We get the borrower's written authorization to automatically take monthly loan payments from his checking account as required by 1005.10(b). Going forward, when the loan payment changes due to a change in the monthly escrow amount, we send the annual escrow statement that states the new payment amount. Is this enough of a notice to the customer as long as it is 10 days prior to the new payment as required by 1005.10(d)(1)?

Someone suggested we need new written authorization each year.

I believe what you are currently doing complies with the requirements of 1005.10(d). Unless the consumer's authorization includes an ending date, it remains valid until the loan is paid off, the deposit account is closed, the consumer revokes the authorization or something in the authorization (e.g., a provision terminating the authorization if two consecutive transfer attempts fail due to insufficient funds) kills it.

Thanks!