Bio:
John has been BankersOnline's resident expert for more than 20 years, serving as Executive Editor and frequent presenter in BOL's suite of events.
Burnett joined
BankersOnline in 2004. He is a 1990 honors graduate of the Stonier Graduate School of Banking and is an alumnus of the ABA National Compliance School, where he served on the faculty for several years.
John began his banking career in high school when he started as a teller at a $15 million bank that didn't have account numbers for its checking accounts (he says they actually filed by signature!) He moved to Cape Cod Bank and Trust Company in 1971 and assumed the position of Compliance Officer in 1976. He also served as corporate secretary and secretary of CCBT's Board of Directors, and as clerk of the bank's holding company.
He was a member of the Massachusetts Bankers Association Legal and Regulatory Compliance Committee, and of the American Bankers Association Compliance Executive Committee and NCS/NGCS Advisory Board. He is a regular presenter and participant in BOL Conferences events.
Questions Answered
08/05/2002
I have a question regarding closing an account. Due to increased debit card usage, we realize that we could incur loss from a closed account if a debit card transaction is presented for payment after the account has closed. It is our understanding that we are required to pay the incoming transaction even if the account is closed. Is this correct? Also, what is the industry standard regarding a waiting period to close an account after receiving the request from the account owner, in order to cancel the debit card and allow time for all debit card transactions to clear before releasing the remaining balance in the account? Please advise me on what is an acceptable practice and of any compliance issues.
08/05/2002
How do other banks perform callbacks on Wire Transfers? Is this a requirement?
08/05/2002
Recently I attended the "Avoiding Check Losses" workshop presented by Ken Golliher in Kearney, NE. I told Ken that we pay our checks in check # order. He indicated that if there was not enough money to pay #311 but there was enough to pay #312 and we did not pay it, that this was known as wrongful dishonor. When I returned and discussed this with management at our bank, I was asked what the difference was between paying checks in number order vs paying them largest to smallest. So, I guess my question is, why is it considered "wrongful dishonor" when we pay our checks in number order?
08/05/2002
We are trying to encourage our customer base to use our stand alone drive-up ATM vs. a competitor's ATM located across the street in a convenience store. FYI: We are a small rural community. Customer are clearly going to choose one or the other!! Any ideas?
08/05/2002
A lender that I represent asked me whether the following was a loan that should be excepted for the purposes of truth in lending as an investment loan. The borrower wishes to refinance a condominium unit he owns - no existing lien, full cash out. The unit currently is investment property for him and he has listed the unit on his tax returns as income producing property for the last three years - although the property is currenly empty. However, on his application the reasons he listed for refinancing were largely personal, i.e., replenishing his brokerage account, etc. Therefore, this does not seem to fit neatly within the non-owner occupied rental property exceptions set forth in Truth in Lending. The lender's credit department felt that this was a consumer loan because of the personal nature of the use of the funds. I disagreed.
08/05/2002
If a transfer is conducted through on-line banking product, does the periodic statement requirements (205.9) of Reg E apply?
08/05/2002
With the concern of expired id's, will we have to maintain and track the expiration dates if a cutomer wants to open another account at a later date after the id on record has expired.
08/05/2002
Can a bank offer a corporate savings account? Anything I need to look out for.
08/05/2002
I would like to send a letter to customers age 4065, homeowners, with $30K or more available home equity, children age 1719 in the home. The letter would suggest applying for a home equity LOC to use for possible college tuition expenses. I've been told this violates REG. B because I'm discriminating on the basis of age. Is this true? Our bank advertises the same product in newspapers, newsletters, lobby displays, etc. This is just one part of a larger marketing plan.
08/05/2002
This is a Regulation D question regarding the transfer of funds from a savings (or MMDA) to a transaction account like a "sweep" for overdraft protection. I have always heard that this is one of the types of transfers that does count against the six allowed per statement cycle. However, I just noticed, in 204.2(d)(2), in the portion of the paragraph that describes transactions that do not count against the limits, the following: "an account is not a transaction account by virtue of an arrangement...that permits the transfers of funds from this account to another account of the same depositor at the same institution". This sounds like a typical "sweep" transaction from a savings account to a transaction account. Please explain the difference.
Pages