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#420806 - 09/09/05 09:33 PM Complaince Exams
C. Phillips Offline
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Joined: Sep 2005
Posts: 12
In the compliance exam questionaire, what is the question "Do you have loans that are secured by deposit accounts with interest rates less than 5%" getting at? What are they trying to hook you on, does anyone know?

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Lending Compliance
#420807 - 09/09/05 10:00 PM Re: Complaince Exams
#12 Offline
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Joined: Jun 2005
Posts: 1,338
The only thing I can think of is that if you have a loan secured by a deposit account that is earning less than 5%, the "Required Deposit" box in the Fed Box needs to be checked.
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#420808 - 09/09/05 10:02 PM Re: Complaince Exams
RVFlyboy Offline
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Joined: Oct 2000
Posts: 5,983
Soaring over Georgia
Look at 226.18(r) and footnote 45 in Regulation Z.
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#420809 - 09/09/05 10:15 PM Re: Complaince Exams
RVFlyboy Offline
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RVFlyboy
Joined: Oct 2000
Posts: 5,983
Soaring over Georgia
A key distinction here - you are required to check the box (or include the statement if not a standardized TIL disclosure form) even if the required deposit account does not actually secure the loan. For example, if you have a consumer loan policy that requires consumer loan customers maintain a checking or savings account with the bank, and that account pays less than 5% interest, you are required to give the "required deposit" disclosure language in the TIL even though the loan is not secured by the deposit account. I think the questionnaire is worded the way it is because typically the only time banks require a deposit account be maintained as a condition of the loan is when the loan will be secured by the deposit account.
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Jim Bedsole, CRCM, CBA, CFSA, CAFP
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#420810 - 09/09/05 10:21 PM Re: Complaince Exams
Creditcop Offline
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Creditcop
Joined: Sep 2002
Posts: 1,685
Indiana
Oh boy a complaince exam. We just went through one this summer, what fun. Kinda like when the doctor says bend over, this won't hurt.

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#420811 - 09/10/05 02:36 AM Re: Complaince Exams
Patton Offline
Member
Joined: Aug 2005
Posts: 96
Texas
As a former examiner, I agree with those that have already responded.

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#420812 - 09/12/05 02:40 PM Re: Complaince Exams
Anonymous
Unregistered

MagicBanker,

Can I clarify this just a bit more to be sure I've got it correct. What if say "If you choose automatic loan payments from one of our accounts (i.e., checking, savings) we will give you a .25% discount on your rate. Would that trigger the required deposit disclosure? (I don't believe it would).

Thanks for your help.........



Quote:

A key distinction here - you are required to check the box (or include the statement if not a standardized TIL disclosure form) even if the required deposit account does not actually secure the loan. For example, if you have a consumer loan policy that requires consumer loan customers maintain a checking or savings account with the bank, and that account pays less than 5% interest, you are required to give the "required deposit" disclosure language in the TIL even though the loan is not secured by the deposit account. I think the questionnaire is worded the way it is because typically the only time banks require a deposit account be maintained as a condition of the loan is when the loan will be secured by the deposit account.



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#420813 - 09/12/05 07:00 PM Re: Complaince Exams
RVFlyboy Offline
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RVFlyboy
Joined: Oct 2000
Posts: 5,983
Soaring over Georgia
It would not.
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Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions

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