ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Compliance and Risk

My Bank Received a Subpoena For Customer Records—How Do I Respond?

July 11, 2019
Reading Time: 5 mins read

QMy bank received a civil subpoena for records pertaining to one of our customers. The subpoena asked if the bank had filed “any” reports with government agencies pursuant to this customer’s activities. The subpoena did not ask specifically if we filed a suspicious activity report, so it seems that citing the SAR non-disclosure provisions of the Bank Secrecy Act hints that we did indeed file. How should we respond? 

ACiting the specific non-disclosure provisions of the law implies there is a SAR. It’s not settled law, but the consensus seems to be that such a citation is best avoided. The response should be that your bank is complying, to the best of its ability. The bank needs to consult an attorney familiar with these types of subpoenas, as each court has its own protocols. (Response provided March 2019)  

 

QUsing FICO scores as part of the selection criteria, the bank sent prescreened offers of credit to those with higher FICO scores. The offer stated an annual percentage rate. If a recipient applied for the loan, the bank—in some cases—honored the APR stated in the offer even if the applicant’s FICO score had dropped since the prescreening. However, if the FICO score had dropped significantly, the bank issued a denial. The bank did not provide risk–based pricing notices to these customers, since the ultimate credit score did not affect the pricing. The bank’s auditor is now questioning whether the bank complied with Regulation V’s requirements to provide risk-based pricing notices. Was this process compliant?  

AYes. Regulation V’s §1022.72(a) provides that (unless an exception applies) risk-based price notices are required if the creditor uses a consumer report (including a FICO score) in connection with an application of consumer credit and, based in whole or in part on that report, grants credit to the applicant on material terms that are materially less favorable than the most favorable material terms available to a substantial proportion of consumer from that creditor. The key words here are “grants credit.” In this case, the bank denied the credit based on the score. Indeed, the bank did not use any form of risk-based pricing. It applied a single APR to all of those who received credit. (Response provided March 2019)  

 

QThe 2018 amendments to the TILA–RESPA integrated disclosure rule allow revisions to the Closing Disclosure for valid changed circumstances. The bank is considering issuing the initial Closing Disclosure shortly after issuing the Loan Estimate. The bank is aware that other lenders issue Closing Disclosures almost immediately after loan approval and issuance of the Loan Estimate which means, in most cases, the fees on the Closing Disclosure are based upon the best information available standard and most likely do not reflect the actual terms of the transaction. 

Is it acceptable to issue the initial Closing Disclosure shortly after issuing the Loan Estimate based on the best information available at that time and still be compliant?  

 ANo. It is clear in Regulation Z §1026.19(f)(1) that “the actual terms of the transaction” must be disclosed on the closing disclosure. In addition, the Consumer Financial Protection Bureau has emphasized the importance of accuracy on the Closing Disclosure. For example: “The Bureau will continue to monitor the market for practices that do not comply with the rule’s Closing Disclosure accuracy standard” (emphasis added). 

The bureau agrees with commenters who stated that the practice of providing very early Closing Disclosures with terms that are nearly certain to be revised would be contrary to the underlying purpose of the closing disclosure (emphasis added). (Response provided March 2019)  

Answers are provided by Leslie Callaway, CRCM, CAFP, director of compliance outreach and development; Mark Kruhm, CRCM, CAFP, senior compliance analyst; and Rhonda Castaneda, CRCM, senior compliance analyst, ABA Regulatory Compliance and Policy. Answers do not provide, nor are they intended to substitute for, professional legal advice. Answers were current as of the response date shown at the end of each item.   

ADVERTISEMENT
Tags: Credit scoringSuspicious Activity ReportsTILA-RESPA integrated disclosures
ShareTweetPin

Related Posts

Fed releases agenda for upcoming conference on large bank capital requirements

Fed seeks public input on large bank rating system revision

Compliance and Risk
July 10, 2025

The Federal Reserve requested comment on a proposal to revise its supervisory rating framework for large bank holding companies to address the "well managed" status of the firms.

FinCEN, IRS-CI launch series to help banks combat fentanyl trafficking

FinCEN extends compliance dates for fentanyl orders

Compliance and Risk
July 9, 2025

FinCEN has extended by more than a month the effective dates for orders involving three Mexico-based financial institutions with alleged ties to fentanyl trafficking, according to an agency statement.

ABA Regulatory Policy and Compliance Inbox: Must banks disclose all co-branding relationships?

ABA Regulatory Policy and Compliance Inbox: Just what is reportable under CRA?

Compliance and Risk
July 9, 2025

What about refinances and renewals for small business, small farm and community development loans? And: Understanding risk-based pricing notices.

Justice Department warns of scammers exploiting Texas floods

Justice Department warns of scammers exploiting Texas floods

Compliance and Risk
July 8, 2025

The U.S. Attorney’s Office for the Western District of Texas “is on alert” for fraudsters seeking to exploit individuals and businesses following the recent deadly floods in Texas, according to the U.S. Department of Justice.

Fraud Watch: The value of a multipronged strategy

Fraud Watch: The value of a multipronged strategy

Compliance and Risk
July 8, 2025

The value of building that response playbook and focusing on education and planning.

The ever-expanding role of chief risk officer

The ever-expanding role of chief risk officer

Human Resources
July 7, 2025

'A new era has emerged in which CROs faced greater nonfinancial risk amid pressure to boost the bottom line.'

NEWSBYTES

ABA donates to Texas flood relief efforts, urges bankers to contribute

July 10, 2025

Mortgage rates rise

July 10, 2025

Fed seeks public input on large bank rating system revision

July 10, 2025

SPONSORED CONTENT

Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

July 1, 2025
AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025

PODCASTS

Breaking down the bank-related provisions in the big budget bill

July 10, 2025

Podcast: Inside ABA’s new Treasury Check Verification System API

June 25, 2025

Podcast: Staying close to clients amid tariff-driven volatility

June 18, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.