June

06/12/19
Question: I have a quick question related to Regulation D and reserve requirements. If we offer commercial escrow services to hold funds for two or more parties, are these funds held in escrow generally subject to Reg. D?

 

Answer: Yes, escrow funds are specifically included in the definition of "deposits" for purposes of Regulation D: §204.2 Definitions.
For purposes of this part, the following definitions apply unless otherwise specified:

(ii) Money received or held by a depository institution, or the credit given for money or its equivalent received or held by the depository institution in the usual course of business for a special or specific purpose, regardless of the legal relationships established thereby, including escrow funds, funds held as security for securities loaned by the depository institution, funds deposited as advance payment on subscriptions to United States government securities, and funds held to meet its acceptances; 12 CFR § 204.2(a)(1)(ii) https://www.ecfr.gov/cgi-bin/text-idx?SID=8ddd88a51a067ba79f787e95219009c7&mc=true&node=se12.2.204_12&rgn=div8


06/05/19
Question: For examination purposes, should we be logging all changes to our website or just the ones related to compliance?


Answer:
Since the bank's website is generally considered an advertisement and sometimes contains disclosures required by federal regulations, the bank would want to be sure to retain records of the webpages for any applicable retention periods. How long the pages should be kept would generally depend on the regulation that the content of the page falls under. For example, if the page contained an advertisement for deposit accounts, then the bank would want to retain a copy of that webpage for 2 years under Regulation DD.

The bank may also find our Record Retention Schedule helpful here: https://www.compliancealliance.com/find-a-tool/tool/record-retention-schedule-cheat-sheet


May

05/29/19
Question: We have two commercial lines of credit that originated in 2016 but were increased by $200,000 each in 2019. We did not have new disclosures signed, and we simply executed a loan modification for the loan amount increase to both files. Should these increases be reported on the small business LAR for this year or is this just for originations?

 

Answer: Yes, the bank should report in this case because increases are treated as new originations for CRA purposes, as set out in the Guide here:

A3. Institutions must collect and report data on lines of credit in the same way that they provide data on loan originations. Lines of credit are considered originated at the time the line is approved or increased; and an increase is considered a new origination. Generally, the full amount of the credit line is the amount that is considered originated.

Page 12 at https://www.ffiec.gov/cra/pdf/2013_CRA_Guide.pdf


05/22/19
Question: I have spent the afternoon looking for a simple “definition” of what a distressed and underserved community is. I have found bits and pieces, and I have found the updated lists for 2018, but we are undergoing some policy updates, and would like to align our definition with what the FRB and FFIEC define them as, but I am at a loss to find something. Can you help, or point me in the right direction?

Answer: Distressed or underserved communities are designated by the FRB, FDIC, and OCC, based on rates of poverty, unemployment, population loss, population size, density, and dispersion. The bank would need to use the lists for determining if a loan is being made in a distressed or underserved community.

For reference: The distressed lists: https://www.ffiec.gov/cra/distressed.htm

And the CRA:

(iii) Distressed or underserved nonmetropolitan middle-income geographies designated by the Board of Governors of the Federal Reserve System, FDIC, and Office of the Comptroller of the Currency, based on—

(A) Rates of poverty, unemployment, and population loss; or

(B) Population size, density, and dispersion. Activities revitalize and stabilize geographies designated based on population size, density, and dispersion if they help to meet essential community needs, including needs of low- and moderate-income individuals.

https://www.ecfr.gov/cgi-bin/text-idx?SID=56cfb4c0d740d595f464c3db466fd536&mc=true&node=se12.5.345_112&rgn=div8


05/15/19
Question: By what day do we have to file the continuing activity SAR? Is it Day 90 or Day 120?


Answer: The guidance provides that "Financial institutions with SAR requirements may file SARs for continuing activity after a 90 day review with the filing deadline being 120 days after the date of the previously related SAR filing. Financial institutions may also file SARs on continuing activity earlier than the 120 day deadline if the institution believes the activity warrants earlier review by law enforcement." https://www.fincen.gov/sites/default/files/shared/sar_tti_21.pdf (p. 53).

So the review period itself is 90 days, but the filing deadline is 120 days from the last one filed, to include the additional 30 days allowed for filing. It does also say that the bank has the option of filing earlier than the 120 days if it believes that law enforcement should review earlier.

