Reg B Requirements Apply to Renew Existing?

Question:

Do Reg B requirements apply when taking a "new" application to renew an existing loan? If the existing customer has already been identified through CIP and we have address/contact/employment information on file already, does Reg B require that we read the standard application disclosures again at time of renewal and is it a regulatory requirement to update driver license expiration, as well as get all new income information, etc. ? I know we need income information for ability to repay and my understanding is that once they go through the CIP process, we don't have to identify them with each subsequent transaction but in general what are the regulatory requirements on a renewal application?

Answer:

You've got a lot of things on the table with your questions. Let me try to break this down.

Reg B applies to all credit applications and everything involved. The application and notification requirements of Reg B don't care if it's a new loan, refinance, renewal, increase, modification . . . .(etc.)

CIP exempts current customers that you have previously identified.

You use the word "renewal". This is a defined term in the regulatory world, so I'm not certain how you're using it. If you're satisfying and replacing Loan A with Loan B, then everything applies again. If you're keeping Loan A in place and modifying it, then some things apply but many things don't.

You can find a free Real Estate Matrix at our website that can help with these types of questions. Go to "Free Downloads" at the "Resources" page of our website: http://www.bankerscompliance.com/