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#2258616 - 08/24/21 06:49 PM TILA restitution to adher to Interagency guidance?
FSLICBanker Offline
Joined: Apr 2008
Posts: 80
North Carolina
Busy day here in FSLIC Banker-land.

Should Reg Z restitution look-back (review) period coincide with start date of last exam of any type, e.g. S&S, which may have been 18 months prior to compliance exam which noted APR and FC understatements or 3 years to include any loans potentially subject to rescission????

The “Truth in Lending Act: Revised Interagency Examination Procedures” and the “Questions and Answers Regarding Joint Interagency Statement of Policy for Administrative Enforcement of the Truth in Lending Act— Reimbursement” which provide guidance on APR and Finance Charge restitution issues define a ‘‘Corrective Action Period’’ as a time frame for determining which loans may be subject to adjustment/restitution when APR and/or FC understatements are noted by a regulatory agency during the course of an examination. The Interagency guidance seems to be clear in stating that an examination of any type conducted immediately prior to the current examination, including examinations in which no review of compliance with Regulation Z or the Act is conducted, meets the definition of an examination. This includes Safety & Soundness, Trust and Information Technology (IT) examinations.

So folks, would you follow the specific written dates in the ROE as to the look-back period which would be about 18 months or would you follow an oral suggestion provided in an informal conversation to extend the restitution review to a 3-year period?

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Lending Compliance
#2258640 - 08/25/21 04:32 AM Re: TILA restitution to adher to Interagency guidance? FSLICBanker
Richard Insley Offline
Power Poster
Richard Insley
Joined: Oct 2000
Posts: 9,987
Toano, VA
When dealing with your federal regulator, I would follow the agency's instructions in the ROE or transmittal letter, UNLESS those instructions are at odds with the revised (9/8/98) Interagency statement of policy published in the Federal Register here: Skip to the third column of the second page and begin reading at "The Corrective Action Period." What you will find is a change in the agencies' policy that resulted from litigation forcing the regulators to look back no farther than the most recent examination of any kind.

But that's not all...

Meeting your regulator's minimum enforcement demands will not necessarily shield you from civil liability under 15 U.S. Code § 1640.

And finally...

If the loans in question were sold to an investor, you are obligated by contract to follow the investor's instructions for remedial action. These instructions may cause you to look back farther and allow little or no tolerance for errors.
...gone fishing.

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