Topic: Selecting a Service Provider
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We understand that a bank collecting its own debts would not be considered a “debt collector” under the Fair Debt Collection Practices Act (FDCPA), but what about third parties that collect debts for our bank, such as collection agencies or tow companies that repossess vehicles? Also, does a bank have any due diligence obligations under the FDCPA? Our contract with one of our collection agencies indicates that they must comply with all federal, state, and local laws and regulations. Is this sufficient under the FDCPA?
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Yes, third party collection agencies and tow companies that you contract with to collect consumer debts and repossess automobiles for your bank would be considered “debt collectors” under the FDCPA. Additionally, we believe that you should conduct due diligence on all third-party debt collectors to manage associated risks. Such due diligence should go beyond requiring…
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We ordinarily use three title companies for our consumer and commercial real estate loans, but we also regularly use other title companies we have never reviewed before. We enter into written “proposals” with these title companies, which are basic agreements reviewing products and pricing. What is the recommended due diligence we should conduct before using these title companies for any kind of title services or loan closings for the bank?
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We believe that the appropriate level of due diligence depends on the services these title companies are providing to your bank. For example, a title company providing lender’s title insurance or escrow services to your bank may present a higher degree of risk (and consequently require a more extensive review) than a title company that…
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One of our directors has purchased a title company, and we now believe we have an affiliate relationship as defined by the Real Estate Settlement Procedures Act (RESPA). We do not refer business to this title company or use them for refinances, and we do not list the title company on our written list of service providers, since it services only one county in our service area. Do we need to provide Affiliated Business Arrangement Disclosures to all consumer mortgage applicants when we deliver Loan Estimates? Do we need to add the company to our written list of service providers?
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As it appears that you are not referring your customers to the director’s title company, we do not believe that an Affiliated Business Arrangement Disclosure Statement is required. RESPA and Regulation X require an Affiliated Business Arrangement Disclosure whenever you make a referral, including cases in which you require the use of a certain service…
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We are considering posting our consumer loan application on our website for customers to access and fill out. We order our consumer applications through a vendor. Would there be any copyright concerns with the vendor if we post the application on our website?
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We recommend reviewing the terms of your agreement with the vendor to determine whether the application may be posted on your website. If the agreement is silent on this point, you may wish to request the vendor’s permission to post the application on your website and to memorialize such permission in writing, if it is…
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We provide our loan customers with a list of service providers that includes the local office of a national title insurance company. The title insurance company has many locations, and they do not all charge the same fees. If a customer chooses a different location of the company than the one on our list, has that customer “shopped” for the service provider? When this happens, on which sections of the Loan Estimate and Closing Disclosure should we list the services?
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Whether your customer has “shopped” for the service provider when they use an office of a national title insurance company other than the one on your list depends on whether the chosen office is a separate legal entity from the one on your list. If the office location chosen by your customer corresponds to a…
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Is there a list of preferred vendors from the Illinois Treasurer for filing reports under the new Illinois Revised Uniform Unclaimed Property Act (Illinois RUUPA)?
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The Treasurer’s office has advised us that they do not have a list of “preferred vendors.” They did provide some general guidance, outlined below: All of the major CPA firms provide unclaimed property reporting services, usually within their state and local tax divisions. The Treasurer’s office reported that all of these firms had been doing…