So, I find out the bank is offering a discount on the interest rate of the loan if you set up an AFT with our bank. So my mind immediately goes to Reg Z and variable rate disclosures, etc. but then they tell me if the person doesn't set up the AFT or cancels it at some point, they don't raise the rate. So, I'm like OK so all a customer has to do is say "Yeah, I'll set up an AFT and they get a discount?" And they say yes.
So, now I am sitting here going besides that being a very stupid thing to do, it is no longer a preferred rate, but is there something else wrong with it? I tried to say to myself it was conditioning the loan on the AFT, but it really isn't. They offer the AFT discount to every customer, so not really a fair lending issue. What am I missing? (Other than why in the world would you do this????)