Financial institutions with SAR requirements may file SARs for continuing activity after a 90-day review with the filing deadline being 120 days after the date of the previously related SAR filing. So, for filings where a subject has been identified, the timeline is as follows:

Identification of suspicious activity and subject: Day 0.

Deadline for initial SAR filing: Day 30.

End of 90 day review: Day 120.

Deadline for continuing activity SAR with subject information: Day 150 (120 days from the date of the initial filing on Day 30).

If the activity continues, this timeframe will result in three SARs filed over a 12-month period.


05/08/19
Question: We have a potential borrower who has several buildings we will be taking as collateral. The corner of one building is in a flood zone. We have requested flood insurance covering the entire building. Our borrower stated that his previous lender allowed them to obtain flood insurance on the one unit of the building that has the corner in the flood zone. We disagree with this. Should we receive flood insurance on the entire building?

Answer: That is correct. Under the “one brick rule,” if the bank is taking the entire building as collateral and if even one corner or brick of the building is in the flood zone, the entire building must be covered. There’s not an exception for only securing the percentage of the building that is in the flood zone, unfortunately.

This was discussed in our latest flood webinar:

https://www.compliancealliance.com/news-events/an-in-depth-look-at-flood-insurance-webinar-2019

(a) In general. An FDIC-supervised institution shall not make, increase, extend, or renew any designated loan unless the building or mobile home and any personal property securing the loan is covered by flood insurance for the term of the loan. The amount of insurance must be at least equal to the lesser of the outstanding principal balance of the designated loan or the maximum limit of coverage available for the particular type of property under the Act. Flood insurance coverage under the Act is limited to the building or mobile home and any personal property that secures a loan and not the land itself.

https://www.ecfr.gov/cgi-bin/text-idx?SID=463dc6e6b10404e4021fd57c6eccf410&mc=true&node=se12.5.339_13&rgn=div8


05/01/19
Question: With regard to the FDIC's Part 350 Annual Disclosure Statement rescission, would it only apply to one of our charters or would it apply to the holding company and everything under it as a whole? We are two chartered banks under one holding company.

Answer: The rescission applies to all FDIC supervised bank at the federal level, so in your case, it appears that it would apply to both banks independently, regardless of whether they're both under a holding company:

  ...This Financial Institution Letter applies to all FDIC-supervised institutions, including community institutions....

FDIC: FIL-14-2019: Removal of the FDIC'S Part 350 Annual Disclosure Statement Requirement

www.fdic.gov

Removal of the FDIC's Part 350 Annual Disclosure Statement Requirement Printable Format: FIL-14-2019 - PDF (). Summary: On March 8, 2019, the FDIC Board approved a final rule rescinding and removing Part 350 of the FDIC's regulations, which is entitled Disclosure of Financial and Other Information by FDIC Insured State Nonmember Banks. The FDIC is taking this action to simplify its regulations ...


April

04/24/19
Question: When is the deadline to provide a PMI notice of cancellation/termination?

Answer: Assuming this is subject to the Homeowners Protection Act, the bank has 30 days after the PMI relating to a residential mortgage transaction is canceled or terminated to send out a notice to the borrower, as set out here: https://www.federalreserve.gov/boarddocs/supmanual/cch/hpa.pdf

"Notification upon Cancellation or Termination of PMI Relating to Residential Mortgage Transactions General Requirements Not later than thirty days after PMI relating to a residential mortgage transaction is canceled or terminated, the servicer must notify the borrower in writing that

  • PMI has terminated and the borrower no longer has PMI and
  • No further premiums, payments, or other fees are due or payable by the borrower in connection with PMI."

04/17/19
Question: We escrow for taxes and insurance. This is not an HPML loan nor is flood insurance required in this situation. The taxes, with respect to this loan, are subject to a continual homestead credit that exceeds the tax charge. So, year after year, the amount via escrow that is owed is $0.00. The bank would like to collect a small amount as a cushion in case the taxes increase over the established credit. We don’t necessarily anticipate the taxes to increase, though. Can we do this?

