Compliance Questions & Answers

RESPA section 8 prohibits providing a things of value for settlement services. Providing lower interest rates for the referrals or gift cards would be a violation of a thing of value.

Thing of value includes: includes, without limitation, monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person's expenses, or reduction in credit against an existing obligation.

Reference: 12 CFR 1024.14(d)

In a transaction involving two or more consumers who are granted, extended or otherwise provided credit, the bank must provide a notice to each consumer to satisfy the requirements of 10022.72(a) or (c).

Whether the consumers have the same address or not, the bank must provide a separate notice to each consumer if a notice includes a credit score(s). Each separate notice that includes a credit score(s) must contain only the credit score(s) of the consumer to whom the notice is provided, and not the credit score(s) of the other consumer.

If the consumers have the same address, and the notice does not include a credit score(s), a person may satisfy the requirements by providing a single notice addressed to both consumers.

Reference: 12 CFR 1022.75(c)(2).

Regulation B places restrictions on when a creditor may get a spouse’s signature, including:

Not permitting a spouse’s signature for an applicant who qualifies for individual credit under 1002.7; and Permitting a signature for community property states under 1002.7(d)(5) of the official staff interpretation.

For spousal guarantees Regulation B states: The rules in 1002.7(d) bar a creditor from requiring the signature of a guarantor's spouse just as they bar the creditor from requiring the signature of an applicant's spouse.

For example, although a creditor may require all officers of a closely held corporation to personally guarantee a corporate loan, the creditor may not automatically require that spouses of married officers also sign the guarantee. If an evaluation of the financial circumstances of an officer indicates that an additional signature is necessary, however, the creditor may require the signature of another person in appropriate circumstances in accordance with 1002.7(d)(2).

Reference: Official Staff Interpretation 1002.7(d)(6).

Regulation E change in terms timing requires change in terms to be mailed at least calendar 21 days before the change, and Regulation DD requires the change in terms to be mailed at least calendar 30 days before the change. In order to meet the requirements for notification of a change in terms, the change in terms may be sent under the Regulation E timing requirements and will be considered in compliance for Regulation DD.

Referrence: Regulation DD: 12 CFR 1030.3(c)

OFAC requires that all blocking and reject reports be submitted in writing. Optional reporting forms and options for electronic filing are available. Blocking and reject reports must contain a copy of the original transfer instructions.

Reference: OFAC FAQs: Sanctions Compliance, Q49.

Under privacy, an institution or its affiliates are prohibited from disclosing a customer’s account number or similar access code for a credit card, deposit, or transaction account to a nonaffiliated third party for use in telemarketing, direct mail marketing, or other marketing through electronic mail.

There are only three exceptions to this prohibition. A financial institution may disclose its customers’ account numbers to:

1. a consumer reporting agency;
2. its agent to market the institution’s own products or services, provided that the agent is not authorized to directly initiate charges to the account; or
3. another participant in a private label credit card or an affinity or similar program involving the institution.

Depending upon the totality of the circumstances, an institution that does not comply with these requirements may be also engaging in UDAAP.

Reference: CFPB Exam Manual V.2 October 2012.