Pub. 7 2019 Issue 2

12 The Community Banker www.mibonline.org it only on the Closing Disclosure if they sell their house by the stated date? A: The seller’s credit is speculative at this point, so leave it off for now. It can always be added in later if circumstances change. EFAA. Q: A new customer wants to open a new account with an SSI check over $14,000. Are we able to make the first $5,000 available the next day and hold the rest because it is a new account, or do we have to make all the funds available since it’s a government check? Regulation CC says next-day availability for government issued checks but special circumstances for accounts less than 30 days from opening. A: Regulation CC provides that the next-day availability requirement for deposit of U.S. Treasury checks into a “new account” applies only to the first $5,000 of that deposit. The remaining balance must be made available no later than the ninth business day after the banking day of deposit (unless the bank’s funds availability policy provides for quicker availability). Flood Insurance. Q: When we pull a flood determination form for our residential loans, we get a second page that contains the signature portion for our borrower below all of the notice information. The question has come up as to whether this second page is required by the regulations or not. Is it required for all loan types or just residential loans? Our commercial folks say that they have not used the second page in the past. Can you shed any light on this for us? A: Notice is required for any borrower (consumer or commercial/ ag) when the collateral property is or will be located in a Special Flood Hazard Area (Zone A), and as a result, you must get or keep a record of receipt. The notice your provider gives you on that second page is the notice laid out in Appendix A of each of the agencies’ flood insurance rules. TISA. Q: We have not charged a returned check fee since 1997. It is not on our fee schedule. When a customer is overdrawn, whether the check is paid or returned, it is described as a “non-sufficient” charge on the statement (itemized) and is described as an overdraft fee in the table on monthly statements for “total overdraft fees” for the period and year to date. Does Regulation DD require a bank to have a “total return item fee” if it is not disclosed as such? A: The key is not what the bank calls a fee, but what that fee is for or is related to. For Regulation DD purposes, if a fee is charged when a check or item is returned unpaid, no matter what the bank calls it, it is a “returned item fee” and goes in that category in the table on your statements. If you do not charge a fee when such an item is returned, then you do not need to disclose a “returned item fee.” TILA. Q: On a HELOC, the bank has to either send the “Annual” billing rights statement or have the billing rights information on the periodic statement. If a customer does not use their HELOC during the year and we have no annual fee to charge, the customer would have no reason to get a periodic statement because there is no activity to report. In a case where the customer does not get a periodic statement, does the bank have to provide the billing rights information on an annual statement or ensure the customer receives at least one periodic statement even though it will be blank? A: Once a periodic statement cycle has gone by without the short-form billing rights notice, then the cure to “buy” 12 months of compliance is to send the long-form notice (identical to what is included with or on the account opening disclosure). BSA. Q: Our bank is opening a safe deposit box in its own name (to be used for ATM DES keys). Since this is internal, we wondered if the CDD/BO rule applies. We are a corporation owned 100 percent by a holding company. Are we required to complete the Beneficial Ownership form for ourselves? If yes do we have to have one for the bank and one for the holding company? The holding company does have a beneficial owner of over 25 percent. A: No, the CDD/BO rule does not apply in the situation you describe. When we consult the definitions in the rule, we find that the definition of “legal entity customer” (to which the CDD/BO rule applies) specifically excludes a “financial institution regulated by a Federal functional regulator or a bank regulated by a State bank regulator.” Your bank – as well as any other bank, thrift, or credit union regulated by a federal or state supervisor – is not a “legal entity customer.” As a result, requirements of the CDD/BO rule about data collection, identity verification, and so on do not apply.