Answer: 12 CFR 1024.17(c)(ii): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1024/17/#c-1-ii  - (1) A lender or servicer (hereafter servicer) shall not require a borrower to deposit into any escrow account, created in connection with a federally related mortgage loan, more than the following amounts:

(ii) Charges during the life of the escrow account. Throughout the life of an escrow account, the servicer may charge the borrower a monthly sum equal to one-twelfth (1/12) of the total annual escrow payments which the servicer reasonably anticipates paying from the account. In addition, the servicer may add an amount to maintain a cushion no greater than one-sixth (1/6) of the estimated total annual payments from the account.


04/10/19
Question: We are selling one of our branches next month. The branch only has one HMDA loan to date. Do we need to report that loan on the HMDA LAR? The bank that is purchasing the branch is not a HMDA-reporting bank.


Answer: Assuming that purchasing this branch will not cause the acquiring back to become a HMDA-reporting bank, then yes, in this instance you'd report any HMDA reportable loans that originated prior to the sale in April.  Any reporting after the sale by the acquiring bank is optional for the remainder of the year.

CFPB HMDA Guide, p. 121 https://files.consumerfinance.gov/f/documents/bcfp_hmda_small-entity-compliance-guide-final_2018-10.pdf

When an institution that is not subject to Regulation C acquires a Branch Office of an institution that is subject to Regulation C but that acquisition does not result in the acquiring institution becoming subject to Regulation C, data collection is required for transactions of the acquired Branch Office that take place prior to the acquisition. Data collection by the acquired Branch Office is optional for transactions taking place in the remainder of the calendar year of the acquisition.


04/03/19
Question: On a business loan where we have personal guarantees, do we have to check MLA on the guarantees, since they are acting as individuals?


Answer:
No, because a business loan is not a covered transaction under the MLA. The MLA applies to "consumer credit" offered to covered borrowers, as those terms are defined in the MLA.

Regarding the applicability of the MLA to guarantors, the Act is not clear as to whether it does apply or does not apply to guarantors. Conservatively, the bank would treat guarantors as if they fall under the scope of the MLA because they are to some extent "obligated on the consumer credit transaction..."

12 CFR § 232.3(g)(1) ("Covered borrower means a consumer who, at the time the consumer becomes obligated on a consumer credit transaction or establishes an account for consumer credit, is a covered member (as defined in paragraph (g)(2) of this section) or a dependent (as defined in paragraph (g)(3) of this section) of a covered member."

12 CFR § 232.3(f)(1) ("Consumer credit means credit offered or extended to a covered borrower primarily for personal, family, or household purposes, and that is: ...")


March

03/27/19
Question: Does the bank have to comply with the appraisal independence requirements even if an appraisal is not required?


Answer:
While not an explicit requirement if the appraisal itself is not required, we advise that the bank should ensure independence in the appraisal ordering process even if the appraisal was not required by the appraisal regulations. Note that the bank should also follow the same independence requirements for evaluations as well. The independence requirements can be found in the Interagency Appraisal and Evaluation Guidelines here: https://www.fdic.gov/regulations/laws/rules/5000-4800.html



03/20/19

Question: We request a tri-merge credit report for each applicant. Our credit decision is relies on the single lowest middle score applicant(s). Can you give guidance on how credit scores would be reported for two or more applicants? Do we report the one score relied on for all applicants, or report the score relied for one applicant and then the other as not applicable?

Answer: The bank would report the credit score that it relied upon in making the decision. From what you described, it sounds like it would be the lowest middle score in this instance. The score would be reported for the applicant or co-applicant and not applicable for the one whose credit score was not used (since it wasn't relied upon in making the credit decision).

To illustrate, assume a transaction involves one applicant and one co-applicant and that the financial institution obtains or creates two credit scores for the applicant and two credit scores for the co-applicant. Assume further that the financial institution relies on a single credit score that is the lowest, highest, most recent, or average of all of the credit scores obtained or created to make the credit decision for the transaction. The financial institution complies with § 1003.4(a)(15) by reporting that credit score and information about the scoring model used for the applicant and reporting that the requirement is not applicable for the first co-applicant or, at the financial institution's discretion, by reporting the data for the first co-applicant and reporting that the requirement is not applicable for the applicant.

Comment 3, 1003.4(a)(15), https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/Interp-4/#4-a-15-Interp-3


03/13/19
Question: We have a commercial customer with a line of credit that they use for working capital. They may also use the line for any other type of business-related expense. So, the commercial borrower used this original line to purchase a rental property. Now, we are paying down the line of credit with the property that was purchased as security. The original line won’t be fully paid down. Is this HMDA-reportable?

