Page 4 of 5 1 2 3 4 5
Thread Options
#2097291 - 09/07/16 06:55 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
CompliantOkie Offline
Gold Star
CompliantOkie
Joined: Dec 2013
Posts: 422
OOOOOOklahoma
Right. We would only be disclosing to covered borrowers but not all the loans would be covered. I had to think about that too! And I had forgotten about the right of setoff though I'm not sure that's entirely clearly prohibited unless I missed something in the Q&A.

Return to Top
Lending to Servicemembers (SCRA, JWNDAA), War, Terrorism
#2097295 - 09/07/16 06:59 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. RR Joker
RR Becca Offline
Power Poster
RR Becca
Joined: Sep 2004
Posts: 5,245
out of the frying pan...
Originally Posted By RR Joker
The reason I feel negative equity would be 'cash out' is the same way as I would consider loaning them more to payout that same 'negative equity' remaining on a loan, or paying off any other loan within that transaction as being 'cash out'.


That makes more sense to me than considering negative equity as a term of the purchase.
_________________________
You call it ADD. I call it multi-tasking.

Return to Top
#2097303 - 09/07/16 07:11 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Yeah...the dealer will often include it simply to make the sale work...but it's not a 'part of' the purchase...it's more of a 'negative concession' of sorts. Now, there could be a loophole in there if there is not a huge [obvious] negative equity and the dealer 'agrees' to just add it to the price and pays the lender off after the deal is done.\

Unless they put forth strict disclosure/accounting/itemization rules out there on non-banks then "where there is a will there will end up a way" will be happening. smirk
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#2097306 - 09/07/16 07:21 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Just curious. When would this ever be okay? [or is it maybe because of overdraft LOC's?] Why wouldn't it typically always be prohibited by Federal Law (Reg E)?

Require an electronic fund transfer to repay a consumer credit transaction, unless otherwise prohibited by law;
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#2097320 - 09/07/16 07:43 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
CompliantOkie Offline
Gold Star
CompliantOkie
Joined: Dec 2013
Posts: 422
OOOOOOklahoma
I've wondered that too. Perhaps payday lenders can require eft for repayment?

Return to Top
#2097394 - 09/08/16 01:13 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,333
Sorry for my ignorance, but would someone please define the term "negative equity?" This is a new term for me.
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#2097401 - 09/08/16 01:29 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. swiggles
Cornfed Turtle Offline
Diamond Poster
Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
Your liability exceeds the value of the asset. I'm trading in a car worth $3,000 but I owe $4,000. I have $1,000 in negative equity that has to be paid from somewhere. Rolling it into the new car loan is one option.

Return to Top
#2097407 - 09/08/16 01:36 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
CompliantOkie Offline
Gold Star
CompliantOkie
Joined: Dec 2013
Posts: 422
OOOOOOklahoma
Negative equity is rolling the balance from a previous loan into the new loan. If you trade in your car and the dealer gives you less than your owe on the note and they allow you to roll that remaining balance into the loan for the new car.
Last edited by CompliantOkie; 09/08/16 01:37 PM. Reason: Corny was too fast
Return to Top
#2097409 - 09/08/16 01:41 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. CompliantOkie
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,333
Quote:
I'll never talk management into giving up right of setoff for everybody. They're already having ducks about it for the military folks.


Wait! I thought that we still have setoff rights? Where are you reading that?
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#2097410 - 09/08/16 01:43 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Unless something changed, I can tell you that WK has made NUMEROUS changes to the deposit side of things due to this...so I'm thinking we don't have rights...I even saw something about partnership accounts affected...but haven't had a change to dive into all of that. crazy yet..
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#2097411 - 09/08/16 01:45 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. swiggles
RR Becca Offline
Power Poster
RR Becca
Joined: Sep 2004
Posts: 5,245
out of the frying pan...
Originally Posted By swiggles
Quote:
I'll never talk management into giving up right of setoff for everybody. They're already having ducks about it for the military folks.


Wait! I thought that we still have setoff rights? Where are you reading that?


Well, if you look farther up in this thread you'll see that I thought the Q&A said we could still have setoff, but John said he did not. I sent it to bank counsel and have not yet heard back, but D+H (LaserPro) are taking the stance that we do not. They've written in suppression for setoff language on all MLA covered loans.
_________________________
You call it ADD. I call it multi-tasking.

Return to Top
#2097412 - 09/08/16 01:48 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. swiggles
Cornfed Turtle Offline
Diamond Poster
Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
Couple of things:

1. Ah! I thought we could use setoff, too.

2. I've never been called too fast before! smile

3. My boss just asked if I knew if we are planning on sending "the notices to all customers." Can anyone enlighten me? I really hated saying "What notices?"

Return to Top
#2097453 - 09/08/16 02:42 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
HRH Okie Banker Offline
Power Poster
Joined: Jan 2003
Posts: 3,070
Oklahoma
Corny - I don't remember ever hearing about "sending out notices to all customers". I hope your boss dreamed that part. Anyone?
_________________________
Just working here until I get my letter from Hogwarts.

Return to Top
#2097456 - 09/08/16 02:45 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
CompliantOkie Offline
Gold Star
CompliantOkie
Joined: Dec 2013
Posts: 422
OOOOOOklahoma
Maybe your boss meant providing the disclosure to all borrowers regardless of their coverage?

