Introduction

Contents Page

Module 2

 

Module 1:  Understanding Compliance

Module Overview:  Day 1

This module is designed to give you the lender the foundation for being a successful lender.  Your success as a lender starts with understanding loan compliance and the importance of following the laws each and every time you lend money.  Every lender should have a good understanding of lending regulations that are mandated by the federal government and the specific financial institution.

 

Terminal Performance Objectives:

Upon completion of this module you will be able to do the following

   Identify the main regulations that each lender must follow.

   Understand the importance of placing the appropriate lien on the collateral.

   Evaluate the collateral to minimize the banks risk exposure and compliance.

 

Criteria

Each participant will be measured by a module end progress test and by classroom discussion to ensure the participant is learning the foundations of lending and compliance.

 

Instructional Material Discussion

What is compliance?

Regulatory Compliance Documents:

   Regulation B – The Equal credit opportunity Act

   Regulation C – The Home Mortgage Disclosure Act (HUMDA)

   Regulation H – The National Flood Protection Act of the flood Disaster Protection ACT

   Regulation U – Loans Secured by Margin Stock

   Regulation Z – The Truth in Leading Act

 

Collateral and Value

An accurate value of the collateral must be calculated in order to reduce loss in the event of default on the loan.  Lenders may calculate the value of the collateral by logging on to internet to the following address.  http://www.nadaguides.com/  

   Discussion of  how to use NADA

   Discussion of collateral being greater than 100% of Loan ( LTV)

 

 

Insurance Requirements

Whenever a loan is secured by personal property no matter if it is a home, auto or other equipment, the institution must be listed with the insurance company as loss payee on the item that is being secured as collateral

   Discussion of  Insurance

The following items must be obtained before issuing a customer a check for loan proceeds.

   Name of insurance company and agent name

   Collateral description

   Insured Name- MUST BE THE NAME OF THE CUSTOMER THE LOAN IS IN

   Policy number

   Effective Date(s)

   Financial institution ( The bank you work for)

   Coverage amount equal or greater than the outstanding lien

 

Video Segment:

Participants will watch a video regarding Regulation B Equal Credit opportunity

   Discussion of Video

 

Progress Test for Module 1  Please use additional paper if needed for answers

  1. What is Collateral?
  2. Name the items that must be on the insurance documentation?
  3. What is Loan to Value?
  4. What is Regulation B?
  5. What Regulation talks about Truth in Lending?

 

Wrap up Session

Today I Learned ……..  or I discovered ………..