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#19368 - 06/04/02 02:50 PM
Website applications
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100 Club
Joined: Oct 2001
Posts: 120
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We will soon have applications for all products on our website that can be submitted electronically. We will have a zip code filter in place so that we accept only applications in our trade areas. The customer will still be required to come in the bank to complete the account opening and/or loan closing. We are basically viewing this as a way to have everything ready for the customer when they come in to sign. What disclosures are required since we are not truly approving or declining loans or accounts on the web? Do we still have to post our loan and deposit rates? Since we operate in different markets, different branches have different rates depending on the competition in that area, therefore a rate sheet for the main bank may be different from the rate sheet at a branch 60 miles away. How are other banks handling this?
Thanks for your help!
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#19370 - 06/05/02 02:29 AM
Re: Website applications
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10K Club
Joined: Oct 2000
Posts: 27,750
On the Net
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Change the media and think of what is required if it was faxed to you. That receipt can trigger loan ("Z" and RESPA) disclosures and if it is a deposit, TISA.
You may opt to make some E-Sign/UETA disclosures and get to the point of making some disclosures online, or you may opt to omit some things, such as a property address in RE loans, and keep this in the pre-qual category.
If you want to make the rate disclosures, first they have to be correct. That is a common violation. But your Webmaster should be able to display the correct disclosures based on the applicable locations rates based on ZIP. The problem you may have there is if they search your site some other way and see better rates at another branch they can get to. Whay accept this if I can get "this+1%? For this reason, we have one set of rates for the state.
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AndyZ CRCM My opinions are not necessarily my employers. R+R-R=R+R Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell
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#19371 - 06/05/02 02:00 PM
Re: Website applications
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100 Club
Joined: Oct 2001
Posts: 120
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Thanks for your help! Our sr. mgmt. doesn't want to have to post our rate sheets on line for either type of products, so ya'll are saying that it is not mandatory. I thought that it was required, but here is my point: Who is going to apply for a product when they don't know the rate they are going to be getting? Would it be possible to have an "On-line" rate sheet for products applied for over the internet only?
Thanks again!
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#19373 - 06/05/02 03:44 PM
Re: Website applications
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Joined: Oct 2000
Posts: 40,086
Cape Cod
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Picking up on David's posting -- Even if all you are doing is providing an application that must be printed, completed, and mailed or delivered in person, you may have some disclosure challenges. For example, the HELOC and ARM disclosures mentioned in David's offering will have to be there if you have an application that can be used even in paper form.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#19374 - 06/05/02 07:56 PM
Re: Website applications
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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I disagree with Dave's position about the sequence of events. Consumers don't buy ANYTHING until they know the price. Whenever I see a promotion with a "click, call, mail, etc. to purchase" response device, but no price is mentioned; I automatically assume the price is outrageous and trash the promo. If you want online consumers to give your e-aps a second look, you'll need a rate board page. As in the real world, you will probably need a disclosure that applicants must meet certain requirements to obtain the advertised rates.
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#19376 - 06/05/02 08:27 PM
Re: Website applications
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100 Club
Joined: Oct 2001
Posts: 120
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David - I understand that reasoning from a loan application, but when applying for a deposit product, I can't see why anyone would apply when they don't know what rate they would be getting.
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#19378 - 06/06/02 01:38 AM
Re: Website applications
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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I agree there's a reluctance to post loan rates--probably because of the requirement for a representative repayment amount and the APR, as David mentions, but also because banks are more interested in trying to lure core deposits. Lots of banks (a few in Nebraska follow) and almost all mortgage lenders are posting loan rate boards, however.
http://www.firstnational.com/fnb/
http://www.tieronebank.com/loans/mortgage_loans.html
http://www.abtbank.com/loanrates.html
Recognizing that customers must meet age, location, creditworthiness, and possibly relationship requirements, many banks include notices about the requirements.
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#19382 - 06/06/02 09:30 PM
Re: Website applications
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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The Fed addresses these issues (and the one in Section 226.5a) in the "e-Regs" (2001 updates to the Commentary.) The bottom line is that e-apps must be accompanied by the disclosures in all cases.
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#19385 - 06/07/02 03:04 PM
Re: Website applications
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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You were in good company, Peg E. Lots of banks had "borrowed" this rule for web-apps until the Fed created this special interpretation just for the Internet.
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#19386 - 06/11/02 08:33 PM
Re: Website applications
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Anonymous
Unregistered
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So, technically, since the electronic disclosure regs are "on hold," we can have an on-line application with no disclosures and treat it as a mail-in application, right? (I am not saying I agree with this approach, just that we would not be in violation of any regs. if we had an online mortgage app. without any disclosures).
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#19387 - 06/11/02 08:55 PM
Re: Website applications
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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I wouldn't recommend that approach. One day without warning (like the last time) the Fed may drop another final rule on us and you will be out of compliance.
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#19388 - 06/18/02 03:27 PM
Re: Website applications
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Anonymous
Unregistered
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Where can I find the requirement for a representative payment amount and APR in the regs? I am conducting a review of our bank's web site. We have a range of rates posted for various loan types but no APR or representative payment amount. I need to be able to reference the specific regulation which requires this.
Any assistance in this area would be appreciated.
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#19389 - 06/18/02 03:47 PM
Re: Website applications
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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ยง 226.24(c) and footnote 49. It applies to Web ads for closed-end credit just as it applies to printed ads.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#19390 - 06/18/02 05:09 PM
Re: Website applications
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Anonymous
Unregistered
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Thanks for your help. I can always count on BOL when I need answers.
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