DTI Confidential for Employee?

Posted By: Cielo

DTI Confidential for Employee? - 01/12/22 07:32 PM

Trying to see how others would report (or handle) DTI in the following situation:

- Borrower is an employee of the reporting bank
- Bank policy suggests that the approving loan officer would provide the monthly debts payment to HR due to confidentiality reasons.
- HR would then reference to employee income, and calculate DTI.
- HR does not provide specific DTI, but rather tells the approving loan officer, "DTI is within lending guidelines." (this is due to the LOS providing monthly debts, and one could reverse calculate to determine income).
- Approving loan officer also mentions in the comment log that "DTI is within lending guidelines."

Obviously DTI was used in the credit decision in a general sense, but it's the specific ratio is not disclosed. Would "NA" be appropriate to report, with an explanation of the procedures used?
Posted By: raitchjay

Re: DTI Confidential for Employee? - 01/12/22 07:58 PM

I see nothing in that part of Reg. C that would allow NA when a DTI ratio WAS calculated and WAS relied on. The fact that the DTI is kept secret in your bank doesn't change those facts. The DTI was calculated and it was relied on (according to your post).

ETA: I would additionally add: since the regulation explicitly states that NA is to be reported for income when the borrower is an employee, but does NOT make a similar assertion for DTI, i most certainly wouldn't want to try to assume that they intended it for DTI too.
Posted By: complyorelse

Re: DTI Confidential for Employee? - 06/29/22 06:52 PM

Reviving this thread with a related question. For employee loans, is it a violation to report the income instead of using NA? Pre 2018, "may" was included in the NA option, but "may" is no longer included. Based on this fact, it would seem it could be cited as a violation to report the income.
Posted By: rlcarey

Re: DTI Confidential for Employee? - 06/29/22 07:21 PM

NA is still purely an option