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#1250168 - 09/15/09 02:03 PM Required provider relationship
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
The bank requires the use of a third party settlement service provider (to conduct property searches). One of the two owners of the company that provides this service (an LLC) is also a Board member. The LLC itself does not have any deposit or loan accounts with the bank. The one owner (and Board member) does have loan and deposit accounts with the bank.

Must we list the nature of these relationships - depositor, borrower, director?

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Lending Compliance
#1250181 - 09/15/09 02:14 PM Re: Required provider relationship AuditorK
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,635
Bloomington, IN
Quote:
The one owner (and Board member) does have loan and deposit accounts with the bank.

Must we list the nature of these relationships - depositor, borrower, director?


The Director is an "associate". See 3500.15. Be sure to refer to the sections of 2602 that are referenced. Then refer to Appendix D.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1250267 - 09/15/09 03:46 PM Re: Required provider relationship Dan Persfull
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
So in this case I'd have to list the relationships on the GFE and also provide the Affiliated Business Arrangement disclosure?

Wait a minute...doesn't 3500.7(3) state that the lender may not require the use of the provider if the lender is in an affiliated business relationship with the provider? Isn't that what I have described above?

I'm confused crazy
Last edited by AuditorK; 09/15/09 05:59 PM.
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#1250359 - 09/15/09 06:25 PM Re: Required provider relationship AuditorK
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
To rephrase this, can we require borrowers to use XYZ Company for property searches, when one of the owners of XYZ Company is a director of the bank?

If this is allowed, do I need to list this company in the GFE and provide a seperate Affiliated Business Arrangement disclosure?

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