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
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
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
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
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: firstname.lastname@example.org.
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
ABA BANKING JOURNAL
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