Question of the Week

  • QUESTION: Is the director of an affiliate bound by the extension of credit requirements of Regulation O?


    Regulation O states:

    Extensions of credit to a director of an affiliate of a bank are not subject to sections:

    • 215.4 “General Prohibitions”,
    • 215.6 “Prohibitions on knowingly receiving unauthorized extensions of credit”, and
    • 215.8 “Records of member banks”

    If, the director of the affiliate is excluded, by resolution of the board of directors or by the bylaws of the bank, from participation in major policy making functions of the bank, and the director does not actually participate in such functions.

    Reference: Regulation O: 12 CFR 215.2(d)(2).


  • QUESTION: May a bank rely on an oral or written statement regarding the use of covered loan proceeds with regard to HMDA reporting?


    Yes, a financial institution may rely on the oral or written statement of an applicant regarding the proposed use of covered loan proceeds. For example, a lender could use a check-box or a purpose line on a loan application to determine whether the applicant intends to use covered loan proceeds for home improvement purposes.

    Note: This data field is required for all HMDA reporting institutions.

    Reference: 12 CFR 1003.4(a)(3); Comments 4(a)(3)-1. BCFP Partial Exemptions Interpretive & Procedural Rule published 9/7/18

Question of the Week Archive

  • QUESTION: The bank has started marketing on social media. The bank wants to market deposit accounts. What must the bank be aware of when marketing on social media?

  • QUESTION: A borrower's flood insurance was cancelled. The bank was including the premium payments in the escrow account. Because flood insurance wasn't required by the bank due ot the SFHD, is it the bank's responsibility to replace the insurance?

  • QUESTION: The bank is developing a self-testing program to determine whether all applicants for credit are being treated fairly. Is the bank permitted to collect normally prohibited information to be able to analyze?

  • QUESTION: If the bank has charged off a mortgage loan, is a periodic statement required?

  • QUESTION: Would a landlord that rents a space to a marijuana dispensary be considered a marijuana related business?

  • QUESTION: Do SCRA foreclosure rules apply only to the service member`s primary residence, or do they apply to all loans secured by a mortgage on a residence? Does it matter if the loan is for business purposes?

  • QUESTION: What are key factors to consider when conducting a BSA risk assessment?

  • QUESTION: Does the prohibition, within Regulation O, to pay an overdraft of an executive officer or director apply to an inadvertent overdraft?

  • QUESTION: The bank received for deposit a treasury check that was not endorsed by the payee but was deposited into a joint account of the payee. The person endorsing the check is also on the account. Does this check require next day availability?

  • QUESTION: What are the timing restrictions for a prepaid card under Regulation Z?

  • QUESTION: A customer requested to opt out of information sharing. They are complaining to the bank that because of the opt out, the bank cannot report to the credit bureau on the person. Does Reg P make an exception for reporting to a credit bureau?

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