I'm sure we are not the only community bank that has ARM's on the books that have an adjustment period more frequently than one year intervals....

How are banks that have adjustment periods of say, monthly, or daily handling the new ARM notice requirements (speaking specifically to the ongoing notice)?

Are there any exemptions or modification of date rules on when these types of disclosures are to go out?

What real difference is there between the new and old requirements besides timing? You aren't adjusting the payments monthly or daily are you?

Have a look at 12 CFR 1026.20(c)(2), there are specific timing requirements for frequently adjusting ARMs as well as those in existence (prior to 1/10/15) with loan contracts requiring the new rate/payment to be calculated based on an index that's less than 45 days prior to the adjustment date.

Thanks. The payment could change monthly.

I'm feeling very dense about this, but DFA has utterly fried my brain!

I am correct in my understanding that daily- or monthly-ARMS do NOT have get the 1026.20(d) initial adjustment notice? It makes sense that they would not... since none of us have a crystal ball to send a notice 210 days before such an event, but I'm not finding anything that expressly exempts frequently adjusting ARMs (more than every 60 days) from 1026.20(d)'s requirements.

We only have a handful of older loans that even still have this ARM "feature", but I just want to make sure I'm correct in only implementing the 25-120 special timing ongoing notice requirement for them.

Thanks!

The exception to provide an ARM notice for frequently adjusting ARMs only applies to the Subsequent ARM notices (1026.20(c)), not the Initial notice. You'd still need to give that notice and utilize an estimated rate/payment amount if not known at the time you provide it.

If the adjusted payment will be due within 210 days of consummation, you'd have to provide this disclosure at consummation.

Well, that's where I get stuck. We don't know a week from now that Wall Street Journal is going to change, let alone months from now, so how can we possibly give the initial notice 210-240 days in advance of an event we don't know about?!

We aren't making these loans anymore, so the "within consummation" part doesn't apply either... I'm talking about loans made prior to 1/10/14.

Sorry, but something else just occurred to me as well...

We offer employee rates of WSJP + 0%, adjusted daily (well, we used to...) Even if we make those adjusted annually (to allow for proper notice timing), we can no longer say that the rate will rise to WSJP + 1% upon termination, unless it doesn't go up until that anniversary date, right?

Ugh, this stuff makes my brain hurt!!