TOPIC: Compliance

Venmo, Zelle, P2P fraud claims

Manager at a credit_union ($1.4BUSA)
We have seen an uptick in fraud claims involving Venmo, Zelle, Facebook and other P2P services. I am curious to know how other institutions are handling these claims? Do you treat them as any other card fraud claim? Do you provide provisional credit in these instances? Many times we have found that these merchants are able to credit back our members, but it can be difficult getting our members to reach out to them. They seem to prefer to contact us and leave it at that. Any feedback, guidance or documentation would be appreciated. Thank you!

    Compliance is a Team Effort: Training the Next Generation of Compliance Professionals | The Ncast

    The Ncast podcast highlights industry thought leaders talking about hot topics and trends in risk and compliance. We hope this podcast is a valuable resource for you and your industry peers!

    We recently released Episode 14, Compliance is a Team Effort: Training the Next Generation of Compliance Professionals. This episode is an interview with Scott Daugherty, President & General Counsel at Bankers Alliance. Our guest discussed how today’s compliance officers can stay ahead of the curve and how to deal with the challenges financial institutions face in this complex, ever changing world of compliance. We invite you to listen, share, and tell us what you think!

    Listen and subscribe on your favorite podcasting platform here.

    Watch the full YouTube video here.

      FNMA Principal Curtailment Limits & Duplicate Property Tax Collection

      Manager at a bank ($2.3BUSA)

      I have a message into the FNMA Selling Guide team pending response as well but figured I would post here for opinions and discussion. We run into this issue twice a year, where we collect for property taxes at closing on refinance transactions but find out post-closing that these had been paid outside of closing by the previous lien-holder. Often times, this results in excessive cash-back to the borrower if the transaction is a rate/term or limited cash-out.
      Depending on the amount of the taxes, we sometimes also run over the FNMA limit on principal reduction of $2500.00 which can be applied over the cash-back limit. I've copied the verbiage from FNMA selling guide B2 1.5-05 below. In these situations we really have no solution to bring the loan into compliance UNLESS this would be considered a "refund of overpayment of fees or charges paid by the borrower . . ." under the first bullet point. It's a bit unclear and I could see an argument either way.

      Anyone have any inputs or thought on this? We can't be the only ones pulling our hair out over this! Any input is appreciated, thank you.

      Fannie Mae permits curtailments for the following reasons:

      • The lender may apply a curtailment to refund the overpayment of fees or charges paid by the borrower, in any amount, in accordance with applicable regulatory requirements.
      • If the borrower receives more cash back than is permitted for limited cash-out refinances, the lender can apply a curtailment to reduce the amount of cash back to the borrower to bring the loan into compliance with the maximum cash-back requirement. The maximum amount of the curtailment cannot exceed the lesser of $2,500 or 2% of the original loan amount for the subject loan. For example, if the borrower received $3,500 cash back at closing on a loan amount of $200,000, the lender could apply a $1,500 curtailment prior to delivery to Fannie Mae. This would result in “net cash back” to the borrower of $2,000, thus meeting Fannie Mae’s limited cash-out refinance requirement.

        Bi-Weekly Payments and LE/CD

        AVP at a bank ($162MUSA)
        We issued a Loan Estimate with monthly amortized payments, now the loan is scheduled for closing and the borrower wants bi-weekly payments.  The CD shows the term as 14 yrs 11.37 mo (original term 15 yrs).  Has anyone ran into this and do you think this is an audit issue since the term/payment do not match the LE?  If we issue the CD using monthly payment and then put the loan on bi-weekly after, I believe we will collect too much in prepaid interest and escrow.

          Address Confidentiality Program (ACP)

          Manager at a credit_union ($310MUSA)
          Hi everyone, we are in the process of developing our procedures in regard to members who participate in state sponsored Address Confidentiality Programs (ACP).  From a risk stand point, I am curious how other financial institutions are handling real estate lending and consumer lending when Address Confidentiality Program participants are involved, especially when considering the possibility of repossession on a secured loan.  Any insight is very appreciated!

            What is a Fair Lending Compliance Management System?

            Good afternoon, Bankers! Today we are discussing fair lending compliance management system (CMS) components and how fair lending programs can ensure compliance. This post was originally published on the Ncontracts blog.

            Preventing and detecting discrimination with an active fair lending (sometimes referred to as Safe and Responsible Lending) compliance management system  is essential for all financial institutions (FIs). FIs don’t just have a moral obligation to prevent and detect discrimination—they also have a legal obligation. Lending practices or programs that negatively impact a protected class can result in fines or enforcement actions—even if the discrimination was unintentional...

            READ THE FULL ARTICLE: Download the attached PDF