Hi All,

I believe that the appraisal rules apply to all loans (both consumer and commercial loans), what other regulatory changes affect the commercial side? Looking for any information that I can use to training my commercial loan officers.

I would spend a lot of time focusing on them being able to identify a consumer loan. You will get much more bang for your buck. TIL and RESPA changes will not impact them, but the biggest error on the commercial side is and always has been the failure to recognize a consumer transaction.

Thank you for the advice. Our commercial loan officers only deal with commercial loans, if they do have a consumer loan they refer the customer to a consumer loan officer. So any advice on what to train on the regulatory changes for the commercial loan officers?

Our commercial loan officers only deal with commercial loans..

The point is - or so they (and maybe you) think.........unless of course you are a very unusual bank.

I have heard that 100 times and by reviewing their "commercial" portfolios you find any number of transactions that are consumer transactions in which the bank failed to properly disclose.

For example. Try asking them if all loans for "investment" purposes are commercial.

As far as training on recent changes, the changes to Regulation B are the only CFPB changes that will transcend the consumer/commercial world.

That is a great point. Thank you for your help, I will have to ask my commercial loan officers that question. Thank you for pointing that out.

Perhaps I should start a separate thread for this, but it involves the new Reg B appraisal rule and commercial accounts. If we have a commercial loan that is secured by a commercial property as well as a first on a dwelling, are we required to give the commercial property appraisal to the borrower in addition to the appraisal on the dwelling? I believe the answer is yes as 1002.14(a)(1) refers to providing the applicant a copy of "all appraisals and other valuations...", but I'm not 100% positive. Can someone confirm?

Save you the trouble of setting up another thread:

As is almost always the case, the definitions help you split these hairs. In this reg, the definition of "valuation" (which encompasses appraisals) is buried at the end of section 14, in para. 14(b)(3). I have bolded the key words:

The term "valuation" means any estimate of the value of a dwelling developed in connection with an application for credit.

John, I appreciate the response and I actually did see that definition of valuation. I probably read too much into the regs, because the reason I started to question it is that they state it as "appraisals and other written valuations", which to me means that valuations and appraisals may not be synonymous, so while valuations are certainly only dwelling related, are appraisals? Too far down the wormhole, I know. I'll just stick with ensuring that our commercial dept provides the dwelling related appraisals to applicable customers.

When you see a phrase like "appraisals and other valuations," you can infer that appraisals are valuations. It's like the phrase "apples and other red fruit." It would not make sense to say "apples and other pears" because apples are not pears.

Hi All,

Just want to make sure I got this correct. We are looking forward to the changes in January for appraisals. My commercial department wants to be able to send the appraisal/valuation by email/forwarding the appraisal/valuation onto the customer. (Assumption: the appraisal/valuation rules do apply to the commercial department in this case). So all I need to do for the commercial department is to get something in writing from the commercial customer that they want to receive information by email? I have looked in ESIGN and forms regarding ESIGN, but can only find information regarding consumers. It appears that Commercial customers do not meet the definition of consumers in ESIGN. Or in this case do I have to be fully compliant with ESIGN for the Commercial Department?

Kwagar, we're wrestling with that too. At this point it looks like our Commercial Department will follow the ESign requirements. If it's a consumer (vs. a corporation, LLC, etc.) engaged in a commercial transaction, does that make a difference?

Consumer is defined in E-Sign as follows:

SEC. 106. DEFINITIONS.

For purposes of this title:

(1) CONSUMER.—The term ‘‘consumer’’ means an individual who obtains, through a transaction, products or services which are used primarily for personal, family, or household purposes, and also means the legal representative of such an individual.

Hi All,

I believe that the commercial department does not meet the definition of a consumer (unless they are doing a consumer loan). Well that is my understanding of it. My understanding is that since my commercial department does not meet the definition of a consumer (Unless they are doing a consumer loan); they are not subject to all of the parts of ESIGN. My question becomes, what is required for them to comply with the ESIGN Act? Everything I have read in ESIGN refers to a consumer for all of the hoops stuff anyway. Can I just have a form signed by the commercial customer stating that, they agree to get information by email/electronic means? Would that comply with ESIGN for Commercial customers?

E-Sign does not apply to commercial customers, so I don't understand your question of whether or not it will comply with E-Sign. You would just need an agreement for electronically delivery from a commercial customer.

the commercial department does not meet the definition of a consumer

I am a little confused about this statement. Determining whether a consumer is involved has nothing to do with the department that is doing the loan. I can tell you that most banks say the commercial department does not make consumer loans, but give me five minutes and I bet you I could find one unless you have pretty solid internal controls.