COMPLIANCE Q&A WINTER 2024 BY WILLIAM J. SHOWALTER, CRCM, SENIOR CONSULTANT, YOUNG & ASSOCIATES INC. 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. TILA. Q: We are scheduled to close a loan tomorrow and found out today that our property is being split into two parcels. This will require a second deed and will change both deeds from standard to nonstandard documents, increasing the government fees by 84% from what was disclosed. The customers shopped for the closing company. Can we rectify this, and how? A: Yes, you can. Since a Closing Disclosure (CD) should already have been issued, but with the original deed filing fees, a corrected CD may be issued without delaying the closing since this fee change does not make the previously disclosed annual percentage rate (APR) inaccurate, does not involve a product change and does not involve the addition of a prepayment penalty. BSA. Q: Our bank discovered that we failed to file a continuing activity SAR (a first for us, fortunately). What should we do to fix this? A: You should just file one now and keep tracking the customer’s activity for possible future filings. You cannot fix timing. Once something is passed, it is passed. This continuing activity SAR (like all such reports) should reference the previously filed SAR — Document Control Number (DCN) and date. The bank should acknowledge the untimeliness in the file somewhere and acknowledge the lateness to the board, perhaps when the SAR filing is reported. The bank also should review its SAR processes to make sure this does not happen again. ECOA. Q: We have an application for a loan to refinance a second mortgage home equity line of credit (HELOC). We are not subject to HMDA. Do we have to collect “government monitoring information” (GMI) for this application? A: Yes, assuming this involves a closed-end loan paying off the open-end HELOC. Regulation B and its Commentary do not make any fine distinctions but merely require the collection of GMI for a new loan secured by the applicant’s primary dwelling that is paying off another credit secured by that dwelling. TISA. Q: I have a quick question regarding disclosing stop-payment fees online. We do hand out our fee schedule any time we open an account for new customers or if anybody asks for a fee schedule. However, we are wondering if we need to disclose stop-payment fees at the time when a customer places the stop-payment online. A: There is no requirement in Regulation DD to disclose the stoppayment fee at the time a stop payment is placed (whether online, by phone or in person). Disclosing the fee on or with the account disclosure when the account is opened satisfies the TISA disclosure requirements. However, notifying the customer as they place a stop payment is more of a UDAAP — unfair, deceptive, or abusive acts or practices — issue, ensuring that the customer is reminded of the cost associated with the action they are taking at the time they are taking it. This is generally seen as a prudent practice and to the benefit of the customer. 14 Community Banker
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