Bio:
Lucy is Editor of Compliance Action and President of Compliance Resources, Inc., a company offering compliance support and services to banks. She is also a Senior Associate of Paragon Compliance Group, a company dedicated to providing compliance training. She has more than twenty-five years of experience working with regulatory agencies and financial institutions. Her extensive work experience with regulatory agencies includes the Federal Home Loan Bank Board, the Board of Governors of the Federal Reserve System, and the Federal Trade Commission. As the manager of the Compliance Division of the American Bankers Association, she worked directly with several of the association's banker committees and with regulatory agencies to identify compliance priorities, and to produce resources and programs.
Areas of Expertise:
Compliance Action Newsletter
Compliance Consulting
Compliance Seminars
Training the Trainer Materials
Questions Answered
09/22/2003
The question is if a loan should be considered for consumer or commercial purpose for compliance with Reg Z. The borrower is an individual acting as a builder for his soninlaw. He has previously built two homes for himself. His income however is not made as a builder. He works in an unrelated capacity. He is also not making a profit on the construction loan. I think Reg Z would apply to this loan.
09/15/2003
A local law firm has an IOLTA at our bank. During the same banking day, one of the lawyers made three separate cash deposits to the account totaling more than $10,000.00. Our automated system aggregated the deposits, so we know we need to file a CTR. Our problem is this.…the lawyer is not willing to supply the names of the clients on whose behalf he deposited the cash. He says he does not have to supply the names based on attorneyclient privilege. I see his point; however, we need to file a complete and accurate CTR, which means we have to obtain information about the identity of the persons on whose behalf the lawyer was acting. I am seeking any advice you may provide on how we might handle this. Should we refer the lawyer to Administrative Ruling 895 (which addresses this issue) and inform him that he simply must provide the information? OR, is there any other reference we can share with him?
09/15/2003
What are the implications of the bank paying a "finder's fee" to employees of an affiliated securities broker for referrals on mortgage or business accounts (loans/deposits)? What if the affiliate securities broker/dealer paid the "finder's fee" to their employees?
09/15/2003
When opening a business account, if we find that one of the signers is on ChexSystems due to NSF abuse on his/her personal account, are we required to open the account? Can we disclose the information to the owner of the business? What we do currently is refuse to open the account and notify the owner of the account that one of the signers has a record on ChexSystems, but I'm not sure if that is the appropriate way to handle this situation.
09/15/2003
If the borrower cancels the closing, the lender is charged a cancellation fee from the vendor. The fee is not passed to the customer, rather POC(L). Should this fee be disclosed on the HUD1?
09/15/2003
This is in reference to Reg C and HOEPA. Our program that we use for closed end consumer credit has only 1 spot to input the treasury maturity. Are we okay using the 10 year maturity only?
09/15/2003
Is the grantor of a trust required to be given the Truth in Lending disclosures when a loan is made to a trust?
09/15/2003
I have a customer who had a check for $45,000.00 that deposited $22,500.00 in 2 separate checking accounts. A hold is being placed on the funds deposited. My question is, in regards to Reg CC, if we are using the exception hold because the deposit exceeds $5,000.00 is the first $5,000.00 subject to case by case hold criteria in both accounts, or can you choose one of the accounts since both deposits came from one check?
09/08/2003
In regards to the USA PATRIOT Act CIP provisions: For addresses similar to a P.O. box, such as AIM Mail Services, Mailboxes Etc. (now The UPS Store), Pak Mail, Parcel Plus, PostalAnnex, PostNet and others that essentially compete with local post office services (by providing private mailboxes), do banks have any requirement to try to identify these types of addresses? Would we need to request an actual residential address? (In reading the rule and its preamble, these would be considered as business addresses and may constitute compliance. However, these could also be a means for bad people to open an account without providing a true physical address. These companies extend their business street address to customers and assign a box or suite number. The result is an address that cannot be distinguished unless it is listed on a fraud file somewhere.)
09/08/2003
I am not seeing eye to eye with my lenders on the subjects of OFAC and customer identification. Please give me some guidance on the necessity of checking OFAC and the process for identifying loan customers under the US PATRIOT Act. I want them to treat loan customers no differently from deposit customers. I want OFAC checked, I want the customer positively identified.
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