Pub. 6 2018 Issue 3

14 The Community Banker www.mibonline.org COMPLIANCE Q&A – FALL 2018 By Bill Showalter, Senior Consultant, Young & Associates, Inc. Young & Associates provides banks and thrifts with support for their compliance programs, independent reviews, and in-bank train- ing, as well as a full menu of management consulting, loan review, IT consulting, and policy systems. HMDA. Q: Our bank qualifies for the partial exemption from expanded Home Mortgage Disclosure Act (HMDA) reporting and we are opting to take advantage of the exemption. Can we now go back on the Loan/Application Register (LAR) from January 1, 2018 and clear the extra data fields that we are no longer re- quired to report on the LAR? A: No, it’s not quite that easy. You will not be merely leaving those 26+ data points blank. If you go through the latest HMDA Filing Instructions Guide (FIG), you will see that, generally, you will have to enter either “Exempt” or “1111” in these newly added data fields. The exception is for the Universal Loan Identifier (ULI). Reporters eligible for the partial exemption may either continue generating a ULI for each LAR entry or may use a “non-universal loan identifier” – but, this loan identifier still must be unique within your institution, it just does not have to be unique in the HMDA world (which the ULI is since it contains the bank’s Legal Entity Identifier, LEI). And, there is no check digit needed in a non-universal loan identifier. The interpretive and procedural rule from the Consumer Financial Protection Bureau (CFPB) informs us that not only do lenders eligi- ble for the partial exemption not have to record the expanded data points for transactions on or after May 24, 2018, but also that such lenders will not have to report those data points for transactions from before May 24, 2018. Lenders do have the option to continue reporting the expanded data points for the rest of this year (probably attractive only to those with higher loan volumes) and then begin the pared-back reporting next year. Or, you may go back in the LAR and replace the expanded data points with the applicable exempt code. BSA. Q: A customer withdrew $9,995.53 in cash and, later the same day, came back with $2,800 in cash to purchase a cashier’s check for $2766.55. She received $33.45 back in cash. Would this $33.45 be considered an exchange of currency that, when aggregated with the earlier withdrawal, would prompt the filing of a Currency Transaction Report (CTR)? A: Yes, when aggregated with the earlier withdrawal, that little bit of cash back puts the daily “cash out” total over $10,000 – triggering the requirement for the bank to file a CTR for the aggregated cash- out transactions. TILA. Q: In regards to loan fees that cannot change from the Loan Estimate (LE) to the Closing Disclosure (CD), I know that fees subject to tolerances cannot increase (more than any tolerance) but can they decrease? For example, an LE for an employee loan included an origination fee but we do not charge employees this fee. Would it be a violation since it was disclosed on the LE but will not be on the CD? A: Yes, fees disclosed on an LE may decrease, or not be charged at all, without affecting the association’s “good faith” determina- tions and tolerances. In the Small Entity Compliance Guide for TRID, the CFPB deals with this issue and states that, “If a service is not performed, the estimate for that charge should be removed from the total amount of estimated charges. (Comment 19(e)(3) (ii)-5).” The “removal” is from the total of estimated charges used in de- termining whether the fees actually charged (and disclosed on the