May
Question: What is the required charge off date on past-due, unsecured loans?
Answer: In general, this will be dictated by internal bank policy, which should be based on the regulatory agencies’ Uniform Retail Credit Classification and Account Management Policy. It provides in part that retail credit should be classified based on the following criteria:
• “Open- and closed-end retail loans past due 90 cumulative days from the contractual due date should be classified Substandard.
• Closed-end retail loans that become past due 120 cumulative days and open-end retail loans that become past due 180 cumulative days from the contractual due date should be classified Loss and charged off. …For operational purposes, whenever a charge-off is necessary under this policy, it should be taken no later than the end of the month in which the applicable time period elapses.
”https://www.federalregister.gov/documents/2000/06/12/00-14704/uniform-retail-credit-classification-and-account-management-policy#citation-2-p36904
April
April 27
Question: What is the required charge off date on past due unsecured loans?
Answer: For overdraft accounts, there is a standard of 60 days for charge offs. However, there isn't one for loans. This would depend on your bank's policies. "In addition, overdraft balances should generally be charged off when considered uncollectible, but no later than 60 days from the date first overdrawn."
Joint Guidance on Overdraft Protection Programs, p. 4 https://www.federalreserve.gov/boarddocs/SRLETTERS/2005/SR0503a1.pdf
April 20
Question: What is the required charge off date on past due unsecured loans?
Answer: For overdraft accounts, there is a standard of 60 days for charge offs. However, there isn't one for loans. This would depend on your bank's policies.
"In addition, overdraft balances should generally be charged off when considered uncollectible, but no later than 60 days from the date first overdrawn."
Joint Guidance on Overdraft Protection Programs, p. 4 https://www.federalreserve.gov/boarddocs/SRLETTERS/2005/SR0503a1.pdf
April 12
Question: Can a single loan be reported on both the HMDA and CRA LAR in a given year?
Answer: It depends. Generally, loans cannot be double counted for HMDA and CRA purposes. However, multifamily affordable housing loans may be reported both under HMDA as home mortgage loans and as Community Development loans. Also, the refinance of a loan to a business where a residence is taken as collateral could be reported both under HMDA and as a Small Business or Small Farm loan.
References:
"Except for multifamily affordable housing loans, which may be reported by retail institutions both under HMDA as home mortgage loans and as community development loans, in order to avoid double counting, retail institutions must report loans that meet the definition of “home mortgage loan,” “small business loan,” or “small farm loan” only in those respective categories even if they also meet the definition of “community development loan.”"
https://www.ffiec.gov/cra/pdf/2015_CRA_Guide.pdf
"If an institution is not a wholesale or limited-purpose institution, it cannot designate a loan as a community development loan if the loan has already been reported or collected by the institution or an affiliate as a small business, small farm, consumer, or home mortgage loan (except in the case of a multifamily dwelling loan, which may be considered a community development loan as well as a home mortgage loan)." https://www.ffiec.gov/cra/pdf/2015_CRA_Guide.pdf
“A loan of $1 million or less with a business purpose that is secured by a one-to-four family residence is considered a small business loan for CRA purposes only if the security interest in the residential property was taken as an abundance of caution and where the terms have not been made more favorable than they would have been in the absence of the lien. (See Call Report Glossary definition of “Loan Secured by Real Estate.”) If this same loan is refinanced and the new loan is also secured by a one-to-four family residence, but only through an abundance of caution, this loan is reported not only as a refinancing under HMDA, but also as a small business loan under CRA. (Note that small farm loans are similarly treated.)"
https://www.federalregister.gov/d/2016-16693/p-451c
March
March 27
Question: When purchasing loan, do we need to collect a beneficial ownership form? If so, will collecting after the loan is purchased acceptable?
Answer: IP guidance suggests that for purchased loans banks are required to ensure that the institution or broker that originated the loan complied with the applicable CIP requirements but the bank does not necessarily need to perform this themselves after the purchase has been completed:
"2. Are loan participations purchased from third parties and loans purchased from a car dealer or mortgage broker within the exclusion from the definition of “account” for loans acquired through an acquisition, merger, purchase of assets, or assumption of liabilities? Yes, this exclusion is intended to cover loan participations purchased from third parties and loans purchased from a car dealer or mortgage broker. If, however, the bank is extending credit to the borrower using a car dealer or mortgage broker as its agent, then it must ensure that the dealer or broker is performing the bank’s CIP…"
FAQ #2 CIP Final Rule: https://www.fincen.gov/sites/default/files/guidance/finalciprule.pdf
Thus, subject to any internal guidelines providing otherwise, these will often be subject to the exclusion above. As always, to avoid implicating any UDAAP/UDAP and/or fair lending considerations, the bank will want to ensure that it is treating similarly situated borrowers consistently, across the board in performing CIP/beneficial ownership on these purchased loans.
March 16
Question: If we cancel a customer's debit card do we have to notify them?
Answer: Per Reg E commentary the cancellation of an access device is a change that does not require disclosure. https://www.consumerfinance.gov/rules-policy/regulations/1005/interp-8/#8-a-Interp-2 The only prohibition/requirement would come from the account agreement so you'll have to confirm with the agreement before proceeding.
March 9
Question: Are banks required to provide a monthly statement to customers for DDAs even if there is no activity occurring?
Answer: Internal policy may require a monthly statement regardless of activity level, but Reg E requires a periodic statement for accounts to or from which electronic funds transfers can be made for each monthly cycle in which an electronic funds transfer has occurred. If there is no activity in a month then a statement is not required but a statement must be sent at least quarterly, so at least every 3 months even if there is no account activity. https://www.consumerfinance.gov/rules-policy/regulations/1005/9/#b
February
February 23
Question: If we cancel a customer's debit card do we have to notify them?
Answer: Per Reg E commentary the cancellation of an access device is a change that does not require disclosure. https://www.consumerfinance.gov/rules-policy/regulations/1005/interp-8/#8-a-Interp-2 The only prohibition/requirement would come from the account agreement so you'll have to confirm with the agreement before proceeding.
February 9
Question: Can an LLC be a beneficiary on an account.
Answer:There's a restriction in the deposit insurance coverage from naming an LLC on a POD account unless it's charitable or non-profit entity:
"(c) Definition of beneficiary. For purposes of this section, a beneficiary includes a natural person as well as a charitable organization and other non-profit entity recognized as such under the Internal Revenue Code of 1986, as amended." Read more.
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