Ability to Repay on Construction Loans
Question: A member wants to build a new home while continuing to live in—and eventually sell—their current residence. When we underwrite construction loans, we always assess the long-term takeout (permanent financing) as part of the approval process. Are there circumstances where we can exclude the member’s current mortgage from the debt ratio calculation, or must […]
Overdraft LOC Fees, MAPR and FCU Rate Cap
Question: We are a Federal Credit Union. We offer an overdraft line of credit tied to members’ checking accounts, with an 18% interest rate. Members can access the line themselves (online, over the phone, or at a branch) without any fees—just the standard interest applies. However, if the system automatically transfers funds from the line […]
Regulation E and Cardholder Negligence
Question: A member reported that their debit card and the PIN were stolen together. They admitted the PIN was either written on the card or kept in the same wallet. There were subsequent unauthorized transactions. Do we need to process a fraud dispute in this case? We don’t see this often, since most members don’t […]
Is Flood Insurance Required if a Flood Map Zone Changes?
Questions: Our life-of-loan flood zone monitoring vendor notified the credit union that a certain member’s property securing his mortgage loan is newly in a flood zone. Is flood insurance required even though there is not a “triggering” event (making, increasing, renewing, or extending a covered loan)? Our member is disputing the new flood zone determination […]
Does the July 1 Reg CC update require a change in terms notice?
Question: Hi Heather. Some questions. Do the upcoming dollar threshold changes to funds availability schedules under Regulation CC require the credit union to provide a change in terms notice to affected members? And if so, is there model change in terms language? Answer: What is Changing? Let’s start out by explaining what is changing. Regulation […]
Reporting Loan Servicer Identity to FEMA
Question: Hi Heather, Our NCUA examiner asked us how we report loans with flood insurance to the FEMA administrator. I wasn’t aware of this requirement, and I couldn’t find any information on FEMA’s website about how to exactly do this. Can you help? Answer: I can help! Let’s start with the requirement from NCUA flood […]
CTR with “unknown” transactor?
Question: Hi Heather, Hoping I could ask your advice on a fraud issue we had yesterday. Someone impersonating our member withdrew cash at two of our offices that totaled more than $10,000. My question is how should I complete CTR since we know it wasn’t our member? Can I say “unknown” for everything? Answer: Wowza. […]
Who needs to be listed on a CTR?
Question: If a Currency Transaction Report (CTR) reportable cash transaction happens on a joint account, does the CTR need to include the names of all joint owners, or only the member who conducted the transaction? I suspect we need to include all joint owners and check Box 2c “Person on whose behalf transaction was conducted” […]
Did Beneficial Ownership Certification Rules Change?
Question: Do you have any guidance on this article released by the Financial Crimes Enforcement Network (FinCEN)? Do credit unions still need to collect beneficial ownership information from business members? Or do we only collect information for “reporting companies” as defined by the new rule? Answer: Great Question! credit unions must still collect beneficial ownership […]