COVID or not, things continue to roll along in the financial services industry. As a result, perhaps a review of some of the most common lending area compliance questions or potential pitfalls is in order. The goal of this article is to focus on just a few on the consumer side of lending.



Flood insurance coverage applies for each collateral improved piece of real estate located in a special flood hazard area. This includes “abundance of caution” or “incidental collateral.”


Consumer Loans – Real Estate


  • DTI is calculated once for married and non-married co-applicants, not double counting joint debt.
  • For Fair Lending purposes, exceptions to underwriting or pricing should be approved with mitigating factors explained. If the lender charges for Credit Bureau Reports, pull reports as joint on both married and unmarried co-applicants living together.
  • An OFAC check should be performed on borrowers, beneficiaries, and POA’s. On purchase transactions an OFAC check should be performed on the non-customer seller prior to proceeds disbursement.
  • A W-9 should be signed and dated by the primary borrower.


Consumer Home Equity – Open End


  • Home Equity Early Disclosure within three days
  • List of Counselors within three days
  • Notice of Right to Cancel (two copies to each party having the right to Rescind even if not a borrower)
  • Is the LTV over the Regulatory Supervisory Limit for each new loan or where cash advance occurs other than closing costs?


Consumer – UCC Secured


· Other than purchase money secured, is the DOD website or credit bureau report checked for MLA applicability (N/A for purchase money)?


Consumer Real Estate Modification


  • Appraisal Notice (within three days of application even if using prior appraisal)
  • Flood determination (land only N/A)

Consumer Loan Unsecured/Titled Vehicle


· Check DOD website or Credit Bureau Report on customer/spouse or eligible dependents for MLA applicability (purchase money N/A)

Of course, Regulation O applicability should be always considered as well.

Hopefully, this brief summary of these few items on the consumer side of lending will be of benefit.