What is your understanding of 32 CFR 232.8(e)(3)?:
(e) The creditor uses a check or other method of access to a deposit, savings, or other financial account maintained by the covered borrower, except that, in connection with a consumer credit transaction with an MAPR consistent with §232.4(b), the creditor may:
(3) If not otherwise prohibited by applicable law, take a security interest in funds deposited after the extension of credit in an account established in connection with the consumer credit transaction.
This is explained further in Q & A #'s 17 and 18 in the Interpretive Rule; however, there seems to be a disagreement in the Compliance community as to what it means to "take a security interest in funds deposited after the extension of credit in an account established in connection with the consumer credit transaction."
Does this mean that the loan has to be a deposit secured loan where the deposit account is established at the same time the loan is made for the lender to take a security interest in the account funds? Or, is a creditor able to take a security interest in any account that the customer has at the institution? If the ability to take the security interest is restricted to deposit secured loans, then is the security interest restricted again to only funds deposited after the loan was made? Such that for the initial deposited funds that established the account would not be included?
Thank you for your time and assistance.