Reg B—Equal Credit Reporting Act
QSection 1002.14(a)( 2) of Regulation B (Equal Credit Reporting Act) requires creditors to provide a notice of
the applicant’s right to receive a copy of all written appraisals
developed in connection with an application for credit that
is to be secured by a first lien on a dwelling. My bank does
not take commercial loan applications. Rather, the bank’s
personal financial statement, completed and signed by the
customer, starts the commercial loan process. Does putting
the “Appraisal Notice” on the personal financial statement
satisfy the appraisal disclosure requirement?
ASection 1002.14(a)( 2) of Regulation B requires creditors to provide the notice “not later than the third business day
after the creditor receives an application for credit that is to
be secured by a first lien on a dwelling.” There is nothing in
the Commentary or Supplementary Information to prohibit
creditors from providing the information prior to application.
The regulation merely provides the latest date that it may be
provided.
However, to avoid any customer confusion, any notice
should make clear that it only applies if the loan is to be secured by a first lien on a dwelling. For example, if the loan is to
be secured by a lien on a commercial building or a second lien
on a residence, no notice is required. If you advise customers
they have that right, then you must provide it, even though it is
not required. (Response Provided 10/2017.)
Money Purchase Loans
and the Military Lending Act
QIs a loan made to purchase stock a money purchase loan for Military Lending Act (MLA) purposes?
AIt depends. There are three scenarios: ( 1) A loan to pur- chase stock that is secured by the stock being purchased
is exempt from the MLA. Stock is personal property, and as
such, would be a money purchase loan, which is exempt. ( 2) A
loan to purchase stock but not secured by that stock is a covered loan under the MLA, just like any other unsecured loan.
( 3) A loan secured by stock but not used to purchase the stock
is covered because it is not a purchase money loan, which is
exempt. (Response Provided 10/2017.)
Credit Cards and the Military Lending Act
QDo we need to determine whether authorized signers on credit cards are covered under the Military Lending
Act (MLA)?
ANo, you need not check the database for an authorized us- er. Under Section 232.3(g)( 1) of the regulation, a covered
borrower is someone who is “obligated” on the account. An
authorized user has no obligation to pay. (Response Provided
10/2017.) ■
ABOUT THE AUTHORS
LESLIE CALLAWAY,
CRCM, CAMS,
CAFP, and Director
of Compliance
Outreach and
Have a question? Email compliance@aba.com or call (800) 551-2572.
Answers do not provide, nor are they substitutes for, professional
legal advice.
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