By Leslie Callway, CRCM, CAFP and Terry Hollinger, CRCM
Q/ My bank filed a suspicious activity report 90 days ago because one of our customers was victimized by a scammer. It was not immediately clear that the bank suffered a loss, so on the original SAR, the bank reported that it did not experience a loss. However, it now seems unlikely that the bank will ultimately recover the funds, as the customer has ceased all communication with the bank. Does the bank need to file a continuing activity SAR, or should the bank amend the prior SAR to include the bank’s loss of funds?
A/ The bank does not need to file a continuing SAR if there has been no new suspicious activity since the original SAR. FinCEN guidance states that a continuing activity SAR is only required when the same suspicious activity continues beyond the initial 90-day review period. However, the bank must file an amended SAR if there is a material change to the information previously reported. In this case, the bank now expects to suffer a loss from the previously reported suspicious activity, which was not reflected in the original SAR. FinCEN’s E-Filing Instructions direct filers to submit an amended SAR when new, significant information becomes available — even if the suspicious activity itself has not continued. When filing the amended SAR, the bank will need to reference the original SAR’s BSA Identifier and update the narrative and relevant fields to reflect the loss to the bank. (Response provided September 2025.)
Q/ Do the mandatory purchase requirements of the Flood Disaster Protection Act regulations apply to loans secured by mobile homes?
A/ Yes, provided the unit is located on a permanent foundation, meets the regulatory definition of “mobile home” as found in the applicable FRB, OCC and FDIC Flood regulations (12 CFR Parts 208, 22 and 339, respectively), and is eligible for coverage under the National Flood Insurance Program. To be eligible for coverage under NFIP, the current edition of the NFIP Flood Insurance Manual, which is available on FEMA’s website, states that mobile homes must:
- Be affixed to a permanent foundation that may be a poured masonry slab, foundation walls, piers or blocks, so that the wheels and axles of the mobile home do not support its weight.
- Be anchored to a permanent foundation to resist flotation, collapse, or lateral movement:
- By providing over-the-top or frame ties to ground anchors;
- In accordance with the manufacturer’s specifications; or
- In compliance with the community’s floodplain management requirements.
(Response provided September 2025.)
Q/ If a transaction involves more than one borrower, which borrower(s) must receive a copy of the Closing Disclosure required by the TILA/RESPA Integrated Disclosure rule?
A/ It depends on whether the transaction is rescindable. Under § 1026.17(d) of Regulation Z, “If there is more than one consumer, the disclosures may be made to any consumer who is primarily liable on the obligation.” Comment 2 to § 1026.17(d) clarifies further that if one consumer is merely a surety or guarantor, the disclosures must be given to the principal debtor. If the transaction is rescindable under § 1026.23, however, § 1026.17(d) requires that “the disclosures shall be made to each consumer who has the right to rescind.” (Response provided September 2025.)
Q/ My bank has a customer who is the spouse of a service member and has credit card debt that was incurred prior to her husband’s active duty. The service member is an authorized user only. Is the service member’s spouse entitled to a reduced interest rate under the Servicemember Civil Relief Act as a dependent of a servicemember or only entitled if the servicemember provided at least half of the spouse’s income for 180 days?
A/ Neither. The spouse is not covered under the SCRA provisions related to the reduced interest rate, though the spouse may be covered under other SCRA provisions.
The interest rate cap of 6 percent on loans made prior to active service under SCRA (50 USC 3937) only applies to loans incurred by “the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service …” (emphasis added.) As an authorized user only, the servicemember is not liable for the debt and thus did not “incur the debt” prior to active duty, either individually or jointly with the spouse.
While other SCRA provisions, such as those related to evictions and leases, apply to “dependents,” the interest rate cap provision does not, except as explained if the spouse is jointly liable on the loan. Also, note that regarding those provisions that are applicable to dependents, the term “dependents” includes children and spouses, regardless of the percentage of support the servicemember provides. The percentage support condition applies to individuals other than children and spouses for whom the servicemember has provided at least half of the individual’s support for 180 days immediately preceding application for relief. (50 USC 3911(4)) (Response provided September 2025.)
Answers are provided by ABA Regulatory Policy and Compliance team members Leslie Calloway, CRCM, CAFP, senior director, compliance outreach and development, and Terry Hollinger, CRCM, senior analyst. Answers do not provide, nor are they substitutes for, professional legal services.
