ABA Banking Journal - March 2013 - (Page 39)

ABA COMPLIANCE CENTER | inbOx Do passbooks have their limitations? Q. Do passbook savings accounts have withdrawal limits, as do money market savings accounts? We offer passbook accounts and do not accept any “electronic debits” from the account; access is limited to customers who come in with their books so that the passbooks can be updated at the teller line. Also, would your answer change if we allowed passbook owners to transfer funds to other accounts using online banking? A. The number of withdrawals allowed from any savings account is the same, although if you do not allow electronic debits or other third-party transactions (such as checks), there is little chance that a passbook account owner would ever exceed those limits. The term “savings deposit” under Regulation D means: “A deposit or account, such as an account commonly known as a passbook savings account, a statement savings account, or as a money market deposit account (MMDA), that otherwise meets the requirements of Section 204.2(d)(1) and from which, under the terms of the deposit contract or by practice of the depository institution, the depositor is permitted or authorized to make no more than six transfers and withdrawals, or a combination of such transfers and withdrawals, per calendar month or statement cycle (or similar period) of at least four weeks, to another account (including a transaction account) of the depositor at the same institution or to a third party by means of a preauthorized or automatic transfer, or telephonic (including data transmission) agreement, order or instruction, or by check, draft, debit card, or similar order made by the depositor and payable to third parties.” The answer to the transaction limit question does not change if you allow online access. However, keep in mind that if you allow a passbook to be used to make online transfers, you are turning it into an account requiring monthly statements. Online (electronic) transactions are not only subject to the withdrawal limitations under Regulation D, but are also subject to Regulation E. The latter requires monthly statements for any month in which a covered transaction (e.g. online transfers between accounts) occurs. (Response provided December 2012.) Commercial loans and consumer credit reporting collide Q. Our bank has a commercial loan that is past due. The guarantor has been given an opportunity to pay and has not, so we are planning to report the guarantor’s delinquency to our consumer reporting agency. It will be reflected on the guarantor’s personal credit report. Are we required to provide the guarantor with the Notice of Furnishing Negative Information found in 623 (a)(7) of the FCRA and Appendix B of Regulation V? A. Surprisingly, the answer is “yes.” Although the Notice is referred to as a Consumer Notification of Reports of Negative Information, the Fair Credit Reporting Act and Regulation V refer throughout the statute and regulation to “customer,” not consumer, and state that the FACT Act requires lenders that report negative information regarding customers to a consumer reporting agency to notify customers that the lender has reported, or will report, negative information, to consumer reporting agencies. Section 217 of the FACT Act itself uses both terms as well. The final rule issued by the Fed with the model notices does not explain any further. It appears, therefore, that the bank must provide the notice whenever it reports negative information about an individual to a consumer reporting agency, regardless of the original purpose of the loan. (Response provided February 2013.) Opting not to HMDA-report equity lines changes answer Q. Our bank has opted to not classify or report our home equity lines of credit for Home Mortgage Disclosure Act purposes. Since we do not report, is it necessary to collect the Government Monitoring Information (Ethnicity, Race, and Sex) with the applications? A. No. Regulation B permits you to collect government monitoring information only when the purpose of the application is for credit primarily for the purchase or refinancing of a dwelling occupied or to be occupied by the applicant as a principal residence and where the extension of credit will be secured by the dwelling. The regulation makes an exception for banks that must collect such information for HMDA reporting purposes. If you do not report HELOCs, then collecting such information violates Regulation B. (Response provided December 2012.) Leslie Callaway, CRCM, ABA Compliance Project Manager, and Mark Kruhm, CRCM, ABA Senior Compliance Analyst, and other ABA experts, answer ABA member questions here and in the online edition of Inbox at ababj.com. Member banks may submit questions to: compliance@aba. com. Disclaimer: Our answers do not provide, nor are they intended to substitute for, professional legal advice. Answers were current as of date shown at the end of each item. March 2013 | ABA BANKING JOURNAL | 39 http://www.ababj.com

Table of Contents for the Digital Edition of ABA Banking Journal - March 2013

ABA Banking Journal - March 2013
Contents
Chairman’s View
Editor’s Column
The Economy
Bank Notes
Picture This
Don’t let Trojans infiltrate your customers
Pass the Aspirin
Tech Topics
Working smarter, harder, and right
Mobile Banking: 7 keys for success
Compliance Clinic
Compliance Inbox
ABA At Your Service
First Person

ABA Banking Journal - March 2013

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