Thread Options
|
#1345329 - 02/18/10 04:35 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Bville
|
Power Poster
Joined: Aug 2001
Posts: 7,364
|
....just my opinion.......I think if you do anything to a pre-existing PEL, it's still a PEL.....disclosures required.
_________________________
The more you sweat in training, the less you bleed in battle.......
|
Return to Top
|
|
|
|
#1345623 - 02/18/10 08:09 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
jmd
|
Power Poster
Joined: Jun 2001
Posts: 8,272
Where the heart is
|
In the case of an application received via the mail, or dropped off, would you need to send an adverse action letter to the customer? Can you decline based on the fact that you do not offer the product? I don't see that you would have any other choice unless you are prepared to provide the required disclosures.
_________________________
CRCM,CAMS Regulations are a poor substitute for ethics. Just sayin'
|
Return to Top
|
|
|
|
#1345638 - 02/18/10 08:17 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
ahou
|
Power Poster
Joined: Jun 2001
Posts: 8,272
Where the heart is
|
So if the loan officer takes an application in-person(interviews & completes) and the consumer states the purpose is to finance tuition or buy books, we don't have to give the application disclosure?
By definition, an "application" disclosure is one that is provided WITH the application that is given to a consumer to fill out. The regulation says that if a lender has an an application form that can be used for multiple purposes, then the Private Education Application disclosure does not have to be provided. It's a small bone that was thrown to us by the Feds for those places that are not specifically targeting student loans. But if you want to go ahead and prepare Application disclosures and provide them for your loan officers along with training on when they must provide these disclosures and when they shouldn’t, I’m not going to get in your way. If you do so, then you will need to follow up and audit to be sure that the loan officers are doing this, and you may wind up with some confused customers who might get these even though they only want to buy a car and are not going to school. Seriously – how often do you think this situation is going to happen? Let’s not over-think this and get carried away.
_________________________
CRCM,CAMS Regulations are a poor substitute for ethics. Just sayin'
|
Return to Top
|
|
|
|
#1352069 - 03/04/10 01:08 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
BLPage
|
Gold Star
Joined: Oct 2009
Posts: 270
State of Confusion
|
I've read some of the legislation --- Staff Commentary is the best to start out with, so ------
Yes, that would apply.FDIC Official Staff Commentary 46(b)(5) Private Education Loans, Para 1....."A private education loan is ..... as well as loans extended to consolidate a consumer's pre-existing private education loans."
In fact, the next paragraph "2. Multiple Purpose Loans, i- Definition and ii-Coverage" confirm that a simple personal loan request, even when only part of the proceeds will go towards postsecondary educational expenses, Is Considered Part Of This Regulation.
Now ---- I have no idea HOW I am going to learn about 'self-certification', Perkins, Stafford, Plus Loan Programs so I can train our loan officers. Any Ideas.....? I'm counting heavily on BOL and a webinar to give it all to me !! We will not be offering higher education loans - if the borrower indicates that that is the purpose, we will deny the loan and offer them (assuming they qualify) a line of credit.
_________________________
Waiter, there's too much pepper in my paprikash
|
Return to Top
|
|
|
|
#1354535 - 03/09/10 07:18 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
SnuffytheSeal
|
100 Club
Joined: Feb 2008
Posts: 142
|
Sorry but I'm still confused on the renewal of an existing loan for student loan purposes. If the bank extends a loan for colleged expenses, would the renewal trigger the new disclosures? In this case, the existing loan would not be replaced with a new loan - just extended.
The commentary to Reg. Z states:
A private education loan is one that is extended expressly for postsecondary educational expenses. The term includes loans extended for postsecondary educational expenses incurred while a student is enrolled in a covered educational institution as well as loans extended to consolidate a consumer's pre-existing private education loans.
Since the bank is not extending a loan to consolidate the existing note, my interpretation is that a renewal would not trigger the new disclosures?
|
Return to Top
|
|
|
|
#1354536 - 03/09/10 07:21 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Valley Girl
|
Power Poster
Joined: Oct 2009
Posts: 9,232
OK
|
I agree with your interpretation.
_________________________
I'm fixin' to fix that.
|
Return to Top
|
|
|
|
#1354586 - 03/09/10 08:26 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
raitchjay
|
100 Club
Joined: Feb 2008
Posts: 142
|
|
Return to Top
|
|
|
|
#1354904 - 03/10/10 02:27 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Valley Girl
|
Member
Joined: Jan 2009
Posts: 75
|
I have read through the postings and what I thought I understood, I have gotten confused. Would someone let me know if they agree with the following: We use multi-purpose applications so no PEL disclosures required. If we receive an application that indicates PEL purpose, we can give adverse action based on not offering that product. If we renew (not replace) an existing PEL loan (as now defined), nothing needs to be done. If we refinance (replace note), then disclosures come into play. Have I simplified it too much and I should start worrying a little more??
|
Return to Top
|
|
|
|
#1355210 - 03/10/10 05:45 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
manylayers
|
Gold Star
Joined: Jun 2007
Posts: 447
New England
|
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?
_________________________
Sometimes the questions are complicated and the answers are simple. - Dr. Suess
|
Return to Top
|
|
|
|
#1355223 - 03/10/10 05:56 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Book Nerd
|
Power Poster
Joined: Aug 2001
Posts: 7,364
|
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? That's why we don't ask our regulator questions.......
_________________________
The more you sweat in training, the less you bleed in battle.......
|
Return to Top
|
|
|
|
#1355237 - 03/10/10 06:12 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
swiggles
|
Power Poster
Joined: Oct 2009
Posts: 9,232
OK
|
I don't agree with your regulator either.
