TRID: Payoffs and Payments Table Reminder

As you are probably well aware, the TRID rule give two separate versions for both the Loan Estimate and Closing Disclosure.  One format, sometimes referred to as the “primary” version, is required to be used whenever a seller is involved in the transaction.  It’s important to note, however, the regulation does allow this version to be used for any TRID transaction, regardless of whether a seller is involved.  The other format, sometimes referred to as the “alternate” version, can be used in a transaction where a seller is not involved. 

Remember, you can’t switch formats mid-transaction.  In other words, if you issue a Loan Estimate on the “primary” (i.e., with a seller) form, you must use that same format for the Closing Disclosure.  You cannot change and issue a Closing Disclosure on the “alternate” (i.e., no seller) form. 

Keep in mind, your investor(s) may have additional rules on when you can or need to use the “primary” vs. “alternate” versions.  You will, of course, need to play by those rules as well.   

It seems that most institutions prefer using the alternate forms whenever possible.  In doing so, when you get to the Closing Disclosure, the Payoffs and Payments table takes the place of the transaction summaries found on the primary version.  This table is generally used to itemize payments made to third parties, either from the loan amount or other funds provided by the consumer (or on behalf of the consumer).  Each entry in the table should include:

  • The payee;
  • A description for the purpose of the payment; and,
  • The amount (in the separate column).

We commonly see instances where the payee or a description of the purpose is missing.  For example, if you’re paying off a different loan, the institution may be listed, but there is no further description of the purpose, such as to pay off a loan.  Similarly, information may be given for a loan being paid off, such as “Loan #12345” but no indication of where the funds are actually going (i.e., the payee). 

Granted, this is a technical requirement and nothing to lose sleep over.  However, it’s also something that is commonly overlooked but fairly easy to fix.

Ready to learn more about TRID?  Be sure to JOIN US for our three-part webinar series, “TRID From A – Z”. 


HMDA Auditing: Purchaser Codes

If you are a HMDA reporting institution, you know that despite your best efforts, errors can still slip through.  But, you still need to ensure you are reporting the most accurate data possible.  Our upcoming webinar, “Auditing HMDA” will shed some light on the data fields you will want to pay close attention to, as well as those that have proven to be rather tricky and trip up a lot of institutions.  One of those tricky data fields is the “Type of Purchaser” field.

Diane explains more in the video.


Documenting Changes on TRID Applications

During our September Monthly Connection, we revisited the documentation requirements that come into play when changes occur on a TRID-covered application.  While documentation is a key component of compliance in general, it is actually something that’s written into the TRID rule.

Diane explains more in the video.


Section 1071 “Firewall”

Now that we have a proposed rule for the small business data collection requirements under Section 1071 of The Dodd-Frank Act, you may be starting to consider the potential impact to your institution.  If so, be aware of what the CFPB refers to as the “firewall”.  This generally prohibits anyone involved in making a decision on a small business credit application from having access to certain protected data.  This protected data includes whether a business is minority or women-owned and the owners’ demographic information.  If it’s determined individuals involved in the decision should have access to the information, notice would need to be provided. 

Determining who should have access to this protected data would need to be made on an individual or job-specific basis.  For example, it may be determined that loan officers should have access to the information because they may help collect it.  

Of course, keep in mind, all we have at this point is a proposal and certain details can change.  However, the Act itself requires certain data be protected.  While you may not need a solution for a while, you likely will eventually.  To learn more, join us for the lending portion of our Virtual Lending Compliance Conference Series and our Small Business Lending Data Collection webinar!



On June 30, 2021, the Financial Crimes Enforcement Network (FinCEN) issued the first government-wide priorities for anti-money laundering and countering the financing of terrorism (AML/CFT) policy (i.e., the “Priorities”).  These were required as part of the AML Act of 2020; FinCEN now has 180 days to establish regulations regarding these Priorities.

Statements on the AML/CFT Priorities were also issued for banks and non-bank financial institutions to provide guidance on how to approach the Priorities.

This issuance identifies and describes the most significant AML/CFT threats and provides informational resources to help assess and manage risk, tailor AML programs, and prioritize resources.

The Priorities include:

  1. Corruption;
  2. Cybercrime (including cybersecurity and virtual currency considerations);
  3. Domestic and foreign terrorist financing;
  4. Fraud;
  5. Transnational criminal organization activity
  6. Drug trafficking;
  7. Human trafficking and human smuggling, and,
  8. Proliferation financing.  

Covered institutions are not required to make any immediate changes to their risk-based AML programs in response to these Priorities and may wait until FinCEN issues regulations.  That said, you might want to at least start thinking about how you might incorporate these into your AML program.

Stay tuned!  We will address this further in our August edition of Banking on BCC.