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No Loan Payment Notices?

Question: 
A loan customer has requested that we not send him loan payment notices. Is there a reg against this or is it left up to the discretion of the bank to allow or not allow. We do not want to grant this request, since customers may become delinquent and bank has somewhat agreed to the customer's request to not send loan payment notices.
Answer: 

Answer from Dan:If you are referring to a monthly statement, then if it's an open-end credit product, you must provide a periodic statement if there is an outstanding balance or there was a credit or debit transaction during the billing cycle. Outside of that, it's a contractual issue or at the bank's discretion. If your contract calls for a monthly statement and you want to honor the request, make sure that you have something in writing from the borrower; otherwise, later down the road he or his attorney could bring up a contract breach as a defense if something goes wrong. If you are referring to a past due notice, we would simply tell the customer if he doesn't want a past due notice then he needs to make sure he has the payment paid on or before the payment due date.

Answer: 

Answer from Andy:As Dan noted you don't have a regulatory requirement to send a billing notice or past due notice, with his exception noted on open-end credit products. Where you may set yourself up for failure is if you combine a notice the customer wants discontinued with some other notice, such as the FCRA notice of furnishing negative information or some other annual notice (Privacy, security reminders, etc.) that then goes undelivered. Also, past due notices are used because they are a cost effective means of collection. Without this you could find yourself calling the customer and not until it is a 30-day account because you don't generally have to call 10-days.

First published on BankersOnline.com 10/11/10

First published on 10/11/2010

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