18 The Community Banker mibonline.org Continued from page 17 TILA. Q: We are beginning to use a vendor to electronically file our mortgages/deeds of trust. Are we correct that the fee for this service is not an APR fee, and that it goes in Section B on the LE and CD? A: You are half right. The vendor is a private company that provides the e-filing services, so their fee does not fit into the finance charge exclusion in Regulation Z for “security interest charges” (filing fees, in plain English) because it is not a fee “prescribed by law that actually are or will be paid to public officials” to file/perfect the security interest. Therefore, their fee is an “APR fee,” one that is a finance charge – and likely a prepaid finance charge since it is presumably paid at settlement. You are correct on where the fee should go. It belongs in section B since the bank is requiring this particular provider be used. EFTA. Q: For EFT error resolutions, how many days after a customer notifies us of an error do we have to give provisional credit? Is that business days or actual days? A: For an electronic fund transfer (EFT) “error,” provisional credit must be given if the bank will need more than 10 business days to investigate and resolve an alleged error. This gives the bank up to 45 calendar days to finish its investigation for many errors. The 10 business day time period is doubled if the “error” involves a new account (within 30 days after opening) and the 45 calendar day limit is doubled if the “error” involves a point-of-sale debit card transaction (because, no doubt, of the extra time needed when communicating with merchants and processors). To take advantage of the 45 (or 90) calendar day extended time limit, the bank must provisionally credit the customer’s account with the amount of the alleged “error” by the 10th business day (or 20th business day for a new account). BSA. Q: Is a beneficial ownership form required for a loan/account involving a trust? A: It depends. The Certification of Beneficial Ownership form is required only for a statutory trust, not a garden variety trust. The Financial Crimes Enforcement Network (FinCEN) specified this distinction in its 2016 Frequently Asked Questions release on this rule. FinCEN clearly stated that only a statutory trust (one created by a filing with the state’s Secretary of State) would require the form. TILA. Q: Would a late fee on a loan be considered a prepaid finance charge? A: No, a fee triggered by a late payment is not a prepaid finance charge for two reasons: (1) a late payment fee is not a finance charge and (2) such a fee is not collected before or at closing (which is needed to be “prepaid” for Regulation Z purposes). EFAA. Q: Can a hold be placed on a Cashier’s Check that is payable to a non-customer and signed by our customer, and deposited in our customer’s account, which does not have enough money in the account to cover the check? A: Yes. Next-day availability for cashier’s checks is required only when the cashier’s check is deposited into an account of a payee named on the check, not into the account of a transferee/endorsee. The Official Staff Commentary on Regulation CC specifically provides that one statutory condition for next-day availability for these checks is “that the check must be ‘endorsed only by the person to whom it was issued.’” So, a cashier’s check deposited into someone other than a payee’s account may be treated as just any other local check, including having holds placed on the availability of its funds. MMDAs are a savings deposit that initially had transaction limitations, so a NOW-like restriction on ownership was never imposed on MMDAs. For-profit businesses are free to hold MMDAs, as well as other savings deposits.
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