Return to Top
#2097460 - 09/08/16 02:47 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
RR Becca Offline
Power Poster
RR Becca
Joined: Sep 2004
Posts: 5,245
out of the frying pan...
I'm with you, Corn - what notices?
_________________________
You call it ADD. I call it multi-tasking.

Return to Top
#2097462 - 09/08/16 02:49 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. HRH Okie Banker
Cornfed Turtle Offline
Diamond Poster
Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
Turns out this came from the vendor that is selling us new deposit docs so that we are "in compliance and avoiding lawsuits." They want to do an update for deposit recon (that we are good on already) something about UDAAP and MLA compliance. His questions was whether or not we were doing the update and whether or not we were disclosing to all depositors - - so that everyone has the same account agreement.

Return to Top
#2097536 - 09/08/16 06:47 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
Christine81 Offline
Member
Joined: Mar 2011
Posts: 78
In regards to Q&A #10:

“ The provision permits a creditor to use its own method to assess covered borrower status, and it provides a safe harbor to a creditor that employs either of two available methods: Using information obtained directly or indirectly from the DMDC database; or obtaining a consumer report from a nationwide consumer reporting
agency (or a reseller of the same) containing a statement, code, or similar indicator describing that status. To benefit from the safe harbor provision, a creditor must determine a consumer’s covered borrower status at or before the time of the transaction or the time an account is established and make a record of the determination. Section 232.5(b)(2)(B) prohibits a creditor from accessing the DMDC database after the time a consumer entered into a transaction or established an account for
a specific purpose, namely ‘‘to ascertain whether a consumer had been a covered borrower as of the date of that transaction or as of the date that account
was established.’’

Does this give us safe harbor, if we check the data base prior to the loan “account” being established, ie loan consummation, rather than the initial language of date of application or 30 days prior?

Return to Top
#2097571 - 09/08/16 08:43 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. Christine81
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,333
Quote:
Does this give us safe harbor, if we check the data base prior to the loan “account” being established, ie loan consummation, rather than the initial language of date of application or 30 days prior?


I think it does.

But this was NOT the opinion of the presenter of an MLA webinar I listened to.
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#2097759 - 09/09/16 06:54 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. swiggles
Christine81 Offline
Member
Joined: Mar 2011
Posts: 78
I have listened to two MLA Webinars and that was not their opinion either, which is what makes me concerned. Thanks Swiggles.

Return to Top
#2099002 - 09/16/16 09:20 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
HMS Pippii Offline
Diamond Poster
HMS Pippii
Joined: Apr 2003
Posts: 1,636
snorkeling in warm, clear wate...
Is anybody aware of a prohibition against checking military status periodically on credit cards and ODLOCs after the determination has been made that we've got a covered borrower? We're checking upfront on new accounts using Transunion to correctly ID covered borrowers on new accounts. We know we have a lot of covered borrowers (military bank) - I was just asked how we identify covered borrowers after the fact with 100% certainty.

The way I'm reading it, the historic lookback prohibition means we don't have to check our current customer base, but if we want to identify formerly covered borrowers that are no longer subject to MLA and remove MLA coverage from their accounts, is that a problem or is it a case of once covered, always covered?
_________________________
CRCM|CAMS

Return to Top
#2099010 - 09/16/16 10:49 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
GuitarDude Offline
Power Poster
GuitarDude
Joined: Nov 2004
Posts: 5,924
So Cal
Pippii, I also read that section to mean that we are not to check our current customer base (MLA will not apply to credit originated prior to 10/2/16 anyway, unless covered by prior rule), but we are also not to check customers after origination to determine whether they were covered at the time of origination. The question about checking later to determine whether a borrower is still covered does not seem to be specifically addressed. It would seem permissible as the examples in 232.2(a)(2) state that "this part" no longer applies to consumers who are no longer covered borrowers (so it's not "once covered, always covered"). The only way to know that for sure and be able to rely on such information is through one of the safe harbor verifications, so I think very clear procedures should be written to address subsequent verifications.
_________________________
I've just writed a wrong.

Return to Top
#2099100 - 09/19/16 03:26 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
CULady Offline
Gold Star
Joined: Sep 2007
Posts: 493
WA
#10 on the interpretive ruling says: "Therefore, the plain language of the regulation does not prohibit a creditor or assignee from accessing the DMDC database for other purposes, such as determining whether a previously covered borrower retains that status."

We plan on checking monthly or quarterly to determine whether they are still covered borrowers for LOC's and (eventually) credit cards.

Return to Top
#2099817 - 09/21/16 09:06 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
Weeble Woman Online
Junior Member
Joined: Aug 2005
Posts: 27
Washington State
Other than a contract not containing an arbitration clause, can anyone please provide additional information on compliance with 10 USC 987 on other prohibitions? Thank you so much!

Return to Top
#2099935 - 09/22/16 03:01 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
CompliantOkie Offline
Gold Star
CompliantOkie
Joined: Dec 2013
Posts: 422
OOOOOOklahoma
For those of you using the website for verification, will you be maintaining proof of non-coverage in a non-covered borrower's file for the life of the loan?

Return to Top
#2099936 - 09/22/16 03:02 PM Re: Defense publishing FAQ on MLA regulation Aug. 26. John Burnett
raitchjay Online
Power Poster
Joined: Oct 2009
Posts: 8,674
OK
Yes.
_________________________
I'm fixin' to fix that.

Return to Top
Page 4 of 5 1 2 3 4 5

Moderator:  Andy_Z