COMPLIANCE Q & A TILA. Q: We have a loan that is a consumer installment loan. The loan officer took a vehicle as collateral and then, as additional collateral, they took a third lien on a real estate property that is not the customer’s primary dwelling. We know the loan officer must obtain a flood hazard check and an evaluation of the property. Since this is being uploaded as a consumer installment and not as a mortgage loan, would the loan officer have to produce Loan Estimates (LE) and Closing Disclosures (CD) for the customer because the loan has a real estate property as collateral, even though taken as an abundance of caution? A: Abundance of caution does not change anything here. Once you take real estate as collateral for a consumer-purpose loan, regardless of the reason, you have a TRID loan with a car as additional collateral. How you classify it in-house is up to you and does not affect TRID coverage. HMDA. Q: I am torn on this one. We have a manufactured home that’s titled but built in 2020. It appears that we did this credit as an “auto loan” (because of the title, I believe). But reading online, it looks like if a manufactured home is titled and built after 1976, it would be HMDA reportable, is that correct? A: Yes. Regulation C [12 CFR 1003.2(f)] defines “dwelling” as “a residential structure, whether or not attached to real property. The term includes but is not limited to a detached home, an individual condominium or cooperative unit, a manufactured home or other factory-built home …” ECOA. Q: We received an application, and my brain is circling on what would be the proper denial reason. Their current debt-to-income (DTI) ratio is 63%. They’ve applied to us for a refinance/consolidation that would bring their DTI down to 51%. Both exceed our DTI standards. However, would we use “excessive obligations in relation to income” or “insufficient income for the amount requested” as our reason for denial? I’m leaning towards “insufficient income for the amount requested” because they’re applying for a consolidation. However, the lender believes it should be “excessive obligations in relation to income.” A: The lender is correct. “Excessive obligations” means they are already over the maximum DTI. “Insufficient BILL SHOWALTER Senior Consultant, Young & Associates Inc. income” means the new loan will put them over the maximum DTI. TISA. Q: I have a “round-up savings” question. Is it a compliance requirement that all parties on a joint checking account authorize the automatic transfers (round-ups) to the linked savings account? When enrolling accounts in such a program, should the bank require all joint owners to agree to the terms? A: Regulation DD does not include or address a requirement that all parties on a joint checking account authorize the automatic transfers (round-ups) to the linked savings account. This would be a matter for the “account terms & conditions” (the contract), which is a legal document. You need to consult with the bank’s legal counsel. BSA. Q: I am in the midst of reviewing 2025 transaction activity for our Phase II CTR exempt customers. One such customer had four daily deposits to the business checking account in excess of $10,000. (I know five is required during the review period for continued exemption.) There were three other days throughout the year where the deposit was greater than $9,000 but less than $10,000. However, the deposit combined with a same-day currency exchange pushed the daily total currency figure above the $10,000 mark. The currency exchanges were handled outside of the deposit account. I know currency exchange transactions greater than 22 Community Banker
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