A: Yes, this probably should be considered it misleading as written because Regulation DD states that “An advertisement shall not… [r]efer to or describe an account as ‘free’ or ‘no cost’ (or contain a similar term) if any maintenance or activity fee may be imposed on the account.” “No monthly service charge” seems to be a “similar term” to “free” or “no cost.” Now, if the advertisement clearly stated, “NO Monthly Service Charge with E-Statements,” that would be a different story. The limiting factor would be clearly stated, making the advertisement compliant (and no longer misleading). BSA. Q: We are unsure about how to file Currency Transaction Reports (CTR) for the following kinds of transactions. We have a customer, Bonnie, who is an individual and, on behalf of herself, cashed a check in the amount of $12,000 and also closed (withdrawing $9.26 cash) an account titled Bonnie Realty Group, LLC. Is it correct to file a Part I on Bonnie (Person conducting on own behalf) for a withdrawal in the amount of $12,010 (total amount of cash Bonnie received) and a second Part I on the Realty Group (Person on whose behalf transaction was conducted) for a withdrawal in the amount of $10? Would this be filed differently if the Realty Company was a Sole Proprietor? A: Actually, for Bonnie and her LLC, you will need three Part I’s – one for Bonnie as the person conducting on her own behalf (with $12,000 cash out), one for Bonnie as the person conducting on behalf of another (with $10 cash out), and one for Bonnie Realty as a person on whose behalf a transaction is conducted (also with $10 cash out). If the realty company had been a sole proprietorship operating under a “fictitious name” (DBA, doing business as), then there would have been only one Part I filed with the DBA name input in field eight, “Alternate Name.” TILA. Q: I have a question on a rescission calendar tool I use. The Federal Reserve is closed on Monday following a specific federal holiday this year (Juneteenth). Can we really count that day as a “business day” for rescission purposes? A: Yes. For a federal holiday such as Juneteenth, New Year’s Day, Independence Day, Veterans Day, or Christmas, the specified date is the “holiday” regardless of when it happens to be observed by the Federal Reserve or other entities in a particular year (particularly when the holiday falls on a weekend). This situation is anticipated in the Official Staff Commentary on Regulation Z for the definition of “business day” – even though the text regarding the “specific” definition does not mention the Juneteenth holiday yet – in Comment 2 to paragraph 2(a)(6). This comment states, “When one of these holidays (July 4, for example) falls on a Saturday, Federal offices and other entities might observe the holiday on the preceding Friday (July 3). In cases where the more precise rule applies, the observed holiday (in the example, July 3) is a business day.” EFAA/EFTA. Q: And how does a federal holiday like Juneteenth that is date-specific impact deposit-related requirements, particularly those in Regulation CC (funds availability) and Regulation E (electronic fund transfers)? A: These two deposit-related rules define “business day” differently. Regulation E has a simple definition that mirrors the “general” definition of the term in Regulation Z. A “business day” is “any day on which the offices of the consumer’s financial institution are open to the public for carrying on substantially all business functions.” So, if the bank’s offices are not open for “substantially all business functions,” that day is not a Regulation E “business day.” On the other hand, Regulation CC resembles the “specific” definition in Regulation Z (almost). The underlying statute defines “business day” as “any day other than a Saturday, Sunday, or legal holiday.” Regulation CC elaborates on this by spelling out the federal legal holidays (although Juneteenth has not yet been added to the list in the regulation). Then, it adds the following sentence, “If January 1, July 4, November 11, or December 25 fall on a Sunday, the next Monday is not a business day” – reflecting the normal business day schedule of the Federal Reserve System (FRS), a key element for availability of check deposits that clear through the FRS. Presumably, Juneteenth should receive this same treatment, even though explicit reference to this new holiday has not yet been added. ECOA/HMDA. Q: We would still record and report demographic information (race, ethnicity, and sex) for investment properties, right? A: That depends. You would not collect “government monitoring information” (GMI) for Regulation B purposes since the property securing the loan will not be occupied by the applicant as their principal residence. However, if the bank is subject to the Home Mortgage Disclosure Act (HMDA), you would collect GMI if the purpose of the loan is “home purchase,” “home improvement,” or “refinancing.” Continued from page 13 Young & Associates provides banks and thrifts with support for their compliance programs, independent reviews, and in-bank training, as well as a full menu of management consulting, loan review, IT consulting, and policy systems. 14 The Community Banker mibonline.org
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