Bankers Alliance Compliance Corner
Editor's Note: The following was submitted by Bankers Alliance. LBA, through its subsidiary Louisiana Bankers Service Corporation, has partnered with Bankers Alliance to give banks access to three compliance-related programs. Click here for more information.
Q: Is a co-signer on a mortgage loan required to receive any disclosure specifically regarding their status as a co-signer?
A: The Cosigner Notice required under the former Regulation AA is not specifically required by law anymore after the repeal of the regulation, but it's not uncommon for it to still be provided from an Unfair, Deceptive, or Abusive Acts or Practices perspective under bank policy or procedure—for example:
"The Agencies note that the Federal Trade Commission’s Credit Practices Rule requires—and the former credit practices rules applicable to banks, savings associations, and Federal credit unions required—creditors to provide a “Notice to Cosigner” explaining the cosigner’s obligations and his or her liability if the borrower fails to pay. The Agencies believe that creditors have properly disclosed a cosigner’s liability if, prior to obligation, they continue to provide a “Notice to Cosigner."" Click here for more information.
Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call (888) 353-3933 or email email@example.com and ask for the membership team.
Did you know that there are three types of loans that are exempt from flood Insurance?
- Loans with a principal balance of $5000 or less, and a repayment term of one year of less.
- State-owned property covered by an adequate policy as determined by the administrator of Federal Emergency Management Agency.
- Loans for buildings that are part of a residential property but detached from the primary structure so that it does not serve as part of the primary residence.
Review Alliance is an independent group of compliance specialists offering banks deep-dive audits of their existing transactions, recommendations about program enhancements or guidance on future safety and soundness. Virtual Compliance Officer was added in 2020—a new shared service-model using bank-dedicated compliance officers; perfect for monitoring and guiding your bank remotely. To learn how to put them to work for your bank, call (833)-683-0701or email firstname.lastname@example.org and ask for the membership team.