He also asks how many children she has and if she plans to have more. She has come to the bank to get a loan to start her own business—a "Call" Center where consumers can inquire about the best places to purchase almost anything. Reg. He asks if she would be agreeable to a loan for a lesser amount or for a shorter term. The Consumer Financial Protection Bureau (Bureau) is now proposing a rule to implement those changes, which were enacted in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Specified trigger events require a US public company to file an 8-K within four business days to report the event and provide certain related information. Regulation B is intended to prevent applicants from being discriminated against in any aspect of a credit transaction. An appraisal, shouldn’t be a rigid document and process with a one type fits all approach (which is it why can’t be something HR are fully responsible for). That Dodd-Frank Act amendment to TILA, which adds TILA section 129H, is required to be implemented through joint rulemaking. To which type of credit does the coverage of ECOA and Regulation B apply? 9. (Comment 14(b)(3)-3) A: Not all documents that discuss or restate a property’s value are valuations. Q: What is not considered a valuation? That means any feature that is not related to consumer credit cannot be used when making loan approval decisions.. Which option correctly lists an activity that is covered by ECOA. He has accepted a real estate loan application from his customer, Jill Dickinson, who wants to refinance her first mortgage. When it comes to credit transactions, a creditor cannot discriminate:, Regulation B also mandates that lenders provide oral or written notice of rejection to failed applicants within 30 days of receiving their completed applications. (1) In general. The disclosure of the applicant's right to receive the appraisal must be mailed or delivered no later than what day? 7. rules, and recordkeeping requirements. Accessed Sept. 4, 2020. The Reg B appraisal rules are triggered by what event? 1. Accessed Sept. 4, 2020. He is handling a real estate loan request that will be secured by a first lien on the subject property. You can learn more about the standards we follow in producing accurate, unbiased content in our. Josh Johnson applied for a home equity loan at his neighborhood bank. Federal Reserve. Common themes in performance appraisals focus on employee attitudes such as reliability, dependability, and integrity. When Acme Bank sends Rochelle the Regulation B required adverse action notice, what additional information must be included in that notice? 84, No. Optionally, Creditors were allowed to forego notice of the right to receive a copy of appraisal and always provide an appraisal copy. See. Absent evidence of actual receipt by the applicant, delivery is deemed to have occurred on Thursday, December 5 ( i.e., three business days after mailing the appraisal). 10. An inquiry about loan rates and terms C. The refinance of a 20-unit apartment complex D. An application for an auto loan if the applicant plans to live in his car. The original mortgage was paid years ago, but when she was in school, Karen took out an equity line of credit to complete some much needed repairs on the property. 1296, Title I, section 103, codified at 12 U.S.C. Unfortunately, the CDD rule does not have a prescriptive list of events that will trigger the review of beneficial ownership information for existing business accounts. Other items of Form 8-K refer also to majority-owned subsidiaries (such as Item 2.01). Employee Appraisal Phrases: Reliability, Dependability, Integrity. Two weeks later Ms. Boyd signs the loan documents and begins her home repairs. Summary of Reg B Appraisal Rules Effective from 2014 Coverage of Appraisal: The appraisal rules apply to all appraisals and other written valuations developed in connection with the loan application. TheBank. 3339(3). Below is a comparison of the new 2014 appraisal rules with the appraisal rules that existed prior to January 18, 2014. American Bank is using a credit score from Equifax as the sole criteria for determining creditworthiness. The results are as expected - most creditors are complying with the new rules but some seem a little confused by the requirements. July 17, 2013 at 3:18 pm #3635. It includes any estimate of the value of a dwelling developed in connection with an application for credit. Participant. Home › Forums › Equal Credit Opportunity Act/Regulation B › Reg B Appraisal Rules – Esign. 3331 et seq. This could trigger a new three-day waiting period under the Appraisal Rule. Comment 14(a)(1)-2 clarifies that creditors must provide copies of appraisals or other written valuations prepared in connection with credit renewals requested by the applicant. The initial final rule was issued in January 2013. Now, there is some good news. Whitney conducted three loan interviews and for each interview she considered the age of the applicant. 10. By definition…that’s an appraisal. Which option correctly lists the two methods National Bank should consider? A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. 2 12 U.S.C. The correct answer is a. 3. Which item is considered a valuation under Reg B rules that must be provided to his customer? From the Preamble of the Reg B Valuation Rules: The final rule maintains comment 14(a)(1)-2, pertaining to credit renewals, with minor changes for consistency and clarity. 2. For example, an applicant who puts down his home as collateral will have additional information collected for monitoring compliance. Mateo needs to provide the customer with a free written valuation of the property. Carmen Thomas is meeting with the loan officer of her bank, Mark Shellig, to discuss a loan she would like to get to make some repairs on the house she has lived in for 18 years. Which item is considered a valuation under Reg B rules that must be provided to his customer? The type appraisal utilized has no bearing on the notice requirement. Carl's Other Events. (a) Providing appraisals and other valuations. Mateo is a loan processor at Keyside Bank. (a) Appraisals required. A. The OCC, Board, and FDIC (collectively, the agencies) are adopting a final rule to amend the agencies' regulations requiring appraisals of real estate for certain transactions. A. Karen has recently married and wants to have her new husband added to the equity line to help him build credit. All lenders are required to comply with Regulation B, which protects applicants from discrimination. 