ABA Banking Journal - March 2014 - (Page 39)

ABA COMPLIANCE CENTER | inbox When does Regulation B clock start ticking? Q. We are trying to devise a moredefined procedure for when an application is complete to begin our 30-day clock under Regulation B. We have seen conflicting information regarding whether we can require employment and income verifications to be received before we call an application "complete." Can you provide some guidance? A. Under Regulation B, "application" means "an oral or written request for an extension of credit that is made in accordance with procedures established by a creditor for the type of credit requested..." A "completed application" means an application in connection with which a creditor has received all the information that the creditor regularly obtains and considers in evaluating applications for the amount and type of credit requested. Reg B states, however, that this pertains only to information the borrower can provide, so that is when you have a "completed application." If you are asking for pay stubs, for example, that is something the borrower can provide, so you can, as a matter of bank policy, consider the application incomplete without this information. However, if by "verifications" you mean contacting the employer and Even after you've determined when Reg b's clock starts-and stops- other regs have their own schedules. receiving some kind of third-party verification, that is not something the borrower can provide, so that could not be a criteria for considering an application as "complete." Finally, an application is complete for Reg B purposes once you have enough information to make a credit decision. If someone applies and the credit report shows delinquencies or bankruptcy and you decide to deny the loan, you would not have to wait for pay stubs to make that decision. Keep in mind that the definition of a "completed" application differs depending on regulation. Definitions differ under Regulation B, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, and the Fair Credit Reporting Act. Understanding these definitions is important because the timing of disclosures required under each depends on determining when an application is "complete." (Response provided November 2013.) is CFPb proper contact under Regulation E rules? Q. I'm having trouble determining which agency(ies) to list as a contact for Regulation E remittance disclosure purposes. We're a statechartered bank, so does that mean we should list our state department of banking or should we use FDIC, because it is our primary regulator? Or, do we use the Consumer Financial Protection Bureau's contact information regardless of whether CFPB is our primary federal regulator? A. Based on your circumstances, it appears that you should provide your state chartering agency's information as well as CFPB's. See the preamble to the Final Rule and the discussion in Section 1005.31(b)(2)(vi). CFPB stated that under the final rule, the provider must disclose the state agency that licenses or charters the remittance transfer provider. However, because disclosures must only be disclosed as applicable, if no state agency licenses or charters a particular provider, then no state agency need be disclosed. (For example, national banks would only disclose CFPB's information.) The bureau also stated that it is appropriate to provide CFPB's contact information, even in instances where CFPB is not the provider's primary federal regulator. CFPB believes that providing a single federal agency as the appropriate contact for senders will assist in tracking complaints. CFPB is not requiring a separate disclosure of a primary federal regulator in the final rule, because the disclosure of multiple federal agencies could confuse senders. Instead, the bureau believes consumers are better served by contacting the bureau, which can direct senders to the appropriate federal agency as necessary. Therefore, Section 1005.31(b)(2) (vi) in the final rule requires a remittance transfer provider to disclose contact information for the bureau, including the toll-free number. (Response provided November 2013.) Leslie Callaway, CRCM, ABA Compliance Project Manager, and Mark Kruhm, CRCM, ABA Senior Compliance Analyst, and other ABA experts, answer member questions here. Member banks may submit them 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 2014 | ABA BANKING JOURNAL | 39

Table of Contents for the Digital Edition of ABA Banking Journal - March 2014

Chairman's View
Editor's Column
The Economy
Bank Notes
Picture This
Basel III a bad fit for smaller banks
Tech Topics
Mortgage reboot
5 revenue ideas for the real world
Compliance Clinic
Compliance Inbox
ABA At Your Service
First Person

ABA Banking Journal - March 2014

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