 

Answer: No – this is not HMDA-reportable. This is because a commercial-purpose loan is only reportable as a home purchase loan, home improvement loan, or refinance. This situation only possibly implicates “refinance” for HMDA purposes (since there’s no indication that this is a home purchase or home improvement loan). However, this type of transaction does not constitute a “refinance” under HMDA because the new loan is only paying down the existing line of credit, rather than fully satisfying and replacing the line.

(10) A closed-end mortgage loan or open-end line of credit that is or will be made primarily for a business or commercial purpose, unless the closed-end mortgage loan or open-end line of credit is a home improvement loan under § 1003.2(i), a home purchase loan under § 1003.2(j), or a refinancing under § 1003.2(p);
12 CFR 1003.3(c)(10): https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/3/#c-10:
1. Loan or line of credit secured by a lien on unimproved land. Section 1003.3(c)(2) provides that a closed-end mortgage loan or an open-end line of credit secured by a lien on unimproved land is an excluded transaction.

(p) Refinancing means a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower.
12 CFR 1003.2(p) https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/2/#p


03/06/19
Question: We have a question on a loan that is a refinance of a purchase of a second home and is adding funds to pay off personal credit cards. Should be report the HOEPA Status as "Code 3 - NA"?


Answer: Assuming the loan is just secured by the second home and is not also secured by the principal dwelling, then yes, it should be reported as "Code 3 - NA" like you said. The reason for this is that HOEPA only applies to:

...a high-cost mortgage, which is any consumer credit transaction that is secured by the consumer's principal dwelling...

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/32/

 

So the HOEPA rules do not apply to this particular loan and, thus, it would be reported as not applicable for HMDA purposes.

February
02/27/19
Question: For HMDA purposes, would a construction-to-permanent loan be considered a refinance under the Loan Purpose?

Answer: It would actually be considered a home purchase loan under HMDA regardless of whether it is a combined construction to permanent loan or the permanent financing that replaces the temporary construction financing. If it is a construction-only loan to be replaced by permanent financing later, it will be excluded as temporary financing under 1003.3(c)(3).

 

1003.3(c)(3). Construction and permanent financing. A home purchase loan includes both a combined construction/permanent loan or line of credit, and the separate permanent financing that replaces a construction-only loan or line of credit for the same borrower at a later time. A home purchase loan does not include a construction-only loan or line of credit that is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time or that is extended to a person exclusively to construct a dwelling for sale, which are excluded from Regulation C as temporary financing under § 1003.3(c)(3) Comment 3, 1003.2(j), https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/Interp-2/#2-j-Interp-3



02/20/19
Question: I have a HMDA question about construction loans. Our construction loans are 360 months plus 9 months interest. They are construction to perm. The first 9 months are interest only and then the 10th month includes principal &interest. Would we report this on HMDA as an interest-only loan?

 

Answer: If the loan is a single transaction--a construction-to-perm loan (one closing)--our interpretation is that you would report it as having an interest-only feature.  If this was two transactions, a construction-to-perm loan with two closings, then you would only report on the perm portion of the loan.

 

References:

The requirements of this part do not apply to: Temporary Financing...

12 CFR § 1003.3(c)(3) https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/3/#c-3

 

A loan or line of credit is considered temporary financing and excluded under § 1003.3(c)(3) if the loan or line of credit is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time.

Commentary to 12 CFR § 1003.3(c)(3)-1 https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/3/#3-c-3-Interp-1

 

Whether the contractual terms include or would have included any of the following: (ii) Interest-only payments as defined in Regulation Z, 12 CFR 1026.18(s)(7)(iv);

12 CFR § 1003.4(a)(27) https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1003/4/#a-27

 

The term ‘interest-only’ means that, under the terms of the legal obligation, one or more of the periodic payments may be applied solely to accrued interest and not to loan principal; an ‘interest-only loan’ is a loan that permits interest-only payments.

12 CFR § 1026.18(s)(7)(iv) https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/18/#s-7-iv



02/13/19
Question: Do loans made to executive officers have to be preapproved by the board?


