Topic: Periodic Account Statements
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Are we required to truncate loan account numbers on loan statements and notices, such as past due notices or right to cure notices, that are sent to the customer?
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No, you are not required to truncate loan account numbers on statements or notices sent to customers. Both Illinois and federal law require truncation of credit card and debit card account numbers on receipts, but we are not aware of any law or rule that would apply this requirement to loan account numbers and other…
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Are we required to notify each account owner on a joint account when there is a change in the method or location of the statement delivery? For example, what if a joint account owner signs up for e-statements without the other account owner’s knowledge?
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No, we do not believe it is necessary to notify account holders who are not receiving periodic statements about changes in the delivery method or location. Regulation E (for electronic fund transfer accounts), Regulation DD (for savings accounts) and Regulation Z (for open-end credit) permit you to provide periodic statements to only one of the…
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On the new periodic statements, do we have to include a toll-free number if we are a community bank?
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If your institution qualifies as a “small servicer,” you will be exempt from all of the periodic statement requirements. 12 CFR 1026.41(e)(4). You will be considered a small servicer if your institution and any affiliates were servicing a total of 5,000 or fewer mortgage loans as of January 1 of this year, provided that your…
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If we send an electronic account statement to a customer, but the email notification bounces as undeliverable, are we required to switch the customer back to paper statements?
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We are not aware of any law or rule that would explicitly require you to switch customers to paper statements in this situation. However, it may be prudent to do so. Assuming that the customer has agreed to receive statements electronically (as required by the federal Electronic Signatures in Global and National Commerce (ESIGN) Act…
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If we are offering HELOCs with a 10-year draw period followed by a 15-year repayment period do we need to provide periodic statements during the repayment period?
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We believe that the bank should be able to structure its HELOCs so that they convert to a closed-end loan at the end of the draw period, though this would require closed-end disclosures at the time of conversion. We spoke to a senior counsel at the CFPB about this issue. She discussed the issue with…
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Are Illinois banks required to list the recipients of checks on deposit account statements?
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If a deposit agreement does not require a bank to identify check payees or to include copies of checks in periodic account statements, then the bank is not required to do so. The Uniform Commercial Code provides a safe harbor for banks’ liability for forged and altered checks if their account statements include information that…