Topic: Periodic Account Statements
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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 1026.41(a) – (d) (Timing, form and content requirements for…
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We provide annual escrow account statements to our mortgage borrowers. Does Illinois law require us to send receipts for every property tax payment?
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No, Illinois law does not require lenders to send receipts for each property tax payment, provided that the lender is sending an annual escrow account notice (such as the annual notice required by RESPA) with contact information for borrowers to access additional details about individual property tax payments (such as through a toll-free number or…
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We are one of two charters under the same holding company. We are printing statement stuffers advertising our overdraft services, which are identical. The envelope and periodic statements both include our bank’s name. We don’t want to pay to print up separate flyers for each charter, which would be identical but for the bank names. Can we print these without any bank name so that both banks can use the statement stuffers?
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Yes, we believe it is permissible to use statement stuffers that do not identify your bank’s name. We are not aware of any specific law or regulation that would require a bank to state its name in a statement stuffer when the bank’s identity can be inferred from other materials in the same mailing. However,…
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When we receive returned mail from a customer’s address, and make several attempts to contact the customer for an updated address, do we need to continue mailing account statements?
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No, you are not required to continue mailing periodic statements in this situation. In fact, it may be advisable to discontinue mailing periodic statements to an address that you know to be incorrect, to prevent the statements and the personal financial information contained in them from falling into the wrong hands. We recommend monitoring the…
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One of our commercial customers reported several checks as forgeries promptly after receiving its account statement. The customer’s employee had stolen the checks and forged them. Should we file a police report? If the customer receives restitution from its employee, would we be entitled to receive that restitution?
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Since a police report already has been filed regarding the forgeries, the question becomes whether the bank should file a suspicious activity report, which would be required if the total dollar amount of the forgeries exceeds $5,000. Also, under the Uniform Commercial Code (UCC), in most circumstances, you will need to reimburse the customer for…
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Some of our customer’s mortgage loan payments are auto-debited from deposit accounts held at our bank. In those cases, does a monthly checking account statement satisfy Regulation Z’s mortgage periodic statement requirements, since it will show the debits for the mortgage payments? We service fewer than 5,000 mortgages, but we do sell some of our loans on the secondary market.
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It is possible to combine the periodic statements required for closed-end mortgage loans with checking account statements, provided that you include all of the additional disclosures required for mortgage periodic statements. However, Regulation Z exempts your institution from the mortgage periodic statement requirements altogether if you qualify as a “small servicer.” As stated in a…
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Under the Mortgage Escrow Account Act, we must notify a customer 45 business days after paying property taxes, but we also can send an alternative annual notice. Will we meet the annual notice requirement by sending the annual escrow account statement required by RESPA, since it includes our contact information?
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Yes, the annual escrow account statement required by RESPA should be sufficient, assuming that the contact information on the notice (such as a phone number, email address, or internet website) provides a means of accessing the required information about property tax payments. The Illinois Mortgage Escrow Account Act requires lenders to provide an annual escrow…
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What should we do when we receive a returned statement for an individually or jointly held deposit account marked “deceased” by the post office?
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For both jointly and individually held deposit accounts, we recommend discontinuing the mailing of account statements to the address that was marked “deceased.” Individual Accounts Once you have received notice of the customer’s death, you should hold onto any subsequent account statements until an an executor, administrator, trustee or other appropriate representative of the deceased…
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For how long should we retain deposit account statements and copies of checks?
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You should retain deposit account statements for at least five years and copies of checks for at least seven years. The FinCEN’s Bank Secrecy Act regulations require you to retain deposit account statements for five years after they are created. The Uniform Commercial Code requires financial institutions to retain checks, or legible copies of checks,…
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We qualify for the alternative delivery method for our annual privacy notices. How should we notify CD and loan customers about the availability of the privacy notice, since we do not send those customers periodic statements or coupon books?
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For any customers who do not receive periodic statements or other notices from your institution at least annually, you must provide a full annual privacy notice once per year — you cannot rely on the alternative delivery method for those customers. The alternative delivery method requirements include a requirement to provide a “notice of availability”…