Answer: No, unless the general requirement to get preapproval applies (which generally includes extensions over $500,000), the loan must be reported to the board but does not require preapproval. This is because the general prohibitions on insiders (§215.4), including the preapproval provision, and the more specific executive officer provisions (§ 215.5) are related, yet distinct.

 

What this means is that the executive officer may very well need to gain preapproval from the board, but not automatically just because she or he is an executive officer. This being said, the executive officer will need to report the extension to the board in all cases.

 

(b) Prior approval. (1) No member bank may extend credit (which term includes granting a line of credit) to any insider of the bank or insider of its affiliates in an amount that, when aggregated with the amount of all other extensions of credit to that person and to all related interests of that person, exceeds the higher of $25,000 or 5 percent of the member bank's unimpaired capital and unimpaired surplus, unless: (i) The extension of credit has been approved in advance by a majority of the entire board of directors of that bank; and (ii) The interested party has abstained from participating directly or indirectly in the voting.

 

12 CFR § 215.4(b)(1): https://www.ecfr.gov/cgi-bin/text-idx?SID=e05fffd3223a689ff17a3e90755f0aa2&mc=true&node=se12.2.215_14&rgn=div8

(d) Any extension of credit by a member bank to any of its executive officers shall be:

(1) Promptly reported to the member bank's board of directors;

 

12 CFR § 215.5(d)(1): https://www.ecfr.gov/cgi-bin/text-idx?SID=e05fffd3223a689ff17a3e90755f0aa2&mc=true&node=se12.2.215_15&rgn=div8


02/06/19
Question: If we collect personal income from a Guarantor of a Small Business Loan, should we include this loan on our CRA Report and indicate it as a small business loans with gross revenue of less than $1 million if the personal income is under that threshold?

Answer: No--the guarantor's personal income should not factor into whether the loan qualifies as a small business loan. The guarantor's income does not affect the gross revenues of the business.

 

SECTION __.42(a)(4) – 1: When indicating whether a small business borrower had gross annual revenues of $1 million or less, upon what revenues should an institution rely?

 

A1. Generally, an institution should rely on the revenues that it considered in making its credit decision. For example, in the case of affiliated businesses, such as a parent corporation and its subsidiary, if the institution considered the revenues of the entity’s parent or a subsidiary corporation of the parent as well, then the institution would aggregate the revenues of both corporations to determine whether the revenues are $1 million or less. Alternatively, if the institution considered the revenues of only the entity to which the loan is actually extended, the institution should rely solely upon whether gross annual revenues are above or below $1 million for that entity. However, if the institution considered and relied on revenues or income of a cosigner or guarantor that is not an affiliate of the borrower, such as a sole proprietor, the institution should not adjust the borrower’s revenues for reporting purposes.


January



01/30/19

Question: Our bank is acquiring another bank, and once the acquisition is complete, we are going to change our name to the acquired’s name.  The only thing changing from a servicing perspective is the name and address of the bank. Based on this information, are we still required to send out a Notice of Servicing Transfer?  Also, should the other institution be sending out a Notice of Servicing Transfer  as well?


Answer: Yes, the notice would generally be required of both the transferee and transferor servicer as set out here:

 

(i) In general. Except as provided in paragraphs (b)(3)(ii) and (iii) of this section, the transferor servicer shall provide the notice of transfer to the borrower not less than 15 days before the effective date of the transfer of the servicing of the mortgage loan. The transferee servicer shall provide the notice of transfer to the borrower not more than 15 days after the effective date of the transfer. The transferor and transferee servicers may provide a single notice, in which case the notice shall be provided not less than 15 days before the effective date of the transfer of the servicing of the mortgage loan.

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1024/33/#b-3-i

 

Although a single notice on behalf of both could be provided, it is best practice and would be required of your institution anyway since it is the one acquiring and changing names. It also would not be exempt, unfortunately, since the payee name and address are changing:

 

(2) Certain transfers excluded.

