Pub. 8 2020 Issue 4

18 The Community Banker www.mibonline.org WINTER 2021 By Bill Showalter, Senior Consultant, Young & Associates, Inc. Compl iance Q&A TILA. Q: We are doing a mortgage to pay off a land contract. We treat these as refinancings, but we have a lender who prefers not to use a title company. The bank orders the deed and we do a seller-side-only Closing Disclosure (CD). My question is relating to the issue date. The borrowers’ CD will show 12-21-20 for the is- sue with a closing date of 12-24-20 and disbursement of 12-31-20. As to the sellers, should the dates match the CD for our borrow- er? They will not come in till the 31st to get their monies. A: The key dates — “Closing Date” and “Disbursement Date” — on the seller’s CD should match those on the borrower’s/buyer’s CD. The “Date Issued” on each of these documents must reflect when the applicable disclosure is “delivered” to the appropriate consumer/party — e.g., if both are put in the mail the same day, these dates will match; if they are hand-delivered on different dates, the two documents will each reflect when each was hand-delivered (even if after “closing,” in the case of the seller). ECOA. Q: Ifmembers of an LLC (husband andwife) sign individually on a loan (as co-borrowers), is evidence of their intent to apply jointly (e.g., signatures/initials on such a statement) required? I know that if they sign as guarantors, such joint intent evidence is not required. A: Yes, just like some owners/senior officers or their spouses in any other corporation signing as individuals would trigger the requirement. EFTA. Q: If a customer opts into ATM/one-time debit card transactions, we have to deliver a notice or letter to the con- sumer, acknowledging that they have opted for this service. If a customer chooses to opt-out later, are we required to also send a letter or notice at that time acknowledging that they have opted out? If a customer elects to opt-out or is removed from the whole overdraft program, are we required to send a letter acknowledg- ing this? This occasionally happens when we remove someone from the program if they have filed bankruptcy (this is stated in our disclosure as a reason they would not be eligible to be in the program). Occasionally, a customer requests to be removed. We have always provided notice to the customer in these situations where they are removed from the overdraft program. An officer of the bank is questioning if this notice of removal is required even if the customer requests removal. A: No, Regulation E has no requirement for any notice related to a customer opting out of ATM/one-time debit card coverage under an overdraft program. In the confirmation notice sent when someone opts in, the bank may disclose the customer’s right to revoke their consent (but is not required to do so). However, your state law may have some requirement for a notice regarding the end of any banking service, whether initiated by the bank or by the customer. You will need to check with the bank’s legal counsel about any state requirement for such good customer service. Privacy. Q: We received a letter from the Attorney General’s Illinois office (we are based in Ohio but do national lending). They want information about an identity theft case involving a loan application; we discovered the fraud and declined the loan before funding. Do privacy regulations allow us to give out information to a state AG? I know there’s an exception allowing us to give out customer information in instances of elder abuse, but this isn’t an elder abuse case (just garden-variety ID theft). A: There is an exception in Regulation P that allows sharing consumer/customer information in a situation like this. The “Other exceptions” section of Regulation P [§1016.15(a)(7)], the regulation’s requirements to give notice and opt-out, etc. “do not apply when you disclose nonpublic personal information ... [to] comply with Federal, state, or local laws, rules and other applicable legal require- ments” or “[to] comply with a properly authorized civil, criminal, or regulatory investigation, or subpoena or summons by Federal, state, or local authorities.” TISA. Q: May the bank have a link in an online advertisement with “triggering terms” to the required additional TISA disclo- sures. For instance, the bank has an online ad saying, “Earn up to 3.00% APY each statement cycle during the first 12 months of opening your account when you meet our minimum cycle requirements. Click HERE to learn more.” The “HERE” link directs them to the required information. Is this compliant? A: Yes, that would be permitted as long as the “HERE” link takes the viewer directly to the required additional information. This is spelled out in the Official Staff Commentary on Regulation DD at Comment 9 to 12 CFR 1030.8(a).