When institutions mail out the early docs, how are you documenting when you mailed them out to comply with the three day window? Are you getting anything signed from the customer saying they received the early docs?

We send a dated cover letter.

You need to demonstrate your system of complying. Keeping a copy of a cover letter or having a checklist showing the date the disclosures were mailed should be sufficient. Getting something signed by the applicants is not always possible or accurate and is a unnecessary burden.

With sending a cover letter, has anyone ever had a auditor ask "Can you prove you mailed it within the three days?" or "a cover letter can be made any time, can you prove it was mailed?"....we have an auditor that would ask these type of questions.

My first response to the auditor might be "can you prove you have a brain?" Sarcasm aside, we have never been asked, but would show where all mail created during the day is picked-up and mailed, and that is in the bank's procedures.

To the auditor, I would reply...I can prove that just as well as I can prove every document in the file was generated on the day it says it was.

If it's an auditor, I just smile and nod and move on. They can only recommend, they cannot dictate. As stated above, there is no reason to place undo burden when no regulatory one exists.

When our lenders mail the disclosures, they retain a copy of the letter. But then, at some point, they require the applicants to sign the disclosures. This is very confusing because the signature date is often well after the 3-day time frame. I don't know if investors require this or not.

MOST compliance requirements don't ask you to PROVE it. They require you to demonstrate a system. For instance, do you keep every TISA, Reg E, Reg CC and Privacy disclosure given to new deposit account customers? Most banks don't. They show the auditor/examiner when/how the computer spits those out and some type of checklist demonstrating they were given.

Do lenders keep the Privacy disclosure given to new customers? How about the Settlement Cost booklet, etc. etc. etc. I would bet not. You demonstrate the system (computer parameters showing it will print). Or you say "when I have this type of loan, I give these." That's all that is required.

When it comes to material disclosures or things that might stop a bank from foreclosure, then prudent banks get evidence. Other than that, most banks don't go through the hassle. As Truffle said "there is no reason to place undo burden when no regulatory one exists".

Swiggles, the eternal battle of signing something that is not required to be signed. It is a proof, but for the most part a huge issue when debating regulators, auditors on when it was delivered.

Agreed!! I wasn't presenting that as a method. I was presenting it as a big fat problem. But I don't rule the roost here.....for now it is what it is. Baby steps....baby steps.

All Reg. Z requires (Section 1026.25) is "evidence of compliance"...not proof of compliance.

I agree with Rocky P. If the docs are mailed and a cover letter is retained, but the signed docs are also in file with a signature and date (a date that is probably not compliant time-wise), there is too much explaining to do. It looks cleaner to simply mail the docs with the cover letter, retain the cover letter and NEVER require the customer to sign and date later on.

That is how I've done it forever and never received any question or criticism for it.

Some of you may not be selling loans to investors. It is often those investors who insist upon acknowledgment signatures on disclosures in their (perhaps misguided, perhaps paranoid) attempt to wring as much compliance risk as possible out of the loans they purchase. So for lenders who sell into that kind of a market, the signatures may simply be a fact of life.

So very true! Investors are a different breed entirely!

I have to admit, as an internal auditor we see some things that shouldn't be done and that leads to suspicions. Try to remember we all work for the same place and be nice to your IAs! Fortunately, at this bank we are kindly received and known for wanting to help get things right, not as brainless distractions.