Compliance Q&A Archive

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 ...Read More

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 ...Read More

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, ...Read More

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 ...Read More

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 ...Read More

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 ...Read More

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, ...Read More