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

Must I Respond Twice to the Same Unauthorized Transaction Claim?

January 7, 2020
Reading Time: 3 mins read

Q A consumer contacted the toll-free number at my bank claiming that a transaction on his credit card account was unauthorized. A few weeks later, the same consumer wrote a letter and mailed it to the bank’s post office box asserting the same dispute with no changes in fact pattern or amount. Because the bank already responded to the original dispute, does it have to respond to the second one as well?

A No. Under §1026.13(h) of Regulation Z, “a creditor that has fully complied with the requirements of this section has no further responsibilities under this section . . . if a consumer reasserts substantially the same billing error.” (Answer provided Oct. 2019.)

• • •

Q My bank has revised its privacy notice, so the bank will be required to send it to our customers this year. My question is whether the bank is required to send the annual notice to customers who have asked that the bank not mail anything, to customers in bankruptcy, to customers with foreign addresses or to customers who are deceased?

A The bank is not required to mail annual privacy notices to customers who have requested that the bank not mail notices. Customers who have declared bankruptcy are still customers who must receive the annual notice. Similarly, banks must send annual notices to customers with foreign addresses. For deceased customers, the answer depends. The personal representative of the deceased “stands in the shoes” of the deceased, so should receive the notice. However, no annual notice is required for accounts opened for the deceased’s estate, since the estate is not an individual. (Answer provided Oct. 2019.)

• • •

Q Our bank’s management has proposed a compensation program under which mortgage loan officers will receive a set percentage based on the loan amount. The percentage amount will differ depending on whether the loan is sold on the secondary market or held in our bank’s loan portfolio. Is this compliant with the loan officer compensation provisions of Regulation Z?

A It will depend on the specific factors.

Regulation Z generally prohibits compensation for loans secured by a dwelling based on either a term of a transaction or a proxy for a term of a transaction. Comment 2.ii.A to §1026.36(d)(1) provides an example of a proxy for terms of a transaction. The example assumes that a creditor holds certain types of loans in portfolio and sells all others into the secondary market. The loans sold into the secondary market have a higher interest rate than those held in portfolio. It pays loan originators a higher commission for transactions held in portfolio than those sold into the secondary market. The comment explains:

[W]hether an extension of credit is held in portfolio or sold into the secondary market for this creditor consistently varies with the interest rate [which is a term of the transaction] . . . over a significant number of transactions. . . . Therefore, under these circumstances, whether or not an extension of credit will be held in portfolio is a proxy for a term of a transaction.

Thus, because the interest rates and the compensation vary depending on whether the loan is held in portfolio or sold into the secondary market, the compensation is based on a term of the transaction (in this case a proxy), the compensation system would not be compliant.

That being said, depending on the circumstances, it may be possible to set up a compensation system whereby compensation might vary depending on whether the loans are held in portfolio or sold into the secondary market. (Answer provided Sept. 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 Policy and Compliance. 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: Loan originator compensationPrivacy notice
ShareTweetPin

Related Posts

CFPB claims ‘complex’ pricing drives up cost of financial products

CFPB to keep notification procedures for state enforcement of consumer law

Compliance and Risk
July 18, 2025

The CFPB is reversing course on its earlier decision to eliminate the procedures under which state officials must notify the bureau if those officials plan to enforce the Consumer Financial Protection Act.

The future of careers in risk and compliance

The future of careers in risk and compliance

ABA Banking Journal Podcast
July 17, 2025

What does the future hold for bank risk and compliance professionals? Krysti Cunningham discusses the technological transformation in risk and compliance at community and midsize banks and applications for AI tools and LLMs in risk and compliance.

BIS: Stablecoins fail as ‘sound money’

ABA urges lawmakers to include safeguards in stablecoin bill

Compliance and Risk
July 17, 2025

A durable regulatory framework for stablecoins must balance the potential for enhancing payments with the need to limit negative economic consequences, promote financial stability and guard against consumer protection risks, ABA President and CEO Rob Nichols said in...

ABA urges FCC to combat illegal call spoofing

ABA urges FCC to impose call authentication requirement for non-IP networks, mandate IP transition

Compliance and Risk
July 16, 2025

ABA joined six trade associations in urging the FCC to adopt a proposal to create a new call authentication requirement designed to limit criminal access to the U.S. calling network.

ABA faults banking regulators for confusing CRA rule rollout

Banking agencies propose to rescind Community Reinvestment Act rule

Community Banking
July 16, 2025

The Federal Reserve, FDIC and OCC issued a joint proposal to rescind the Community Reinvestment Act final rule adopted in 2023.

CFPB releases mortgage servicing proposal, overhauls loss mitigation framework

FHFA releases FAQ about Fannie, Freddie credit score change

Compliance and Risk
July 16, 2025

FHFA released an FAQ on the recent announcement that Fannie Mae and Freddie Mac will expand credit scoring options. Fannie and Freddie have also created webpages about the planned implementation of the policy.

NEWSBYTES

ABA offers fixes for small-business lending data collection rule

July 18, 2025

ABA DataBank: Retail sales rebounded in June

July 18, 2025

CFPB to keep notification procedures for state enforcement of consumer law

July 18, 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

The future of careers in risk and compliance

July 17, 2025

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
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.