BY LESLIE CALLAWAY, CRCM, CAMS, CAFP, MARK KRUHM, CRCM, CAFP
AND RHONDA CASTANEDA, CRCM
QMy bank is in the process of contracting for Interactive Teller Machines (ITM). They will be used in a dual
function mode meaning that the default is ATM use, but
customers can choose “teller interaction” from 7am–7pm.
Is the teller interaction portion considered an ATM
transaction for Regulation CC purposes? In teller interaction
mode, tellers actually control and complete transactions
(deposits, withdrawals, check cashing, etc.) just as they
would if the customer were to walk in the branch.
My question is whether the bank should classify the
ITM teller deposits as ATM deposits or teller deposits for
purposes of providing hold notices. Under Regulation CC,
for ATM transactions, the funds availability placard suffices,
but for teller mode transactions, must the bank give the
customer a written hold notice when it places a hold on a
deposit?
AThe bank should be able to consider all transactions as ATM transactions with regard to hold notices. The Com-
mentary to §229.16(c) differentiates as follows between depos-
its made at an ATM and those made to a teller with regard to
notices:
For deposits made in person to an employee of the deposi-
tary bank, the notice generally must be given at the time
of the deposit. The notice at the time of the deposit must
be given to the person making the deposit, that is, the
depositor. For other deposits, such as deposits received at
an ATM, lobby deposit box, night depository, through the
mail, or by armored car, notice must be mailed to the cus-
tomer not later than the close of the business day following
the banking day on which the deposit was made.
Thus, immediate notice is required if the deposit is made
“in person to an employee.” The regulation does not define “in
person” so, common usage would apply. It would be hard to
argue that looking at someone in a video, e.g., over Skype, is
seeing them “in person” much as speaking to someone on the
phone is not talking to them “in person.” Since the deposit is
not made “in person to the employee” the alternative timing
for “other deposits” applies. While ITMs are not among the list
of “other deposits,” (they did not exist at the time the regulation
was adopted), that list is not exclusive, just illustrative.
(Response provided 3/2018.)
QMy bank has a customer whose mortgage loan is currently subject to force-placed flood insurance. The
customer has asked and the bank has agreed to refinance
the loan at a lower rate and provide additional cash for
a home remodel. May the bank rely on the force-placed
insurance already in place for the refinance loan? Or must it
require a new policy for the refinanced loan?
AThe bank may rely on the current force-place insurance for the refinance loan and need not require the customer
to purchase another flood insurance policy. See transcript of
the Outlook Live October 2015 Interagency Flood webinar
consumercomplianceoutlook.org/outlook-live/archives/.
Is a lender permitted to increase, renew or extend a designated loan that is currently insured by force-placed
insurance? More specifically, if the borrower is undergoing
a refinance or a loan modification, can the lender use the
existing force-placed insurance to meet the mandatory
purchase requirement?
When a lender is increasing, renewing or extending an
existing loan, the lender is required to provide the Special
Flood Hazard Notice, which details the borrower’s obliga-
