Most Popular Compliance Content
Credit Scoring for New Accounts
12/01/2003
I would like to know your thoughts and/or concerns on credit scoring at the new accounts desk. Meaning, a customer opens a checking or savings account, the bank pulls a credit report to see if the customer would meet a predetermined criteria for crossselling purposes, for example, overdraft protection. In a nut shell, this is prescreening. My initial concern is that the bank does not have a permissable purpose to obtain a credit report, unless the customer is informed and provides written permission. My second thought is if the customer does not meet the predetermined criteria and is not offered a credit product based on information contained in the report, the bank would be required to provide an adverse action notice. Do you see any additional concerns/prohibitions, or know if this type of practice is acceptable?
Using the FinCEN Information Request List -- ChoicePoint/Bridger
12/01/2003
What is the FinCEN Information Request list?
KYC vs. CIP
12/01/2003
Question: In training sessions, staff has asked me what the difference is between the old Know Your Customer standard and the new Customer Identification Program and why we have to
Pay Attention to Basel?
12/01/2003
The pronouncements by the Basel Committee may seem to be far removed from compliance, but they could affect your work.
Figuring Income When Some Is Tax Exempt
12/01/2003
Does a Tax Service fee have to be included on the TIL disclosure? In a highly reputable banking compliance publication that shall remain unnamed, I recently read an article entitled "Grossing Up Public Assistance Income". In this article it stated "Under ECOA, while making loan approval decisions, banks must not discriminate against applicants who receive public assistance income. Generally this income is exempt from federal income taxation. If the income is exempt from taxation, then before making a loan approval decision, this exempt income needs to be grossedup to a pretax, taxable incomeequivalent amount." The article goes on to say that a "client bank" was written up for not doing this and the examiners also said that this also needed to be spelled out in the bank's loan policies and procedures manual. I've read every word in my Federal Reserve Manual under Regulation B, to include the commentary, and can find no reference to this. In the past, we have always considered this to be a "gross" income since it was not t axed. I have a HMDA related loan that has an sole income source of Social Security Benefits and need to know what my "gross" income figure is. I would appreciate any assistance that you could give me in light of this new information. Thank you in advance for your help.