’ and we need X, Y, and Z and the borrower never responds, how do we report that for HMDA? Is it reported as ‘Withdrawn?’ Learn the answer here.
TRID Blackhole Disappeared July 1
What is the TRID ‘Blackhole’ and what was the fix? Learn the answer here.
Questions About Overdraft Repayment Plans
Why can't a fresh start repayment plan in connection with an overdraft program exceed 4 installments? Do we need a promissory note? Learn the answer here
Is Saturday A Business Day Under ECOA?
Will you please confirm, for the delivery of an appraisal 3-business days prior to closing, is Saturday included in the definition of ‘business day’? Learn the answer here
Do We Have To Post Notice of Beneficial Ownership?
Do we have to post a notice regarding Beneficial Ownership? If we do, can we incorporate that into the required CIP notice? Learn the answer here
Another Legal Entity is a Beneficial Owner - What Do We Do??
We have a legal entity opening an account. The owners are 2 individuals and one LLC, each owning 33.3 percent. Do we have to ‘dig’ down to identify beneficial owners of the LLC until we identify the natural persons behind that LLC? Learn the answer here
What is a ‘Legal Entity’ Under the Enhanced CDD?
Is a homeowners association (HOA) a ‘legal entity’ under the Beneficial Ownership Rules effective May 11, 2018? Learn the answer here
How to Report Multiple Properties for HMDA 2018?
What are the rules for reporting multiple properties securing a single covered loan in 2018? Did they change? Learn the answer here
What Defines A Business Purpose Loan For HMDA?
We have several families that formed an LLC to buy a vacation home they will all share. Would this loan be a ‘business purpose loan’ for HMDA reporting purposes? Learn the answer here.
Is It Mortgage Fraud? Do We File A SAR?
We had an applicant for a purchase money loan substantially overstate their income on the application. We did not make the loan. Does this qualify as mortgage fraud? Should we file a SAR? ’ Answer
Are Federal Benefits Protected From State Tax Garnishments?
Are garnishments issued by a State Comptroller or Workforce Commission subject to the two-month ‘lookback period’ for the protection of ‘Federal Benefits?’ ’ Answer
Disclose APR 'OK' - Finance Charge... Not So Much We inadvertently failed to include a fee as a ‘Finance Charge’ on a residential mortgage loan. Using APRWIN, the ‘Annual Percentage Rate’ is correct. Do we have an issue with the ‘Finance Charge’ or the ‘Annual Percentage Rate?’ Answer
Can We Stop a Check Kiting Scheme? - We have a customer that we suspect is kiting. In the night depository today, we had checks totaling $13,000 for deposit to that customers account, drawn on that same customer at another bank. Today we also have approximately $13,000 in checks presented by the same bank. Can we do something to stop this suspected kiting? Answer
Website ADA Compliance Update - Where might I find additional/update info regarding ADA Compliance for internet banker? Is the date for implementation still May 2018? Answer
Do We Need An LEI Number? - Is there an exemption for community banks from having to obtain an LEI number? Answer
How many SARS in a Year? - We filed a SAR in which we have identified a suspect. How many ‘continuing activity’ SARs do we have to file? Answer
Debit Card Stolen From Daughters Truck - Can She Dispute the Charges? - One of our customers gave her debit card and PIN (presumable written on a piece of paper) to her daughter to use. The daughter’s truck was broken into and the debit card with the PIN was taken. The card was used to make numerous transactions the customer is now disputing. Since the customer gave the debit card to her daughter, and it was stolen from her daughter, can she really dispute these transactions as unauthorized? Answer
Our Bank is Purchasing a Participation - Do We Need An Appraisal? - A bank we occasionally sell/buy participations to/from has asked us to purchase a participation in an existing commercial real estate secured loan. The participation we would be purchasing is for more than $250M. There is no new money to the borrower. It will, however, be a new loan on our books. Will an appraisal be required on our part or would an evaluation suffice? Answer
'Other" Purpose Category for 2018 HDMA Reporting - In 2018, the HMDA purpose categories will include 'Other'. What is 'other' going to be used for? Answer
Placement of Flood Insurance - Is the advancement of funds to cover the premium to force-placed flood insurance a MIRE event? Answer
Lending Appraisals Multiple Properties - We are making a $500,000 loan secured by three properties. One property is estimated at nearly $400,000, and the other two properties are estimated at $150,000 each. Because the loan is over $250,000 and no other exemption applies, do we need an appraisal on each property? Answer
We have a CD product that by contract allows a customer to make deposits during the grace period between maturity and renewal. Would that product qualify for the exceptive relief from the Beneficial Ownership rules? Learn the answer here.
Past Legal Ease Questions of the Week
Do We Have To Provide New Account Hold Notice?
We had a new customer open an account on Monday. Today (Wednesday) it was discovered that there was no hold placed or notice given. I think we can place a hold for 3 or longer up to 12 days (checks were local) and not send a notice, as this is a new account. Deposit was for $20,000.00. Learn the answer here.
Under SCRA Do We Have to Reduce the Amount of Each Payment?
Under the Servicemembers Civil Relief Act (SCRA), if a borrower is entitled to protection under the 6% interest rate limitation, do we have to reduce the payment amount as well? Learn the answer here.
