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#1365760 - 03/29/10 08:35 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Sheldon Hendrix
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Platinum Poster
Joined: Jul 2001
Posts: 708
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Why oh why would we want to make a $2000 loan to someone, when the disclosures basically tell the consumer not to go with us because there is a better deal down the street (vis FAFSA). Can anyone tell me how much money a bank makes on a $2000 loan anyways? Then to throw in all this disclosure madness? Certifications, rights of recission, etc. etc. etc.????
Is anybody else on board with me to just not do these loans? I thought in all my years of compliance I would never recommend to NOT do a certain loan product because of regulatory BS, but I think the time has finally come.
OK my rant is over. Thanks.
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#1365790 - 03/29/10 08:59 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
vlg
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Member
Joined: May 2003
Posts: 74
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The text in the orginal proposal stated does not include open-end credit or any loan that is secured by real property or a dwelling. Is any one relying on the proposal to determine which loans can be excluded form the special rules for education loans?
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#1365800 - 03/29/10 09:10 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Comply 101
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Power Poster
Joined: Aug 2001
Posts: 7,351
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Is anybody else on board with me to just not do these loans? We're not extending any.....wasn't my decision. Management said nuthin' doing. My guess is.....not just my bank, but banks across the nation......no bank will have any, because somehow an education purpose for a loan will just mysteriously never occur....... 
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The more you sweat in training, the less you bleed in battle.......
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#1365999 - 03/30/10 01:09 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Comply 101
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Gold Star
Joined: Oct 2009
Posts: 270
State of Confusion
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Is anybody else on board with me to just not do these loans? I thought in all my years of compliance I would never recommend to NOT do a certain loan product because of regulatory BS, but I think the time has finally come. [/quote]
We are not making them.
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#1368007 - 04/01/10 06:01 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
BLPage
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100 Club
Joined: Oct 2008
Posts: 114
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Does it matter who is taking out the education loan? In reading the regulation, it mentions student or parent, but what if another relative takes out a personal unsecured loan so they can give money to another relative for their tuition? Would that also be considered an education loan? For example, an aunt takes out a $3,000 personal loan so she can gift money to a favorite niece for her college tuition.... In this case, the student is not personally taking out the loan, nor is a parent of the student. Do the requirements of the regulation still apply?
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#1371601 - 04/08/10 09:42 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Insanity Queen
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Junior Member
Joined: Dec 2002
Posts: 31
Missouri
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We use Wolters Kluwer Arta Lending software for our loans. We can acess the approval disclosure and the final disclosure but not the application/solicitation disclosure. When I called Wolters Kluwer, they stated they would not be supporting this disclosure nor supporting loans that were strictly private education loans; only multi-purpose education loans.
The second problem I have is you are required to disclose the bankruptcy limitations and when I spoke to our attorney, he stated that in order to get our loan discharged, he would have to know exactly how much of the loan proceeds were used for education. Therefore, I'm thinking on a multi purpose private education loan, we will need some kind of documentation from the borrower(s)as to how much of the loan proceeds were used for education purposes.
Anyone have any thoughts about these items??????
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#1374247 - 04/14/10 08:33 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Princess Romeo
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Power Poster
Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
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Can the proposed forms be amended to add signature lines? I am looking at the model forms in the reg and there are no lines.
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#1374472 - 04/15/10 02:05 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Book Nerd
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Power Poster
Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
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I contacted one of our regulators about the approval disclosures on multi-purpose applications. I stated that we don't offer "student loans" per se, but under the regulation, we could end up with a HEOA loan. I asked if we could skip the application disclosures, since the application can be used for multiple purposes, and we won't necessarily know up front if the loan is for educational purposes.
He stated that if the application states that the purpose is solely for educational purposes, then we still have to provide the application disclosures. If the loan purpose is broken up between educational and something else, then the application disclosures are not required.
I still don't agree with his answer, and I even quoted the part of the regulation that backed up my interpretation. I'm curious to know if anyone has received a different response from their regulator?
