Is it acceptable for a Lender to include an actual Rate Lock as one of the items needed for an application to be a "completed" application under Reg B/ECOA? If not locked, not a completed application, so clock not started yet.

How are you going to explain to your regulator/examiner why you have two different application definitions for the same loan? Won't it look odd to issue an LE three business days after receiving a complete application under Reg. Z, but then to send an AAN if the borrower doesn't want to sign a rate lock?

Precisely why I don't like this idea....in discussion with Production about it. I really need some feedback to support my position that this is NOT the way to do this....they want this to be the "procedure", but I don't.

Your production staff is stuck in the old RESPA world, where you could indicate what additional documents are required for an application.

What would be the application date for your loan? The date of the Reg Z application or the Reg B application? Also, which application definition are you going to use for HMDA? Which application date are going to use on the LAR?

I think the real deal for them is that they are trying to do everything within 3 days of the applicant's information being submitted. The Loan Officers do not want to bother with disclosures if the applicant won't lock in the rate. As such, they want to call these "credit application incomplete", send an AAN & close the file. And I am saying that even without a Rate Lock, they have enough information to analyze & make a credit decision. I just do not see how a rate lock has anything to do with this, other than some sort of guarantee (for want of a better word) that the applicant won't go shopping around any more. Once they have that, then they are ok with sending disclosures.

What is your legal authority to require me to lock the interest rate? What if I want to let the rate float and take my chances on a rate drop?

I agree - requiring a borrower to lock the rate, especially if it involves a rate lock fee sounds like a UDAAP to me. The lender locking a rate with an investor is a totally different issue and not related to the borrower.

I agree and thanks for all your advice on this. I think I finally got them to see the light!