Can a mortgage broker use the term "Federal" as part of their name? We have one in town who decided to use part of our name including "federal". This could confuse our customers. They are also advertising rates without stating the APR.

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They are also advertising rates without stating the APR.

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This is no surprise, given the epedemic level of non-compliance with Reg Z's advertising rules. While developing my RateBoardZ product, I visited hundreds of rate board pages on web sites of banks and other mortgage lenders. I doubt there were 10% who were in full compliance.

I'd say it's borderline. You may want to put a call into the US Attorney General's Office for clarification:

18 USC 709:

Sec. 709. - False advertising or misuse of names to indicate Federal agency



Whoever, except as permitted by the laws of the United States, uses the words ''national'', ''Federal'', ''United States'', ''reserve'', or ''Deposit Insurance'' as part of the business or firm name of a person, corporation, partnership, business trust, association or other business entity engaged in the banking, loan, building and loan, brokerage, factorage, insurance, indemnity, savings or trust business;

You could just send the offender a copy of the statute and see if they get the message.

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You could just send the offender a copy of the statute and see if they get the message

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The problem is finding out who would ENFORCE this against the broker. Perhaps the Dept. of Corporations, or the Dept. of Real Estate? Would you be able to find anyone at the state level who would enfoce this? Perhaps the FTC? I honestly don't know of any concerted effort that is being made to prohibit deceptive advertising or deceptive practices by these types of brokers.

IMHO - this lies at the heart of the problem as to why we have a proliferation of Anti-Predatory lending laws, etc. While we all ponder the finer points of Section 32, and worry about any interpretations of state or local laws, these folks seem to be able to do basically what they want UNTIL such time as they are caught and punished. But really, how often does that happen?

In some states, the Attorney General's office watch them like hawks.

Since this is a Federal law, the US Attorney General should enforce it.

Bonnie: The statute quoted above is a federal criminal statute so the local U.S. Attorney's office would have jurisdiction.

A federal statute was quoted; however, mortgage brokers are typically governed by state law. State laws often have requirements on what brokers can/can not use as a "name". I think an inquiry with state officials would be appropriate.

This Federal Statute would override any local or state law.

And there, in a nutshell, is why we have an uneven playing field with the "rest" of the mortgage industry. No one is sure who regulates these other players, jurisdications are blurred, etc.

IMHO - until the situation of uneven enforcement is addressed, all of the anti-predatory lending laws in the world will not improve the situation, but it will mean fewer and fewer banks will want to even venture too much into the market.

Bonnie for Congress!
Bonnie for Congress!

Sec 709 states "Whomever, except as permitted by the laws of the United States, " uses the words.....

That's the problem...what law of the U.S. spells out who or what is permitted?

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"Whomever, except as permitted by the laws of the United States, "

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Because it does not say "local" laws, I think it is safe to say it does not include state laws. It does leave it wide open for other federal laws to permit it.

You need to read the rest of section 709 to get the flavor, but I don't think you are going to find any Federal law that specifically allows the use of the word "Federal" by a mortgage broker.

Turn them in to the FTC and the state's Attorney General for violating Truth in Lending. Turn them in to all sources listed above for the name violation. Ultimately, DOJ and the state's Attorney General could both act on both issues. The more, the merrier!

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consumers are no longer able to get the services they want from banks.

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Try to find ANYONE doing FHA title I loans. Can you say....HOEPA?

I had to endure a leaky roof for almost a year while my home appreciated in value enough to get a "normal" Home Improvement loan.

When I had to fill out the Govt. Monitoring Information, for Race, I was very tempted to check "OTHER" and indicate "Really Pi%%ed."

Oh, Bonnie, I only wish you could tell us how you really feel.

Would the fact that the Marketing Department at my previous bank claimed my middle name was "Member FDIC" be a violation of this as well. Should I report myself?

Al - as an individual, it is my understanding that you can claim any name you want! Remember that symbol thingy for "The Artist Formerly Known as Prince", although now I understand he went back to "Prince."

However, if you were to start a Sole Proprietorship with the name "Member FDIC", then maybe I could rat you out!

Well you can claim it Bonnie, but to put the name on your ID you have to have a judge approve your new name.

I considered Juan when I was changing my name...because Dawn Juan sounded so nifty

A gentleman in Florida was denied the use of his name (or what he claimed it should be) "God" and I've heard of Santa Clause being rejected here in Alaska. (you think we'd have a couple Santas, heck Jack Frost ran for mayor just recently)

Say this "federal" mortgage broker banks with you! Should you file a SAR?

What crime do you suspect being committed at or through the bank?