Mortgage Credit- Requiring Deposit Account Prohibited
Answer by Dan Persfull and Andy Zavoina, BOL Gurus Guru Bio
Question: Are there any regulatory restrictions prohibiting a bank from requiring a deposit account as a condition for extending mortgage credit? I'm aware of Reg Z 226.18(r) and can find no other reference, but one of our senior officers insists that he has recently seen some sort of regulatory restriction on this issue.
Answer by Dan Persfull: There is no prohibition for requiring a deposit account as a condition of extending credit. However, you will want to review Reg E's 205.10(e) and its Commentary concerning compulsory use of preauthorized transfers.
Answer by Andy Zavoina:
You may be thinking of the anti-tying restrictions. There are exceptions to the anti-tying restrictions banks must follow. You can require the use of traditional banking services, such as opening a deposit account in order to qualify for a loan. You would not be able to require that the borrower's stock transfers go through your licensed agent, however. That would not be a traditional product a bank would offer. 12 CFR 225.7 is a reference.
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