Pub. 8 2020 Issue 3

14 The Community Banker www.mibonline.org FALL 2020 By Bill Showalter, Senior Consultant, Young & Associates, Inc. Compliance Q&A 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. EFAA. Q: We have an existing customer who is depositing a large check into their account and we would like to place a five-day hold on the check because the customer does not have the funds on deposit. I was under the impression that we are required to make $5,525 available to them the next business day per Regulation CC. Is this incorrect? Can we hold the entire amount for five business days? A: There are a couple of ways to handle this one. First, suppose the customer deposits the check into their savings account. In that case, that is not subject to Regulation CC, so you would be able to impose pretty much any reasonable hold on the deposit. If deposited into a transaction account (DDA, NOW, etc.), Regula- tion CC does come into play. • Of course, a case-by-case hold is always available to hold the amount over $225 for up to two business days. But, that is limited relief. • Suppose an exception hold (other than large deposit) can be applied (reasonable cause to doubt collectibility, etc.). In that case, the entire deposit may be held until the seventh business day after the banking day of deposit. • If no other exception hold will apply but the large deposit exception, then $225 must still be made available by the first business day after the banking day of deposit. The next $4,800 must be made available by the second business day after the banking day of deposit. Any remaining funds may be held un- til the seventh business day after the banking day of deposit. HMDA. Q: We have a current loan in which a husband and wife are purchasing their current home (buying home from the estate) but cannot qualify for the loan without their son’s income. We are counting the son as a second co-borrower. My question stems from how this should look on the HMDA-LAR. We are currently listing only mom and dad’s HMDA information on the Loan/Ap- plication Register (LAR) but are listing the son’s income on the LAR. Is this correct? It seems odd that we are not including the son’s race, etc. information on the LAR but are using his income. A: As odd as it may seem, that looks like how you should report it. Regulation C says to record/report the income you rely on making your credit decision, without any restrictions related to the source, etc. And, for each of the applicant information categories (race/national origin, sex, age), the HMDA Reference Chart in the Getting It Right guide says, “If there is more than one co-applicant or co-borrower, provide the required information only for the first co-applicant or co-borrower listed on the collection form.” If the parents are listed before the son, it would be their “mon- itoring information” that gets recorded/reported — and the son’s income, if that is what is relied on in making the credit decision. BSA. Q: While completing a Currency Transaction Report (CTR) for amultiple-transaction situation, I realized that one of the with- drawals conducted for one son (aminor) is actuallymade out of an OTMA account (Mom is the custodian). Assuming a Part I is required for theminor, should occupation be listed as “unknown” or “mi- nor”? Should the Formof Identification bemarked “unknown”? A: Part I will be completed for the minor since the OTMA funds are for the child’s benefit; list the child’s occupation as “None —minor.” Some banks identify a parent when they open an account for a minor, so if the bank did that for this account, you would select “Unknown” for the child’s ID. If the bank accepted a birth certificate or Social Security Card for the child when the account was opened, you can select “other” and enter that information. Record Retention. Q: After a loan is paid off, we scan the loan pa- pers from the file and save them to a disk. Currently, we have been storing the actual paper for three years and then shredding it. Since we scan the paperwork and save it to a disk, there is no reason to keep the paper. Am I correct, or am I overlooking something? A: The federal consumer rules allow for record retention in pretty much any form that allows you to retrieve the records readily and