Lender Credit on CD

Posted By: mdog76

Lender Credit on CD - 02/18/20 05:07 PM

Has anyone been told that an "L" or "LC" needs go on a specific title charge line item on the CD if a lender credit is given for a tolerance violation to help the customer clearly identify an lender credit? Example: Title - Lenders Title Policy LC
Posted By: rlcarey

Re: Lender Credit on CD - 02/18/20 05:36 PM

No - there is no provision for that in the regulations.
Posted By: mdog76

Re: Lender Credit on CD - 02/18/20 05:45 PM

Its going to be an examiner recommendation for us.
Posted By: rlcarey

Re: Lender Credit on CD - 02/18/20 06:08 PM

Ask them for the regulatory citation for the recommendation. Tell them you would like a written justification for the recommendation from the field or district office. They are making up rules.
Posted By: Inspector

Re: Lender Credit on CD - 02/18/20 06:34 PM

That is a really bizarre recommendation. I get the "idea" behind it but, as Carey already pointed out, its not contemplated in the regulation and isn't something that is going to add clarity for consumers.

Is this a formal recommendation in your report? If so I would push back. If its not then disagree, or "I will think about it." Examiners are as guilty as the next person in making uninformed comments or suggestions that aren't really meant to be real recommendations.
Posted By: Truffle Royale

Re: Lender Credit on CD - 02/18/20 06:35 PM

What examiner? I've got Feds coming in a couple months and I want to be prepared.
Posted By: mdog76

Re: Lender Credit on CD - 02/18/20 06:57 PM

We haven't had an exit yet but I'm pretty sure something will be said about it. We are FDIC regulated.
Posted By: John Burnett

Re: Lender Credit on CD - 02/18/20 07:15 PM

Comment 38(f)-1:
"38(f) Closing cost details; loan costs.
1. Lender-paid charges and specific lender credits. Charges that are designated as paid by others under § 1026.38(f) and (g), below, may include the letter “L” in parentheses, i.e. “(L),” to the left of the amount in the column to designate those charges paid by the creditor pursuant to the legal obligation between the creditor and consumer."

A key word in that comment is "may." It's not a requirement. And its use is not restricted to specific credits made to cure tolerance violations.
Posted By: Truffle Royale

Re: Lender Credit on CD - 02/18/20 07:34 PM

John, is a tolerance violation, which is what mdog said the credit was for, the same as "... those charges paid by the creditor pursuant to the legal obligation between the creditor and consumer." Does TRID compliance constitute a legal obligation between creditor and consumer?
Posted By: rlcarey

Re: Lender Credit on CD - 02/18/20 07:48 PM

Yes, but that is only if you include the amount in the "Paid by Others" column and not if you include the lender cure in Section J, which I believe is what they saying.