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Are we required to send out a payment receipts to customers whose loan payments are automatically deducted from their checking or savings account at another financial institution? – IBA Compliance Connection

IBA Compliance Connection

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Are we required to send out a payment receipts to customers whose loan payments are automatically deducted from their checking or savings account at another financial institution?

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No, we are not aware of any requirement to issue a payment receipt confirmation when you receive an automatic loan payment from a customer’s account at another bank, unless your loan agreement includes such a requirement.

For resources related to our guidance, please see:

  • Regulation Z, 12 CFR 1026.7(a)(b) (Timing, form and content requirements for periodic statements in open-end credit plans, including home equity plans.)
  • Regulation Z, 12 CFR 1026.41(e)(4) (Exemption from mortgage periodic statement requirements for small servicers.)
  • Regulation Z, 12 CFR 1026.10(a) (“A creditor shall credit a payment to the consumer's account as of the date of receipt, except when a delay in crediting does not result in a finance or other charge or except as provided in paragraph (b) of this section.”)
  • Regulation Z, 12 CFR 1026.36(c)(1)(i) (“No servicer shall fail to credit a periodic payment to the consumer's loan account as of the date of receipt…”)