The Ten Most Common Violations in the Tenth District
(Based on examinations from 1/1/06 through 12/31/06)

 

 

Two states in the 10th District (Wyoming and Oklahoma) are exempt from Chapters 2 and 5 of the Federal Truth in Lending Act, and applicable portions of Regulations M and Z.  The results of the list may be skewed due to these exemptions.

 

REGULATION &
SECTION

VIOLATION

% OF EXAMS THE VIOLATION WAS CITED IN 2006

Regulation B 202.13(a)(1)(i) Violations occurred when banks failed to obtain monitoring information when required.  They often occurred when customers completed the wrong credit application or when banks failed to document monitoring information by visual observation or surname when credit applicants chose not to complete monitoring information. 46.8%
Real Estate Settlement Procedures Act (RESPA) Regulation X 3500.8(b) Violations occurred when the HUD1 or HUD1A were not completed in accordance with Appendix A to the Regulation.  Often, the problem involved either omitting the name of a third party ultimately receiving payment for a service or not disclosing charges paid outside of closing. 46.8%
Regulation H 208.25(c)(1) Violations occurred when banks did not ensure that adequate flood insurance coverage was in place before a loan secured by real property in a special flood hazard area was made, extended, increased or renewed.  For more information on insurance coverage requirements and limitations, see the Federal Emergency Management Agency (FEMA) Mandatory Purchase of Flood Insurance (PDF File.) 42.6%
Regulation H 208.25(f)(1) Problems resulted from banks failing to provide evidence of special flood hazard determinations (SFHD), completing the SFHD form incorrectly, or not performing SFHDs prior to loan consummation. 42.6%
Regulation B 202.5(b) The violations happened when banks collected monitoring information when prohibited.  Under Regulation B, monitoring information should only be collected on credit applications for the purchase or refinance of a principal dwelling. 34.0%
Regulation B 202.7(d)(1) When the bank required or obtained the signature of an applicant's spouse or other person (other than a joint applicant) without evidence of a joint application, this provision of the Regulation was violated. 29.8%
Regulation DD 226.5(b)(1) Violations occurred when the bank did not provide proper account disclosures as required in 230.4(b) for maturing time deposits with a maturity period longer than a year.  Most problems resulted from incomplete disclosures or disclosures not being provided timely. 19.1%
Real Estate Settlement Procedures Act (RESPA) Regulation X 3500.21(b)(1) These problems occurred when no MST disclosure was given during a face-to-face application or within three days of receipt of a written application.  Other violations occurred when the MST disclosure was inadequate. 19.1%
Regulation C 203.4(a)(10) Violations resulted when HMDA reporters failed to collect or improperly reported information on applicants' ethnicity, race, sex, or gross annual income.  For further guidance in completing a HMDA LAR, and for a listing of codes refer to "A Guide to HMDA Reporting: Getting it Right!" (FFIEC Link). 17.0%
Real Estate Settlement Procedures Act (RESPA) Regulation X 3500.7(a) Violations occurred when banks did not provide good faith estimates (GFEs) within three business days of receiving an application subject to RESPA.  Remember that GFEs must be given to denied RESPA loan applicants if the applications are not denied within three business days of the application date. (§3500.7(b)) 17.0%