Skip to content
Thread Options
#2269482 - 04/21/22 06:49 PM Autopay Required for Settlement Offers
Nicki Davis Offline
New Poster
Joined: Apr 2022
Posts: 1
I wanted to gather some thoughts from this community regarding Regulation E and recurring autopay.

Abundantly aware a bank cannot require borrowers to set up recurring autopay as a condition of a loan.

However, Reg E does not contemplate collections well if the borrower does not honor the payment agreement and goes into a collection status, where the original agreement is modified.

What are the various opinions about a bank that might have a "settlement" program where the original loan is discounted, accruing interest is stopped, but borrowers are required to opt into autopay to take advantage of the offer?

Return to Top
Lending Compliance
#2269574 - 04/23/22 01:23 PM Re: Autopay Required for Settlement Offers Nicki Davis
rlcarey Offline
10K Club
Joined: Jul 2001
Posts: 79,633
Galveston, TX
I would be seriously worried about fair lending rather than Regulation E. Which of your borrowers that are currently in a collection status might still be maintaining a checking or other account that could be auto-debited? Likely, that may fail a prohibited basis effects test.
The opinions expressed here should not be construed to be those of my employer:

Return to Top

Moderator:  Andy_Z