Required provider relationship

Posted By: AuditorK

Required provider relationship - 09/15/09 02:03 PM

The bank requires the use of a third party settlement service provider (to conduct property searches). One of the two owners of the company that provides this service (an LLC) is also a Board member. The LLC itself does not have any deposit or loan accounts with the bank. The one owner (and Board member) does have loan and deposit accounts with the bank.

Must we list the nature of these relationships - depositor, borrower, director?
Posted By: Dan Persfull

Re: Required provider relationship - 09/15/09 02:14 PM

Quote:
The one owner (and Board member) does have loan and deposit accounts with the bank.

Must we list the nature of these relationships - depositor, borrower, director?


The Director is an "associate". See 3500.15. Be sure to refer to the sections of 2602 that are referenced. Then refer to Appendix D.
Posted By: AuditorK

Re: Required provider relationship - 09/15/09 03:46 PM

So in this case I'd have to list the relationships on the GFE and also provide the Affiliated Business Arrangement disclosure?

Wait a minute...doesn't 3500.7(3) state that the lender may not require the use of the provider if the lender is in an affiliated business relationship with the provider? Isn't that what I have described above?

I'm confused crazy
Posted By: AuditorK

Re: Required provider relationship - 09/15/09 06:25 PM

To rephrase this, can we require borrowers to use XYZ Company for property searches, when one of the owners of XYZ Company is a director of the bank?

If this is allowed, do I need to list this company in the GFE and provide a seperate Affiliated Business Arrangement disclosure?