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#1474494 - 12/01/10 06:31 PM Risk Based Pricing Notice on Every Consumer Loan?
complygirl Offline
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midwest
Can we just implement a blanket policy that risk based pricing notices will be disclosed to all consumer borrowers (opposed to using one of the method listed in the rules to determine who gets the notice and who doesn't)? We'd like to do this on all non-RE consumer loans and continue giving out the Notice to Home Loan Applicant and Credit Score Notice on RRE-related loans. Would this practice be in compliance with the new RBPN rules? Thanks.

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#1474518 - 12/01/10 06:47 PM Re: Risk Based Pricing Notice on Every Consumer Loan? complygirl
rlcarey Online
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I orignally thought so, but no. Read the preamble to the final regulations.
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#1474699 - 12/01/10 08:49 PM Re: Risk Based Pricing Notice on Every Consumer Loan? rlcarey
complygirl Offline
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Where can I locate the preamble to the rules? Could someone provide a link?

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#1474716 - 12/01/10 09:04 PM Re: Risk Based Pricing Notice on Every Consumer Loan? complygirl
Ted Dreyer Offline
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Here is the link to the Federal register text: RBP rule

The discussion about not being able to provide the Standard RBP notice to everyone begins on page 2730 and runs over to the next page.

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#1474718 - 12/01/10 09:07 PM Re: Risk Based Pricing Notice on Every Consumer Loan? complygirl
rlcarey Online
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#1474727 - 12/01/10 09:12 PM Re: Risk Based Pricing Notice on Every Consumer Loan? rlcarey
Mary Beth Guard Offline
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Oklahoma City, OK

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#1474739 - 12/01/10 09:22 PM Re: Risk Based Pricing Notice on Every Consumer Loan? rlcarey
Sewanee, CRCM Offline
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TN
However, I believe if you use one of the exception notices, you would provide those to all customers - correct?
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#1474759 - 12/01/10 09:41 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Mary Beth Guard
swiggles Offline
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Originally Posted By: Mary Beth Guard
You beat me to it, Randy!
Randy beats everyone to the punch.....but, but.....I'm certainly NOT complaining!!
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#1474766 - 12/01/10 09:46 PM Re: Risk Based Pricing Notice on Every Consumer Loan? swiggles
Ted Dreyer Offline
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Originally Posted By: swiggles
Originally Posted By: Mary Beth Guard
You beat me to it, Randy!
Randy beats everyone to the punch.....but, but.....I'm certainly NOT complaining!!


Well, not everyone this time - I edged him out by three minutes.

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#1474777 - 12/01/10 09:49 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Sewanee, CRCM
Ted Dreyer Offline
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Originally Posted By: sewanee
However, I believe if you use one of the exception notices, you would provide those to all customers - correct?


Right. One of the advantages of using the exception notices as opposed to the standard RBPN is that you don't have to "do the math" in determining who gets one.

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#1474792 - 12/01/10 10:03 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Ted Dreyer
swiggles Offline
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Originally Posted By: Ted Dreyer
Originally Posted By: swiggles
Originally Posted By: Mary Beth Guard
You beat me to it, Randy!
Randy beats everyone to the punch.....but, but.....I'm certainly NOT complaining!!


Well, not everyone this time - I edged him out by three minutes.
Well, Ted....you rock! laugh
Last edited by swiggles; 12/01/10 10:03 PM.
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#1475019 - 12/02/10 03:53 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Ted Dreyer
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Originally Posted By: Ted Dreyer
Originally Posted By: sewanee
However, I believe if you use one of the exception notices, you would provide those to all customers - correct?


Right. One of the advantages of using the exception notices as opposed to the standard RBPN is that you don't have to "do the math" in determining who gets one.
But this is only for non RE secured loans, correct? On those if we give the Notice to Home Loan Applicant and Credit Score Notice we don't have to worry about the RBPN, right? Just trying to get this straight in my head.

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#1475104 - 12/02/10 05:04 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Truffle Royale
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The RBP requirement applies to both RE and non-RE loans. On loans secured by 1-4 family RE you can choose to either:
1) give the H-1 standard RBP form to those that you have determined should get one and also give the Credit Score and NTHLA disclosures to those that should get them under existing rules; or

2) give the H-3 exception form to everyone (or an H-5 form to those that have no reported credit score).

For all other loans the Credit Score and NTHLA forms are not applicable, so your decision is to either:

1) give the standard H-1 form to those that you determine should get one; or

2) give the H-4 form to everyone (or an H-5 form to those that have no reported credit score).

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#1475149 - 12/02/10 05:35 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Ted Dreyer
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Originally Posted By: Ted Dreyer
The RBP requirement applies to both RE and non-RE loans. On loans secured by 1-4 family RE you can choose to either:
1) give the H-1 standard RBP form to those that you have determined should get one and also give the Credit Score and NTHLA disclosures to those that should get them under existing rules; or

2) give the H-3 exception form to everyone (or an H-5 form to those that have no reported credit score).

Sticking with just RE lending here, I can't give the H-3 and the NTHLA & Credit Score across the board then?

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#1475176 - 12/02/10 05:55 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Truffle Royale
Ted Dreyer Offline
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You don't have to give the Credit Score and NTHLA forms if you give the H-3 exception form because that information is included in the H-3.

