While we cannot provide an exhaustive list of all necessary disclosures without knowing the details of the specific loans, we have highlighted some of the possibly applicable disclosure requirements below.

Mortgage loans extended for primarily commercial or agricultural purposes are not subject to the TILA-RESPA Integrated Disclosure (TRID) requirements. However, certain disclosure requirements apply to loans or applications for loans secured by real property, whether or not the loan purpose is commercial or agricultural.

For example, Regulation B requires certain appraisal disclosures for credit applications secured by a first lien on a dwelling. If a commercial or agricultural loan will be secured by a first lien on a dwelling, you must provide the loan applicant with a copy of all appraisals and written valuations developed in connection with the loan application, as well as a notice of the right to receive such appraisals and written valuations.

Also, if a commercial or agricultural loan is secured by a building or mobile home in a special flood hazard area under FEMA's Flood Insurance Rate Map or the Flood Hazard Boundary Map, you must provide the requisite written notice to the borrower regarding flood insurance.

Also, if you take an adverse action with respect to an application for business credit (including commercial or agricultural loans), such as a denial or counteroffer, you are required to send the applicant an adverse action notice under Regulation B. In addition, although the Fair Credit Reporting Act generally addresses consumer credit transactions, it also may require an adverse action notice when an individual is a co-applicant for a commercial or agricultural loan and an adverse action is taken based at least in part on information in the individual’s consumer credit report.

These disclosure requirements and other requirements for commercial loans are further discussed in a Federal Reserve Bank of Philadelphia publication linked to in our resources below, Consumer Compliance Requirements for Commercial Products and Services.

Terms and Conditions

Regarding the terms and conditions of your commercial and agricultural loans, those would be a business decision to be agreed on by your bank and its borrowers.

The Illinois Credit Agreements Act simply requires the “relevant terms and conditions” of commercial or agricultural loans be set forth in writing. Additionally, for safety and soundness purposes, the Comptroller’s Handbook on Agricultural Lending advises banks to “identify appropriate terms and conditions, based on risk, for lending on different types of reserves and equipment.” Other than those guideposts, there are no laws or regulations that prescribe particular terms and conditions for commercial and agricultural loans, which would be highly dependent on the borrower, collateral and numerous other factors.

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.3(a)(1) (“The following transactions are not subject to this part or, if the exemption is limited to specified provisions of this part, are not subject to those provisions: . . . An extension of credit primarily for a business, commercial or agricultural purpose.”)

• Regulation X, 12 CFR 1024.5 (“Coverage of RESPA. . . . Exemptions. . . . (b)(2) Business purpose loans. An extension of credit primarily for a business, commercial, or agricultural purpose, as defined by 12 CFR 1026.3(a)(1) of Regulation Z. Persons may rely on Regulation Z in determining whether the exemption applies.”)

• Regulation B, Official Interpretations, Paragraph 1002.1(a), Comment 1 (“The Equal Credit Opportunity Act and Regulation B apply to all credit — commercial as well as personal — without regard to the nature or type of the credit or the creditor . . . .”)

• Regulation B, 12 CFR 1002.14(a)(2) (“For applications subject to paragraph (a)(1) of this section, a creditor shall mail or deliver to an applicant, not later than the third business day after the creditor receives an application for credit that is to be secured by a first lien on a dwelling, a notice in writing of the applicant’s right to receive a copy of all written appraisals developed in connection with the application. . . .”)

• Regulation B, 12 CFR 1002.14(a)(1) (“A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling. A creditor shall provide a copy of each such appraisal or other written valuation promptly upon completion, or three business days prior to consummation of the transaction (for closed-end credit) or account opening (for open-end credit), whichever is earlier.”)

• Regulation B, 12 CFR 1002, Form C-9, Sample Disclosure of Right to Receive a Copy of Appraisals (“We may order an appraisal to determine the property’s value and charge you for this appraisal. We will promptly give you a copy of any appraisal, even if your loan does not close. You can pay for an additional appraisal for your own use at your own cost.”)

• OCC Flood Insurance Rules, 12 CFR 22.9 (“When a national bank or Federal savings association makes, increases, extends, or renews a loan secured by a building or a mobile home located or to be located in a special flood hazard area, the bank or savings association shall mail or deliver a written notice to the borrower and to the servicer in all cases whether or not flood insurance is available under the Act for the collateral securing the loan.”)

• 12 CFR Appendix A to Part 22, Sample Form of Notice of Special Flood Hazards and Availability of Federal Disaster Relief Assistance

• Regulation B, 12 CFR 1002.2(g) (“Business credit refers to extensions of credit primarily for business or commercial (including agricultural) purposes, but excluding extensions of credit of the types described in §§ 1002.3(a)–(d).”)

• Regulation B, 12 CFR 1002.9(a)(3) (“Notification to business credit applicants. For business credit, a creditor shall comply with the [adverse action] notification requirements of this section in the following manner: . . .”)

• Fair Credit Reporting Act, 15 USC 1681m(a) (“If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall (1) provide oral, written, or electronic notice of the adverse action to the consumer . . . .”)

• Fair Credit Reporting Act, 15 USC 1691(d)(6) (“For purposes of this subsection, the term ‘adverse action’ means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit.”)

• Consumer Compliance Outlook, Consumer Compliance Requirements for Commercial Products and Services (First Quarter 2015) (“[[i][/i]I]f a consumer is a coapplicant for a commercial loan and adverse action is taken, based in whole or in part on information in the consumer’s report, and the creditor is unsure if an FCRA adverse notice is required, an adverse action notice may be provided.”)

• Illinois Banking Act, 205 ILCS 5/5e (“Notwithstanding the provisions of any other law in connection with extensions of credit, a State bank may elect to contract for and receive interest, fees, and other charges for extensions of credit subject only to the provisions of subsection (1) of Section 4 of the Interest Act” and the laws applicable to real estate loans, provided that the bank sets fees based on its “prudent business judgment and safe and sound operating standards.”)

• Interest Act, 815 ILCS 205/4(1) (“It is lawful for a state bank or a branch of an out-of-state bank, as those terms are defined in Section 2 of the Illinois Banking Act, to receive or to contract to receive and collect interest and charges at any rate or rates agreed upon by the bank or branch and the borrower.”)

• Credit Agreements Act, 815 ILCS 160/2 (“Credit agreements to be in writing. A debtor may not maintain an action on or in any way related to a credit agreement unless the credit agreement is in writing, expresses an agreement or commitment to lend money or extend credit or delay or forbear repayment of money, sets forth the relevant terms and conditions, and is signed by the creditor and the debtor.”)

• Credit Agreements Act, 815 ILCS 160/1 (“‘Credit agreement’ means an agreement or commitment by a creditor to lend money or extend credit or delay or forbear repayment of money not primarily for personal, family or household purposes, and not in connection with the issuance of credit cards.”)

• Comptroller’s Handbook, Agricultural Lending (October 15, 2018), page 48 (“Has the board of directors, consistent with its duties and responsibilities, adopted written Ag loan policies that are consistent with safe and sound banking practices and appropriate to the size of the bank and the nature and scope of the bank’s operations? In particular, do the bank’s policies . . . identify appropriate terms and conditions, based on risk, for lending on different types of reserves and equipment?”)