We do not recommend sending any loan notices to a borrower who has filed for bankruptcy without consulting with bank counsel.

The Bankruptcy Code prohibits creditors from attempting to collect a debt after a borrower has filed for bankruptcy — this is known as the “automatic stay.” A bankruptcy court also may impose similar limitations after a bankruptcy case has been discharged. Sending loan notices to a borrower could be viewed as attempting to collect a debt owed to your bank, which would violate the automatic stay. (For these reasons, Regulation Z exempts large servicers from the periodic statement requirement for mortgages during the pendency of the borrower’s bankruptcy proceedings.)

However, the same concerns do not apply to statements for the customer’s deposit account. We believe that a bank may continue sending deposit account statements and notices to a customer who has filed for bankruptcy, provided that those communications do not attempt to collect a debt (such as an overdraft or account fee).

For resources related to our guidance, please see:

• Bankruptcy Code, 11 USC 362(a)(6) (A petition filing for bankruptcy “operates as a stay, applicable to all entities, of . . . (6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title; . . .”)

• Regulation Z, 12 CFR 1026.41(e)(5), Periodic statements for residential mortgage loans (“A servicer is exempt from the requirements of this section for a mortgage loan while the consumer is a debtor in bankruptcy under Title 11 of the United States Code.”)