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#1744926 - 09/27/12 07:04 PM Bonus Paid on Loan Account
Banker Chick Offline
Junior Member
Joined: Jul 2006
Posts: 37
TN
Marketing is considering paying a Bonus to consumer customers on RESPA covered loans if approved. The bonus would not exceed $200 and be paid in the form of a VISA gift card. I don't believe that this violates section 8 rules and is allowed to be paid. Should it be reflected in the settlement statement and are there any reg Z considerations that should be made? If it must be reflected on the settlement statement, how?
Any insight into what is required is helpful! Thanks
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Opinions expressed are my own and do not necessarily reflect those of my employer.

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Lending Compliance
#1744938 - 09/27/12 07:22 PM Re: Bonus Paid on Loan Account Banker Chick
buggs Offline
Power Poster
Joined: May 2005
Posts: 8,487
Wouldn't be easier to give a credit towards closing costs?

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#1744942 - 09/27/12 07:26 PM Re: Bonus Paid on Loan Account buggs
Banker Chick Offline
Junior Member
Joined: Jul 2006
Posts: 37
TN
I would think so but marketing would rather do the gift card. Any thoughts on this method to make it work?
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Opinions expressed are my own and do not necessarily reflect those of my employer.

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#1745078 - 09/28/12 12:26 AM Re: Bonus Paid on Loan Account Banker Chick
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,062
Toano, VA
Section 8's not an issue. It's always OK to give something to the borrower.

See the OSC to Section 1026.18(b) for Reg. Z's rule on payments of this type.
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#1745343 - 09/28/12 07:22 PM Re: Bonus Paid on Loan Account Banker Chick
buggs Offline
Power Poster
Joined: May 2005
Posts: 8,487
I have not dug into the regulation, but it would seem to me the safest thing would be to show the price of the card as a credit to the borrower somewhere on the settlement statement.

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