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#2187928 - 08/03/18 02:02 PM Update on FIN-2018-R002 (BO on Auto Renewal CDs)
jonv Offline
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While it is not quite August 9, 2018, has anyone heard of any updates to FIN-2018-R002 regarding Beneficial Ownership on auto renewal products opened prior to May 2018? I called FinCEN about a week ago and have not heard back.

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#2187935 - 08/03/18 02:22 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
Elwood P. Dowd Offline
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Next to Harvey
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#2188445 - 08/08/18 06:09 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
bcompliance Offline
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#2188465 - 08/08/18 08:02 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
McGruff Offline
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Way to kick the ball about 10 feet down the road....

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#2188467 - 08/08/18 08:12 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
RockChucker, CAMS Offline
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Wow! Really starting to question the credibility of this agency.
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#2188469 - 08/08/18 08:16 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
Valley girl Offline
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Thank you bcompliance!

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#2191980 - 09/07/18 08:42 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
bcompliance Offline
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here is a link to what appears to be an announcement to be made. when I click to view the pdf I'm getting a page not found error https://www.fincen.gov/resources/statute...icial-ownership
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#2191983 - 09/07/18 08:46 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
bcompliance Offline
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#2191985 - 09/07/18 08:50 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
John Burnett Offline
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It's now live, and it is more wonderful than we had hoped.. There is exceptive relief applies to any of the following events occurring on or after May 11, 2018:
  • A rollover of a certificate of deposit (CD) (as defined below);
  • A renewal, modification, or extension of a loan (e.g., setting a later payoff date) that does not require underwriting review and approval;
  • A renewal, modification, or extension of a commercial line of credit or credit card account (e.g., a later payoff date is set) that does not require underwriting review and approval; and
  • A renewal of a safe deposit box rental.
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#2191987 - 09/07/18 08:55 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
BrianC Offline
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Permanent exceptive relief from CD renewals, Loan renewals and modifications that do not have new underwriting and safe deposit renewals.
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#2191996 - 09/07/18 09:29 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
RockChucker, CAMS Offline
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The Country
YeeeHaw!!!! Great way to end a Friday!
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#2191998 - 09/07/18 09:36 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
BrianC Offline
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The pizza is going to taste even better tonight.
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#2192000 - 09/07/18 09:58 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
TryingtoComply Offline
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It sounds great on the surface; however, for institutions that allow deposits/withdrawals during grace periods, I'm not so sure this will apply based on the definition in the Covered Product Descriptions and Characteristics.

All loan renewals at our bank require underwriting and approval, so no relief here for us.

As for safe deposit boxes, I had never intended to obtain a CBO anyway. The rental is ongoing provided the customer pays their rent via an automatic debit from a deposit account.
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#2192004 - 09/07/18 10:44 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
JC (Darth HMDA) Offline
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The CD part is great - there are very few loan products I have ever heard of that just "automatically" renew without some type of underwriting review and approval.

Basically it does nothing for loans. It's something - but not much....
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#2192009 - 09/08/18 03:28 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
John Burnett Offline
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Back in the day we would write inventory purchase loans for seasonal businesses here in tourist country. It was one large note before the start of the season, with 30- or 60-day renewals and reductions and an understood final maturity in the fall. The only underwriting (I don't think we called it that back then) occurred at the front end. That would have fit the exceptive relief to a T.

It does seem that FinCEN made a genuine effort to learn about the business it is trying to control since May. It's really too bad there wasn't more dialogue with the industry during the preliminaries for this rule. I'll lay that at the feet of both FinCEN and the industry.
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#2192018 - 09/09/18 01:54 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
TryingtoComply Offline
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With respect to CDs, I just want to make sure there is no issue if we allow customers to make deposits/withdrawals during the grace period. There is interaction with the customer and an opportunity to collect beneficial ownership information if this occurs.

The definition of a CD for purposes of the rule indicates that if there are no withdrawals without a penalty or deposit during the TERM, the relief applies.

Does anyone see an issue with deposits/withdrawals during the GRACE PERIOD?

As usual, I'm probably over-thinking this.
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#2192058 - 09/10/18 06:30 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
John Burnett Offline
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Cape Cod
I see a problem, since the grace period is part of the next term of the CD. Given the strict wording of the FinCEN definition of a CD for the purpose of exceptive relief, I don't think that you can treat a renewal in which the legal entity customer adds to or withdraws from the CD (possibly excepting interest) as an rollover covered by the exceptive relief.
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#2192087 - 09/10/18 10:57 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
Goodland Offline
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Posts: 35
Don't all loans need approval?

"that does not require underwriting review and approval;"

Or is this indicating "approval" of the underwriting review?

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#2192095 - 09/10/18 11:41 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) John Burnett
TryingtoComply Offline
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John,

Thank you for responding. I too am very concerned about how they defined a CD covered by the rule. As I stated earlier, a withdrawal or deposit will involve interaction with the customer and provide an opportunity to obtain a certification.
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#2192111 - 09/11/18 12:34 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
WIBanker91 Offline
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What is everyone's thoughts about CDs that change term and/or rate at the customer request without closing the CD? We we be covered if we have the "notify" us wording on the BO form?

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#2192130 - 09/11/18 01:50 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
MollyM Offline
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So - is anyone else struggling with how to know when a loan modification, extension or renewal did not require new underwriting? My QA team simply does not have time to read each loan document to find the answers..............
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#2192146 - 09/11/18 02:54 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
Southern Banker Offline
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Posts: 35
I would also like to know if anyone has clear definition of underwriting and approval - Is that approval by the originating loan officer or a higher level of approval? Is just pulling credit and reviewing it considered underwriting?

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#2192153 - 09/11/18 03:13 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) Southern Banker
RVFlyboy Offline
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Originally Posted By Southern Banker
I would also like to know if anyone has clear definition of underwriting and approval - Is that approval by the originating loan officer or a higher level of approval? Is just pulling credit and reviewing it considered underwriting?
See thread recently started here: https://www.bankersonline.com/forum/ubbt...als#Post2192123
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#2192272 - 09/12/18 11:34 AM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
TryingtoComply Offline
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If a CREDIT DECISION is made by anyone at any level before the loan/line is renewed, I would consider that "underwriting and approval."

I wouldn't get to caught up in some complex definition.
Last edited by TryingtoComply; 09/12/18 11:35 AM.
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#2192957 - 09/18/18 05:57 PM Re: Update on FIN-2018-R002 (BO on Auto Renewal CDs) jonv
Bec Offline
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Bec
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The Great White North
The exemption applies to CD rollovers, does this mean only automatic rollovers? I understand that if the CD renews and there is no withdrawal/deposit action, that would most likely be covered by the exemption. My guidance to the team is that if the customer comes in and does anything with it, we should get the certification. Would that be accurate?
What if there is just a rate or term change, say we adjust the rate at renewal (or even during the term) the customer does not come in for that, we are updating a computer screen, would that be considered exempted?
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