Please see the Commentary below that a CFPB FIG referenced as it applies to the reportable rate spread for approved but not accepted applications. With this in mind, should we be reporting Rate Spread for such approved but not accepted applications…and know the Date Rate Set and APR that help determine it? I looked back at 2018 before exemptions kicked in, and it seems we didn’t report this then either (NA) for approved but not accepted apps (interim LARs that never made it to submission due to partial exemption).

***Please note we may lose our partial exemption status due to the number of originations we had last year and may have this year (greater than 500)...so we are preparing for next year where Rate Spread may become applicable again.

1003.4(a)(12)-7-8

7. Rate spread - scope of requirement. If the covered loan is an assumption, reverse mortgage, a purchased loan, or is not subject to Regulation Z, 12 CFR part 1026, a financial institution complies with § 1003.4(a)(12) by reporting that the requirement is not applicable. If the application did not result in an origination for a reason other than the application was approved but not accepted by the applicant, a financial institution complies with § 1003.4(a)(12) by reporting that the requirement is not applicable. For partially exempt transactions under § 1003.3(d), an insured depository institution or insured credit union is not required to report the rate spread. See § 1003.3(d) and related commentary.

8. Application or preapproval request approved but not accepted. In the case of an application or preapproval request that was approved but not accepted, § 1003.4(a)(12) requires a financial institution to report the applicable rate spread. In such cases, the financial institution would provide early disclosures under Regulation Z, 12 CFR 1026.18 or 1026.37 (for closed-end mortgage loans), or 1026.40 (for open-end lines of credit), but might never provide any subsequent disclosures. In such cases where no subsequent disclosures are provided, a financial institution complies with § 1003.4(a)(12)(i) by relying on the annual percentage rate for the application or preapproval request, as calculated and disclosed pursuant to Regulation Z, 12 CFR 1026.18 or 1026.37 (for closed-end mortgage loans), or 1026.40 (for open-end lines of credit), as applicable. For transactions subject to Regulation C for which no disclosures under Regulation Z are required, a financial institution complies with § 1003.4(a)(12)(i) by reporting that the requirement is not applicable.

You have to report the rate spread for ABNAs. We use the APR disclosed on the LE and the date the LE was issued as the rate set date.

Thanks! I appreciate your incite.

After thought - if you are one of the FIs that issues a CD early in the process then that would be the information you would need to use. IOWs the last disclosure provided to the consumer.