Let me re-state, the floor may not be known at the time of application when the disclosure is required to be given.
It is my understanding that the factors in determining the floor include things like Loan-to-value and debt-to-income ratios. I did not mean to imply we would have no fair lending issues in doing this. Certainly the potential is there, but it's there in every loan we do and we've looked at the risks of doing this.
In a perfect world I'd have two program disclosures - one with a 5% floor and one with a 6% floor. The reality is though, that no matter how much you train your staff and monitor the situation, making the staff choose which disclosure to use leaves a lot bigger hole IMO for non-compliance than the fair lending issue or providing a dislosure at 6% and writing some loans at 5%. Yes, I know it's not perfect, but what we do everyday isn't perfect or we'd all be more crazy than we already are.
I guess I was looking for some other suggestions or ideas short of having to make available two identical disclosures other than the floor rate and leaving it up to the staff to choose. Yes, I know they are trained and need to be held accountable, etc, but the fact of the matter is, there are other higher risk areas (flood, cra/hmda data integrity, finance charge calculations) where the constant preaching is more necessary.
I hope my tone doesn't come across in a bad way...I'm just trying to make a risk decision and looking for some support. I do appreciate the feedback