In our January Newsletter, we told you about the recent revisions to the Military Lending Act Interpretive Q&A’s. A new question regarding the timing of the status check was included for those looking to qualify for the safe harbor.
To qualify for the safe harbor, the Rule states that the status check generally needs to be done at the time someone initiates a transaction or applies for an account, or 30 days prior to either. The August 2016 Interpretive Q&A’s seemed to make an attempt at broadening this time period by stating that To benefit from the safe harbor…, a creditor must determine…covered borrower status at or before the time of the transaction or the time an account is established… The new Q&A addresses this again by stating that you can qualify for the safe harbor by doing the status check simultaneously with the initiation of the transaction or submission of an application…or during…processing of that application…
As we noted in our newsletter, we’ve always taken a conservative stance on this topic, due to the risk involved. We do believe; however, that together these Q&A’s allow you to do the status check after the actual application and stillqualify for the safe harbor. We also believe you must do the check prior to closing the loan or opening the account.
So, not only does this give you more time to do the status check, it may also make it easier to use a credit report to do the status check if you’re interested in that option.
Want to know more? Join us on January 24, 2018, for our one-hour, video webinar on the Military Lending Act. We will delve into the requirements of the Military Lending Act including the newly revised guidance. Register today!
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!