Western Banker July/August 2022

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interp-6/#6-b-Interp-2 Therefore, consumer liability in these instances is generally going to be limited to $50 if the consumer notifies the financial institution of the loss or theft of an access device within two business days of learning of the loss or theft of the access device, or up to a maximum of $500 if the consumer fails to provide notice within that time period. Q. For a TRID construction loan disclosed as two transactions, what should we disclose as the interest rate if it’s variable we don’t know what the rate will be during the permanent phase? A. If it will have an adjustable rate and the rate is unknown when the Loan Estimate is provided, the bank should disclose the fully-indexed rate, which is the rate calculated using the index and margin at the time of consummation. If the index and margin that will be in effect at consummation must be provided, the fully indexed rate disclosed may be based on the index in effect at the time the disclosure is delivered. “1. Interest rate at consummation not known. Where the interest rate that will apply at consummation is not known at the time the creditor must deliver the disclosures required by § 1026.19(e), § 1026.37(b) (2) requires disclosure of the fully-indexed rate, defined as the index plus the margin at consummation. Although § 1026.37(b)(2) refers to the index plus margin “at consummation,” if the index value that will be in effect at consummation is unknown at the time the disclosures are provided under § 1026.19(e) (1)(iii), i.e., within three business days after receipt of a consumer’s application, the fully-indexed rate disclosed under § 1026.37(b)(2) may be based on the index in effect at the time the disclosure is delivered. The index in effect at consummation (or the time the disclosure is delivered under § 1026.19(e)) need not be used if the contract provides for a delay in the implementation of changes in an index value. For example, if the contract specifies that rate changes are based on the index value in effect 45 days before the change date, creditors may use any index value in effect during the 45 days before consummation (or any earlier date of disclosure) in calculating the fully-indexed rate to be disclosed. See comment app. D-7.iii for an explanation of the disclosure of the permanent financing interest rate for a construction-permanent loan.”

• The person establishing the account is the owner of the account and the victim is the designated beneficiary. This means that the funds given to the victim to establish the account will not belong to the victim once deposited into this type of account. • Ownership passes at the death of the account owner to the victim. • If the victim dies, the funds do not pass to his/her estate. The funds belong to the owner of the account. • Checks made payable to the victim should not be deposited into this type of account, unless the victim properly endorses the check. • The owner’s TIN is used for IRS and CIP purposes. In addition, Compliance Alliance has a thorough cheat sheet regarding benefit and memorial accounts, here: https://compliancealliance.com/find-a-tool/tool/benefit memorial-fund-accounts-cheat-sheets/ Q. Our customer received a phone call from someone telling the customer that the customer’s computer was about to be hacked. The person convinced the customer to allow remote sign into the customer’s computer to “stop the hacking process.” In this process, the customer provided both of his debit card numbers and PINs. The fraudster used these to then purchase gift cards. We feel the customer was clearly negligent in this case, but does that help the bank at all? A. Unfortunately, when fraudsters gain access to accounts by persuading consumers to provide their access device (e.g., authorization or authentication code), Regulation E generally considers such situations to be unauthorized electronic fund transfers. Regulation E’s commentary specifically states that “[a]n unauthorized EFT includes a transfer initiated by a personwho obtained the access device from the consumer through fraud or robbery.” https:// www.consumerfinance.gov/rules-policy/regulations/1005/ interp-2/#2-m-Interp-3 Furthermore, according to the commentary, “consumer behavior that may constitute negligence under state law, such as situations where the consumer wrote the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer’s liability for unauthorized transfers: https:// www.consumerfinance.gov/rules-policy/regulations/1005/

Comment 37(b)(2): https://www.consumerfinance.gov/ rules-policy/regulations/1026/interp-37/#37-b-2-Interp.

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