We are a bank and we now have an affiliate that provides mortgage broker services. Our officers are encouraged to refer business to our affiliate by providing the interested party with a business card. They receive no compensation for doing so.

Do we need to provide the Affiliated Business Disclosure when all we are doing is providing is a business card?

If we are supposed to provide the disclosure, does it require a signature? If so, what do we do with it after it is signed? Keep a copy? What do we do with the copy if the customer never follows through with our affiliate?

As you can see I have many questions! Help!

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Do we need to provide the Affiliated Business Disclosure when all we are doing is providing is a business card?

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Yes.

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If we are supposed to provide the disclosure, does it require a signature?

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The model form has an acknowledgement line, so IMO yes.

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What do we do with the copy if the customer never follows through with our affiliate?

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(d) Recordkeeping. Any documents provided pursuant to this section shall be retained for 5 years after the date of execution.

Thank you! I found the five year retention period in the reg after I posted. Wow! That is a long time.....

I'm just wondering how I will manage this. I would be interested to know what others do. Do you have the disclosures sent to a central location for retention? I'm thinking this is the way to go.

Thanks again! I very much appreciate your response!

I have another question. I understand how to handle face-to-face referrals. What about referrals that are made over the phone?

I don't have to deal with AfBAs but I would think a central location would be the right process. Telephone apps, I'll give an opinion and maybe someone else that deals with AfBA will give theirs. I would give a verbal disclosure and then follow up by sending a written disclosure. I would document on the acknowledgment line the disclosure was given by phone on X and paper copy was mailed on X.

dpersfull,

I was considering doing what you said, but my research indicates the timing of the disclosure must be NO LATER than the time that the REFERRAL IS MADE. To me this sounds like you can't even give the name of the company until the disclosure has been made.

I would like to hear from others that deal with AfBAs. How are you dealing with telephone referrals?

Anon,

I don't deal with AfBAs but, if you look at section 3500.15(b)(1)(i) of Regulation X, there is an exception that says that if the lender is making the referral the AfBA disclosure can be provided at the time the good faith estimate is being provided.

Yes, I saw that. I think this would apply if the referring party is also the lender. In this case, we are not the lender -- we are referring the individual to our affiliate, a mortgage broker.

Call your regulator and explain your dilemma and ask for their guidance.

I still think a verbal notice (for telephone referrals) would suffice followed by the written notice. This would be better than none at all and would show you were trying to follow the regulatory intent of informing the applicant about the affiliate relation.

dpersfull,

I think I will do that. Not finding much in my research. Appreciate your assistance!