Can a Bank Share My Information With Another Lender?
Full Question:
Answer:
Any financial institution that provides financial products or services to consumers must comply with the privacy provisions of Title V of the Gramm-Leach-Bliley Act (“GLB Act”) (15 U.S.C. §§ 6801-09) and the Privacy Rule. The Act establishes specific procedures and exemptions concerning the release of the financial records of customers and imposes limitations on and requirements of financial institutions prior to the release of such information to the federal government. The answer will depend on all the facts involved, such as whether privacy notices were provided, whether you opted out, and whether the entities are affiliated. Please see the link below to determine applicability:
http://www.federalreserve.gov/regulations/cg/faq.pdf
The Truth in Lending Act (TILA), covers only closed-end loans that are secured by the consumer's principal dwelling. (The law by definition does not cover home equity lines of credit, which are not considered "closed-end loans." Reverse mortgages are also excluded.)
To be covered, one of the following must apply::
-An annual percentage rate (APR) that is more than 10 percentage points above the yield on Treasury securities with comparable maturities.
-Upfront points and fees, including broker's fees, of at least $400, that exceed 8% of the total loan amount.
In addition, the following terms are generally prohibited:
-Prepayment penalties, except in the first five years of the loan. It also prohibits prepayment penalties during refinancing with the same creditor or an affiliate.
-Any terms that make it impossible, or nearly impossible, for homeowners to cure a default or that attempt to unduly inflate the amount due on a loan after default.
-Balloon payments with terms shorter than five years and negative amortization (when the original loan amount is increased because the monthly payments do not ccover the interest due).
-Extending credit without regard for ability to pay.
-Payments to be made directly to home improvement contractors.
The law prohibits several loan terms. If any of these prohibited terms are included in a home equity loan contract, the contract may be rendered unenforceable and the security interest in the home removed. If the law is violated, damages may include attorneys' fees and costs, as well as damages for all finance charges and fees by the homeowner.
For further discussion, please see:
http://www.fdic.gov/consumers/consumer/rights/
http://www.federalreserve.gov/pubs/complaints/laws.htm