12. The Equal Credit Opportunity Act (ECOA) is a regulation that aims to give all legal individuals an equal opportunity to obtain loans. Federal Reserve. Reg B mandates that lenders provide explanations to rejected applicants within 30 days of receiving their completed applications. On September 13, 2013, the CFPB amended the official interpretations of Regulation B to clarify that when the rule refers to appraisals or other valuation models, it does not include speculative opinions not based on an appraisal or other valuation model. Ms. Boyd wants a loan to make repairs on her house. 4 Public Law 111–203, 124 Stat. Creditors that fail to comply with Reg B will be held liable for punitive damages up to $10,000 in individual actions. That’s not an evaluation. Which option lists possible consequences the bank might be subject to if Carmen sues the bank due to Mark's inappropriate questions? If a request is denied, Regulations B and V adverse action timing and notification requirement should be followed. Jerry's job includes many credit activities. Both are permitted by the ECOA. However, we are seeing some confusion with the timing requirements, so here is some information that hopefully clarifies the timing. Unlike the RESPA-TILA three-day rule, the Appraisal Rule does include a waiver provision. The value of the collateral securing the loan is a significant risk factor in real estate lending, so it is essential for banks to have adequate appraisal and evaluation programs in place. Regulation B also mandates that lenders provide oral or written notice of rejection to failed applicants within 30 days of receiving their completed applications. National Bank is considering two methods for evaluating credit applications. Chip Dawson is a loan officer at Anytown Bank. The notice must explain why the applicant was rejected or give instructions for how the applicant can request this information. Keymaster. Fulfill Your ECOA / Reg B Regulation Requirements. The final rule issued in September 2013 adds comments to clarify the definition of valuation. Given the volume and complexity of the CFPB’s new mortgage rules related to Reg Z and Reg X, we haven’t focused much on the new Reg B appraisal rule. Tagged: refinance, Reg B, valuation. Ms. Jones wants a loan to purchase a new condo in a retirement community. Posted By: nossa Re: New Reg B Appraisal Notices & Copies - 08/06/14 04:35 PM. Consumer Financial Protection Bureau (CFPB) changed the appraisal rules in Regulation B on January 18, 2013. One of the trigger events is a material agreement outside the ordinary course of business. rules on providing appraisal reports, this amendment revises those rules. Now that the rules have been in place for a year reports of violations are filtering in from examiners and auditors. Do the delivery rules apply? It was supplemented with additional information. 1. Which option correctly lists two circumstances under which age can be considered? Which comment was a violation? More importantly, it gives applicants the chance to correct the creditor's mistakes in evaluating the applicant's creditworthiness.. Part 1002 - Reg B - Equal Credit Opportunity Act (ECOA) Compliance. Now that the rules have been in place for a year reports of violations are filtering in from examiners and auditors. TILA section 129H(b)(4)(A); 15 U.S.C. The disclosure of an applicant's right to receive the appraisal must be mailed or delivered no later than what day? 53580 Federal Register/Vol. 4. Based on the applicant's race, marital status, nationality, gender, age, or religion, Against an applicant whose income comes from a public assistance program, Against an applicant who, in good faith, exercised his or her rights under the, The spouse will be permitted to use the account, The spouse will be contractually liable on the account, The applicant is relying on the spouse's income as a basis for repayment of the credit requested, The applicant resides in a community property state or relies on property located in such a state as a basis for repayment of the credit requested. The Equal Credit Opportunity Act (ECOA), enacted in 1974, and its implementing rules (known as Regulation B) prohibit creditors from discriminating on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to contract), because all or part of an applicant’s income derives from public assistance, or because the applicant has in good faith … 11. Viewing 4 posts - 1 through 4 (of 4 total) Author. In general, the revisions to Regulation B require creditors to provide to applicants free copies of all appraisals and other written valuations developed in connection … "Federal Fair Lending Regulations and Statutes: Equal Credit Opportunity (Regulation B)," Page 1. The Reg B appraisal rules are triggered by what event? 81 Fed. February 6, 2014 at 6:52 pm #5315. rcooper. An application for credit that is to be secured by a first lien on a 1-4 family dwelling B. 9. Reg B Appraisal Rules. In finance, the term adverse action refers to a type of notice given by a lender when a borrower's credit application has been denied. 1376, codified at 12 U.S.C. The past few years have seen significant developments in real estate appraisals and evaluation rules and regulations. Revised Interagency Guidelines and new rules under Reg Z have been issued, and we've seen additional requirements finalized recently due to Dodd-Frank. We also reference original research from other reputable publishers where appropriate. appraisal is placed in the mail on Monday, December 2. What is Regulation B sometimes referred to by bankers? This means that the borrower can waive this timing requirement and agree to receive the updated copy at or before consummation. Under Reg B revisions, National Bank is required to notify the Link's in writing of their right to receive a copy of their appraisal or valuation. Redlining has often been used to discriminate against Black Americans. 