(i) The following transfers are not assignments, sales, or transfers of mortgage loan servicing for purposes of this section if there is no change in the payee, address to which payment must be delivered, account number, or amount of payment due:

(A) A transfer between affiliates;

(B) A transfer that results from mergers or acquisitions of servicers or subservicers;

(C) A transfer that occurs between master servicers without changing the subservicer;

https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1024/33/#b-2-i



01/23/19

Question: We have some confusion in regards to using a Closing Disclosure to reset the tolerance on a “0” tolerance item (origination charge) if there is a bona fide Change in Circumstance. On November 8, 2018, the customer requests an increase in the loan amount to $115,000, which is approved since the appraisal would allow for additional funds. The initial Closing Disclosure had not been delivered before this requested Change in Circumstance. The processor prepares an initial Closing Disclosure using a loan amount of $115,000 and shows the increased origination charge and a closing date of November 19, 2018. This was given to the borrower in person. My question is, since there was adequate time before the closing date of November 19, 2018, should we have not issued a new Loan Estimate on November 8, 2018 showing the increased loan amount and origination charge since the CD did not have to go out on November 8, 2018?

Answer: Under the recent "black hole" amendments, the bank would be allowed to "reset" these on the CD rather than the LE. Note, however, that it still has to be given within three business days of the changed circumstance and that may or may not have been the case from what you described above, as set out here:

 

…The creditor must provide the consumer with the Closing Disclosure reflecting the revised estimate at or before consummation and within three business days of receiving information sufficient to establish that the changed circumstance or other triggering event has occurred.
https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_2018-TILA-RESPA-rule_executive-summary.pdf



01/16/19

Question: We have a customer that is leaving for boot camp for the Air Force. Am I correct in stating that boot camp is not active duty?

Answer: 
Boot camp is included in active duty. "Military Service" is defined under SCRA as period of active duty status. For members of the regular Armed Forces, active duty begins the day they leave civilian life; for them, active duty is not synonymous with deployment. For a member of a reserve component, the protections the SCRA offers begin when a member of the Reserves or National Guard receives mobilization orders. It is initiated upon receipt of mobilization orders in order to give the soldier time to put his or her affairs in order.

 

There may be several active duty periods during a member of the Reserves or National Guard’s career, including the initial active duty for training ("boot camp") and subsequent call-ups for service, whether or not the Servicemember volunteered for active duty is immaterial. Finally, military service also includes any period during which a Servicemember is absent from duty because of sickness, wounds, leave or other lawful causes.

 

Our Lending to Servicemembers Policy has great information regarding both the SCRA and MLA: https://www.compliancealliance.com/find-a-tool/tool/lending-to-service-members-policy

The term “active duty” means full-time duty in the active military service of the United States. Such term includes full-time training duty, annual training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. 10 USC 101(d)(1) http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title32-section101&num=0&edition=prelim

 


01/09/19

Question: Our current practice on residential balloon mortgages is to extend the maturity date prior to the balloon period if the customer requests it prior to the balloon and the borrower meets certain conditions. This is completed with a change in terms document leaving the current amortization period the same. The examiners have reviewed the process and are ok with this. We have a customer that has approached the bank and would like to extend the maturity but would like to shorten the amortization. She currently has 13 years left, but wants the bank to shorten it to 12. I guess my concern is, do we now have to treat it as a new request because it is a change that is increasing the monthly burden, not decreasing it.

 

Answer: So the rules on whether a "modification" would be considered a "refinancing" for Reg. Z purposes can be found in 1026.20 here: https://www.consumerfinance.gov/eregulations/1026-20/2016-14782_20160627#1026-20

 

Generally speaking, if there's satisfaction and replacement, or if the bank changes the rate based on a new variable rate feature, it will be considered a refinance which would require new disclosures. And although the rule doesn't specifically say this, we also interpret that it's best practice to provide new disclosures for any increase in credit, or if the prior obligation has already matured. So if any of these are occurring, that's when a new set of disclosures should be provided--but from what you describe, it doesn't sound like any of these are happening here.


01/02/19
Question: With the lapse in funding for the NFIP, is it true that no new policies can be written?

 

Answer: On December 28, 2018 FEMA announced that it will resume the sale of new insurance policies and the renewal of expiring policies.

This press release rescinds initial guidance that was issued on December 26, 2018 to suspend sales operations as a result of the current lapse in annual appropriations. The National Flood Insurance Program has been reauthorized by congress until May 31, 2019. 

The guidance is located here: https://www.fema.gov/news-release/2018/12/28/fema-resumes-selling-flood-insurance-policies-during-appropriations-lapse