If you mean that you can't just give the standard H-1 RBP form to everyone, that's right. It must only be given to those who receive terms that are materially less favorable, not to everyone.

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#1475200 - 12/02/10 06:18 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Ted Dreyer
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Thanks, Ted.

Now, does anyone who has been getting their credit score and NTHLA forms from the cbr know if they'll be switching to the H-3 form?

**whine warning** I'm so tired of chasing my tail trying to keep up with all of these changes! Once I think I know WHAT has to be done, I have to figure out WHO is going to be doing it and WHEN. Without BOL and all of your help, I'd be dead in the water, believe me. Thank you all!

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#1475242 - 12/02/10 06:45 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Truffle Royale
swiggles Offline
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Originally Posted By: Truffle Royale
Thanks, Ted.

Now, does anyone who has been getting their credit score and NTHLA forms from the cbr know if they'll be switching to the H-3 form?

**whine warning** I'm so tired of chasing my tail trying to keep up with all of these changes! Once I think I know WHAT has to be done, I have to figure out WHO is going to be doing it and WHEN. Without BOL and all of your help, I'd be dead in the water, believe me. Thank you all!


Ditto with Truff!!! The stupid regulators write law that sounds feasible and workable on paper but impossible to figure out how to enforce based on systems, procedures, software, etc. They need to visit a bank and take charge of enforcement in order to see how idiotic some of this stuff is.
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#1475246 - 12/02/10 06:46 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Truffle Royale
RR Joker Offline
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I believe they all are, TR.
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#1475247 - 12/02/10 06:47 PM Re: Risk Based Pricing Notice on Every Consumer Loan? RR Joker
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What's becoming more and more disheartening to me is calling my regulator to ask some finite detail regarding something that already exists...and they can't answer me...now THAT is frustration at it's worst!
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#1475304 - 12/02/10 07:21 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Ted Dreyer
Mary Beth Guard Offline
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Oklahoma City, OK
Originally Posted By: Ted Dreyer
Originally Posted By: swiggles
Originally Posted By: Mary Beth Guard
You beat me to it, Randy!
Randy beats everyone to the punch.....but, but.....I'm certainly NOT complaining!!


Well, not everyone this time - I edged him out by three minutes.


You're right! I just saw the post before mine and didn't scroll up. You guys are quick on the draw.

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#1475353 - 12/02/10 07:58 PM Re: Risk Based Pricing Notice on Every Consumer Loan? RR Joker
Sheldon Hendrix Offline
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Originally Posted By: RR joker
What's becoming more and more disheartening to me is calling my regulator to ask some finite detail regarding something that already exists...and they can't answer me...now THAT is frustration at it's worst!


I can't tell you how many times I've called the Fed (because they wrote and interpret a rule), and they say call FDIC because they regulate us. Then I call FDIC, and they say call the Fed. Then eventually somebody says they'll send it to legal, only to get lost in the DC abyss never to return..... Frustrating.

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#1475716 - 12/03/10 03:00 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Sheldon Hendrix
Cornfed Turtle Offline
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"...Somewhere in Middle Americ...
I apologize to everyone who will read this and think "Turtle, you've posted this before!"

I'm looking at Ted's post above ending in 104 and modifying for our shop situation. Here goes:

Residential Loans: We RBP them all! We are doing the H-3 for every RE-loan. The notice is coming with the CBR and we are giving it out as soon as reasonably possible after credit is pulled. There's a CBR pulled on every app. If the loan is denied, the AAN is going out as before with no H-3.

Home Equity: We don't change pricing at all due to credit factors. We are still giving the credit score disclosure/NTHLA for home equity borrowers. It comes with the CBR and the Personal Bankers are handing it out.

Other Consumer: No RBP. No home. No disclosure.

Commercial: Thank God the business loans were excluded!

Any thoughts or corrections are welcomed! I am so tired of thinking about this. And I haven’t read the final appraisal guidelines. (Okay, I’m done complaining now.)

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#1475735 - 12/03/10 03:19 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Cornfed Turtle
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Turtle, I don't particularly agree with your first paragraph. Currently, the NTLHA applies to applications for a RM. I see no exception if the loan is denied. If credit is pulled and a score obtained, the notice is given.

H-3 should work the same way. As soon as reasonably practical. We have a "within 2 days of pulling credit". We will keep the same general timing...regardless of final dispostion of the loan.
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#1475744 - 12/03/10 03:28 PM Re: Risk Based Pricing Notice on Every Consumer Loan? RR Joker
Cornfed Turtle Offline
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"...Somewhere in Middle Americ...
We currently send the NTHLA with the denial. (Probably should have mentioned that!)

There has been talk of including the H-3 with the denial, but I'm for leaving a process alone if we can. We have the same staff send the home equity denials and I would rather not having them choose a disclosure.

Are you thinking we should NTHLA (HE loans) or H-3 (Res Mtg) right after we pull credit? Then we AAN them if we need later?

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#1475810 - 12/03/10 04:15 PM Re: Risk Based Pricing Notice on Every Consumer Loan? Cornfed Turtle
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Yeah, I think that's the simplest way...then you don't have to keep just a NTLHA in your library either. I just can't get past the wording "as soon as practical"...to me, I'd give it...then if you AAN later, you've done everything you need to...what's the harm, right? and besides, it can be helpful to a person who is denied if they want to try and help raise their score.
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