_________________________
I'm fixin' to fix that.
|
Return to Top
|
|
|
|
#1356442 - 03/12/10 05:40 AM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
ramona
|
Power Poster
Joined: Jun 2001
Posts: 8,272
Where the heart is
|
Any thoughts on the following scenario: -an application is received for the purpose of paying off an existing student loan made through a local university and a credit card. Considered a PEL? -The individual is still in school, considered a PEL? -The individual is no longer in school, considered a PEL?
Yes Yes Yes
_________________________
CRCM,CAMS Regulations are a poor substitute for ethics. Just sayin'
|
Return to Top
|
|
|
|
#1356514 - 03/12/10 02:14 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Princess Romeo
|
Member
Joined: Jan 2005
Posts: 81
|
Thought more about this last night...Regarding the last scenario, the individual is no longer in school: If the individual is no longer in school and the purpose is not for "Expenses for postsecondary educational cost of attendance, as defined under Section 472 of the Higher Education Act of 1965" which indicates references to the "student" carrying an academic workload determined by the institution, which throughout the verbiage is referred to as either full-time, half-time, or less than half-time, Reg Z would not apply. Additionally, in order to consummate the loan, it is required to have a Self Certification Form which is defined in 226.48(e) "For a private education loan intended to be used for postsecondary educational expenses of a student while the student is attending an institution of highter education, the creditor shall obtain from the consumer or the institution of higher education, the form developed by the Secretary of Education under section 155 of the Higher Education Act of 1965, signed by the consumer, in written or electronic form, before consummating the private education loan". If the borrower is no longer a student, the self-certification form will not be available, thus the loan could not be consummated. In this case, since the purpose is to payoff a existing student loan and credit card, by a consumer who is no longer in school, it appears the applicability of Section 226.46 of Reg Z does not exist. I seem to overanalyze everything!! Any feedback is appreciated.
|
Return to Top
|
|
|
|
#1357783 - 03/15/10 08:21 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
ramona
|
Diamond Poster
Joined: Jul 2006
Posts: 1,115
Where the Green Grass Grows
|
Regarding the last scenario, the individual is no longer in school: If the individual is no longer in school and the purpose is not for "Expenses for postsecondary educational cost of attendance, ..." That's a nice thought, but it specifically mentions that refinances of previous educational loans, consolidations ARE covered. I think that means, even if they aren't in school anymore. Do we need to disclose the cumulative loan amount for the closing for the additional funds? The way I read the reg. Yes. The full new loan amount would need disclosures.
|
Return to Top
|
|
|
|
#1358279 - 03/16/10 06:13 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
ramona
|
Diamond Poster
Joined: Jul 2006
Posts: 1,115
Where the Green Grass Grows
|
From Reg Z 226.48(4)(e) Self-certification form. For a private education loan intended to be used for the postsecondary educational expenses of a student while the student is attending an institution of higher education, the creditor shall obtain from the consumer or the institution of higher education the form developed by the Secretary of Education under section 155 of the Higher Education Act of 1965, signed by the consumer, in written or electronic form, before consummating the private education loan.
Underlined emphasis is mine. If they aren't enrolled, but they still have student loan debt they want to consolidate or PEL loan they want to refi -- you have to give them disclosures and you wouldn't need the self-certification form.
|
Return to Top
|
|
|
|
#1360780 - 03/19/10 03:24 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Always In Training
|
New Poster
Joined: Jan 2010
Posts: 11
Florence, AL
|
I spoke with our regulators yesterday about the application disclosure issue and was told that since we use a "general loan application" form and not one specifically tailored for a PEL, then the application disclosure is not required, but the approval and final disclosures are.
|
Return to Top
|
|
|
|
#1361820 - 03/22/10 06:10 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Sheldon Hendrix
|
100 Club
Joined: Oct 2004
Posts: 192
New Orleans, La.
|
Rescission question...
Reg. Z definition of a business day says use the general definition. But for purposes of rescission under 226.15, 226.23 and 226.19(a)(1)(ii), 226.19(a)(2), 226.31 and 226.46(d)(4) use the more specific definition.
226.46(d)(4) talks about the receipt of mailed disclosures and when to consider them recieved if mailed.
So am I correct in saying that the rescission period for higher education loans uses the general definition of business day and not the traditional specific definition?
This is also backed up on page 41198 of the federa lregister that includes the "preamble" to the higher ed rules. "The Board is adopting the general definition of 'business day' for all other purposes in 226.46,47 and 48, including for measuring the period of time in which the consumer may cancel the loan.
Has anybody else caught this, or am I totally wrong?
_________________________
Compliance Chick
|
Return to Top
|
|
|
|
#1364344 - 03/25/10 08:55 PM
Re: FRB 3/11 ANPR Reg Z Amend on College Student Loans
Bville
|
Member
Joined: May 2003
Posts: 74
|
I thought I was clear on what types of loans were covered. However, now that this is effective for a month+ I am getting some questions from lenders. I went back to do some research and found this thread. It mentions several places that unsecured lines of credit are not covered. I reread the definitions. 226.46(b)(5)(iii)states and I quote (5) Private education loan means an extension of credit that: (iii) Does not include open-end credit any loan that is not secured by real property or a dwelling; Is this missing a word or two? Plus there is a double negative as published so this seems to say it would apply to real estate secured loans, which I know was not the intent. I tried to find a discussion in the commentary or the background material from the comments to the propoal, but I must be missing it (too late in the day?). Please let me know where or how you determined that the regulation disclosure rules do NOT apply to any loan secured by real estate or a dwelling or to any open end line of credit or to any credit card advance. Thanks.
|
Return to Top
|
|
|
|
|
|