I had a former regulator turned consultant once tell me, never contact your regulator and ask a question unless you already know the answer.
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I'm only responsible for what I say, not for what you understand.
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#1374593 - 04/15/10 03:21 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
DD Regs
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Power Poster
Joined: Aug 2001
Posts: 7,351
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I had a former regulator turned consultant once tell me, never contact your regulator and ask a question unless you already know the answer. That is our stance on the issue. 
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The more you sweat in training, the less you bleed in battle.......
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#1376200 - 04/19/10 02:45 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
BLPage
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Diamond Poster
Joined: Jan 2004
Posts: 1,621
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Vo Tech - post secondary education? Don't have to have a high school diploma, but on the other hand the students there are eligible for govt guaranteed student loans.
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#1376785 - 04/19/10 08:40 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Jaeger Schnitzel
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Gold Star
Joined: Nov 2005
Posts: 315
Oregon
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oh, and Burgess, look at the definitions in 46(b)(1) Covered Educational Institution. It would appear that a vocational school would qualify.
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You keep using that word. I do not think it means what you think it means.
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#1382370 - 04/27/10 07:30 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
BLPage
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New Poster
Joined: Apr 2010
Posts: 1
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Hey BSA Guy, I am with you. There is too much BS to offer these loans.
Does anyone make "account loans"? If so, how are you applying all of this? We haven't had an account loan with this particular purpose yet, but just imagine telling a customer that they have to wait 3 days to get their money! That should go over well.
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#1385077 - 05/03/10 06:56 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
MotherCompliance
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Are ya'll using the Federal School Code List to decide whether Federal funds are available and would meet the requirement for disclosures if we made the loan?
We have one for crop dusting, and some crop dusting educational programs do have Fed loans available...but maybe because they have an affiliation with a covered school?
We're wondering if we can rely on the facts that
1) the school is not affiliated with a covered institution and
2) they themselves are not listed on the federal list
as justification that disclosures would not apply?!?
Just when we figure we won't be doing them...this crops up!
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My opinion only. Not legal advice.
Say you'll haunt me - Stone Sour
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#1385287 - 05/04/10 11:55 AM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Princess Romeo
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Gold Star
Joined: Oct 2009
Posts: 270
State of Confusion
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Any Credit Unions out there using the Open-end Loan Liner agreements? If so, any opinions from CUNA if Loan Liner is exempt because they are "technically" open-end?
(Yeah - and the wackiest open-end loan you'll ever see, but CU's and their members love 'em!) Hey Princess...it's not "technically" open-end...it's "Clopened"!!! We are a CU and we are actually moving off of LoanLiner for our unsecured Lines of Credit. While CUNA is standing behind the open ended concept, we have decided to move to closed for car loans and personal loans.
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#1386640 - 05/06/10 12:08 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
SnuffytheSeal
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100 Club
Joined: Jul 2006
Posts: 149
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The Federal Loan Alternatives Chart on model forms H-18 and H-19 contain a reference to the "Federal Family Education Loan". With the elimination of FFELP starting July 1, 2010, has there been any guidance as to what changes are required/permissible to this section of these forms? Thank you.
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#1397625 - 05/28/10 01:38 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
goingtoexperts
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Power Poster
Joined: Aug 2002
Posts: 3,094
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On a PEL, if a consumer rescinds, do we have to refund fees? (is that what "without penalty" means?)
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#1397634 - 05/28/10 01:52 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
ahou
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Power Poster
Joined: Aug 2002
Posts: 3,094
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Nevermind - I found the answer - the answer is NO.
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Opinions are my own and not of my employer.
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#1400194 - 06/07/10 02:18 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
ahou
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100 Club
Joined: Feb 2008
Posts: 142
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So what are the consequences if a bank makes a PEL but doesn't realize it until after the loan has closed and therefore the disclosures were not given and funds were disbursed the same day the loan closed (no rescission period)?
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