Beneficial Ownership & Loan Modifications
We did a collateral modification on a commercial loan. Would this be subject to the Beneficial Ownership rules? Learn the answer here.
How Do We Report Conditional Loan Approvals for HDMA?
If we issue a letter to a residential mortgage loan applicant that says the borrower is ‘approved’ and we need X, Y, and Z and the borrower never responds, how do we report that for HMDA? Is it reported as ‘Withdrawn?’ Learn the answer here.
TRID Blackhole Disappeared July 1
What is the TRID ‘Blackhole’ and what was the fix? Learn the answer here.
Questions About Overdraft Repayment Plans
Why can't a fresh start repayment plan in connection with an overdraft program exceed 4 installments? Do we need a promissory note? Learn the answer here
Is Saturday A Business Day Under ECOA?
Will you please confirm, for the delivery of an appraisal 3-business days prior to closing, is Saturday included in the definition of ‘business day’? Learn the answer here
Do We Have To Post Notice of Beneficial Ownership?
Do we have to post a notice regarding Beneficial Ownership? If we do, can we incorporate that into the required CIP notice? Learn the answer here
Another Legal Entity is a Beneficial Owner - What Do We Do??
We have a legal entity opening an account. The owners are 2 individuals and one LLC, each owning 33.3 percent. Do we have to ‘dig’ down to identify beneficial owners of the LLC until we identify the natural persons behind that LLC? Learn the answer here
What is a ‘Legal Entity’ Under the Enhanced CDD?
Is a homeowners association (HOA) a ‘legal entity’ under the Beneficial Ownership Rules effective May 11, 2018? Learn the answer here
How to Report Multiple Properties for HMDA 2018?
What are the rules for reporting multiple properties securing a single covered loan in 2018? Did they change? Learn the answer here
What Defines A Business Purpose Loan For HMDA?
We have several families that formed an LLC to buy a vacation home they will all share. Would this loan be a ‘business purpose loan’ for HMDA reporting purposes? Learn the answer here.
Is It Mortgage Fraud? Do We File A SAR?
We had an applicant for a purchase money loan substantially overstate their income on the application. We did not make the loan. Does this qualify as mortgage fraud? Should we file a SAR? ’ Answer
Are Federal Benefits Protected From State Tax Garnishments?
Are garnishments issued by a State Comptroller or Workforce Commission subject to the two-month ‘lookback period’ for the protection of ‘Federal Benefits?’ ’ Answer
Disclose APR 'OK' - Finance Charge... Not So Much We inadvertently failed to include a fee as a ‘Finance Charge’ on a residential mortgage loan. Using APRWIN, the ‘Annual Percentage Rate’ is correct. Do we have an issue with the ‘Finance Charge’ or the ‘Annual Percentage Rate?’ Answer
Can We Stop a Check Kiting Scheme? - We have a customer that we suspect is kiting. In the night depository today, we had checks totaling $13,000 for deposit to that customers account, drawn on that same customer at another bank. Today we also have approximately $13,000 in checks presented by the same bank. Can we do something to stop this suspected kiting? Answer
Website ADA Compliance Update - Where might I find additional/update info regarding ADA Compliance for internet banker? Is the date for implementation still May 2018? Answer
Do We Need An LEI Number? - Is there an exemption for community banks from having to obtain an LEI number? Answer
How many SARS in a Year? - We filed a SAR in which we have identified a suspect. How many ‘continuing activity’ SARs do we have to file? Answer
Debit Card Stolen From Daughters Truck - Can She Dispute the Charges? - One of our customers gave her debit card and PIN (presumable written on a piece of paper) to her daughter to use. The daughter’s truck was broken into and the debit card with the PIN was taken. The card was used to make numerous transactions the customer is now disputing. Since the customer gave the debit card to her daughter, and it was stolen from her daughter, can she really dispute these transactions as unauthorized? Answer
Our Bank is Purchasing a Participation - Do We Need An Appraisal? - A bank we occasionally sell/buy participations to/from has asked us to purchase a participation in an existing commercial real estate secured loan. The participation we would be purchasing is for more than $250M. There is no new money to the borrower. It will, however, be a new loan on our books. Will an appraisal be required on our part or would an evaluation suffice? Answer
'Other" Purpose Category for 2018 HDMA Reporting - In 2018, the HMDA purpose categories will include 'Other'. What is 'other' going to be used for? Answer
Placement of Flood Insurance - Is the advancement of funds to cover the premium to force-placed flood insurance a MIRE event? Answer
Lending Appraisals Multiple Properties - We are making a $500,000 loan secured by three properties. One property is estimated at nearly $400,000, and the other two properties are estimated at $150,000 each. Because the loan is over $250,000 and no other exemption applies, do we need an appraisal on each property? Answer
In these times of regulatory change and uncertainty, the need for timely and consistent resources is critical for all community banks. Compliance Adviser is a FREE exclusive compliance resource for CBW Bank Members. About Compliance Adviser
For questions or to enroll in the program, CBW member banks should contact Kathy Swenson at 360-754-5138 or kathy@communitybankers-wa.org.
For questions or to enroll in the program, CBW member banks should contact Kathy Swenson at 360-754-5138 or kathy@communitybankers-wa.org.