3 Public Law 115–174, 132 Stat. ECOA (REG B) VALUATION RULES & TILA (REG Z) HPML APPRAISAL RULES (Effective ... Before the new ECOA Valuations Rules, Reg B required only that creditors notify applicants of their right to request a copy of appraisal, and if requested to provide copy. The final rule revises Regulation B to implement an ECOA amendment concerning appraisals and other valuations that was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Applications, Adverse Action & Appraisals/Evaluations . How long would the bank need to keep the loan documentation on file if Ms. Boyd did not accept the bank's counteroffer? Richard violated Regulation B during his loan interview with Ms. Cooper. 2. 9. Which option correctly lists two credit processes covered by the ECOA? An appraisal needs to consider the individual, the manager and the department. Richard Nuanes, a loan officer at Community Bank, is meeting with Louise Cooper, a retired schoolteacher. 1639h(b… Josh's loan request was denied because his credit score was too low. One file includes a consumer loan for $35,000, the second file includes a consumer loan of $25,000, and the third file includes a business loan for $50,000. Although Rick generally cannot ask for any prohibited information, he can collect certain data from applicants applying for a loan to purchase or refinance their principal dwelling. However, under … Redlining is an unethical and frequently illegal practice that denies loans or services to people living in majority-minority communities. Federal Reserve. The rule … The Regulation B 30-day rule sets forth the requirements of a financial institution for notifying applicants of their credit decision. The appraisal notice under Regulation B is triggered by the receipt of an application for credit to be secured by a first lien on a dwelling. The appraisal notice under Regulation B is triggered by the receipt of an application for credit to be secured by a first lien on a dwelling. Carmen is interested in a home equity line secured by her home. These requirements are triggered by specific events and ... Regulation B, the Board has amended Regulation B to address the timing and delivery of electronic ... Rules on Providing Appraisal Reports (Section 202.14) (Appraisal report upon request and Notice of right to appraisal) The CFPB lists credit transactions and aspects of credit transactions to include consumer credit, business credit, mortgage, and open-end credit. Which statement is accurate regarding this request for information? During the loan interview, Mark expresses his concern that she may not qualify for the loan based on her current income and asks if her husband can cosign for her. Overview of the Regulation B 30-day Rule. The results are as expected - most creditors are complying with the new rules, but some creditors seemed to be a little confused by the requirements. The loan being secured by a 1-4 dwelling is the triggering factor. 11. Errors in credit reports are fairly common, and many people only find out about them after being denied credit. Brandon reviews the completed application and decides to make a counteroffer for a loan and calls Ms. Boyd to tell her the counteroffer and she accepts. OnDemand. and appraisal copy requirements of a Dodd-Frank Act amendment to the Truth in Lending Act (TILA) applicable to higher-risk mortgages. This topic has 1 reply, 1 voice, and was last updated 6 years, 10 months ago by rcooper. Posted By: Dan Persfull Re: New Reg B Appraisal Notices & Copies - 08/06/14 03:20 PM. 6. Appraisal Regulations Frequently Asked Questions Printable Format: FIL-62-2018 - PDF . 4. 8. 1. 5. Mr. and Mrs. Link have applied for a real estate loan with National Bank. There are many different types of credit. An extraordinary event beyond the control of any interested party or other unexpected event specific to the consumer or transaction. Based on your understanding of Regulation B, which option correctly lists two instances of age consideration that were legal? Home appraisals are required for all first mortgages. Appraisals are professional judgments of the market value of real property based on a variety of market factors. 9. Regulation B prohibits creditors from discriminating the creditworthiness of applicants with regard to their race, color, religion, national origin, sex, marital status, or age. 4.48.6 Real Property Valuation Guidelines 4.48.6.1 Program Scope and Objectives 4.48.6.1.1 Background 4.48.6.1 Creditors can ask about the number of children, their ages, and the borrower's financial obligations relating to the children. Thus, we have to look at the definition of “application”, which can differ depending on which regulation you’re looking at. Unfortunately, this rule is not a simple as it may seem, as there are several parts to this rule. Summary: The federal banking agencies (the Agencies) are issuing the attached Frequently Asked Questions (FAQs) on appraisal and evaluation functions. Appraisal guidelines may be triggered in instances when a borrower requests a renewal of an existing loan and a new appraisal/evaluation will be produced. You hear a compliance officer express a concern that he may have identified a violation of the Equal Credit Opportunity Act. Which method is the bank most likely using? Rather the rule follows the same risk-based review format of other Bank Secrecy Act (BSA) requirements. Reg B outlines the rules that lenders must adhere to when obtaining and processing credit information. The spouses of rejected married applicants also have the right to this information. Congress enacted the ECOA to ensure that financial institutions and firms dealing with credit make it equally available to all creditworthy customers. The regulation prohibits lenders from discriminating based on age, gender, ethnicity, nationality, or marital status., All lenders are required to comply with Regulation B when extending credit to borrowers. By Ken Lloyd . 3. Regulation B is intended to prevent applicants from being discriminated against in any aspect of a credit transaction. Which option lists two circumstances under which you can consider the age of a credit applicant? Accessed Sept. 4, 2020. 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