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Bulletin
Friday, August 8, 1975
Banking Bulletin #2(Rev.)

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Banking_Bulletin_%232Rev.pdf

Record Retention: Financial Institutions, Credit Unions, Independent Trust Companies & Licensees

Regulation
Tuesday, July 1, 2014
B-2014-01

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Regulation%20B-2014-01_record_retention.pdf

REGULATION B-2014-01

RECORD RETENTION

FINANCIAL INSTITUTIONS, CREDIT UNIONS,

INDEPENDENT TRUST COMPANIES & LICENSEES

(This Regulation Replaces Regulation B-92-1)

(Effective Date - July 1, 2014)

 

SECTION ONE: APPLICABILITY AND SCOPE

1.1 This regulation ("Regulation") is issued pursuant to 8 V.S.A. §§ 15, 2214, 2766, 2914, 11301, and 30401.

1.2 This Regulation applies to:

a. financial institutions as defined in 8 V.S.A. § 11101(32);

b. credit unions as defined by 8 V.S.A. § 30101(5);

c. independent trust companies regulated under 8 V.S.A. Chapter 77; and

d. all other state licensed financial businesses regulated under Parts 2, 5, and 6 of Title 8 V.S.A., including: Licensed Lenders; Mortgage Brokers; Loan Servicers; Sales Finance Companies; Money Servicers; Check Cashing & Currency Exchangers; and Debt Adjusters

(the “Institutions”).

The types of Institutions included in these definitions shall include federally or nationally chartered Institutions, insofar as this Regulation does not contravene paramount federal law.

1.3 The general intent of this Regulation is to require that an Institution be able to rebuild a transaction for seven years from the date of the transaction or seven years from the payoff date of a loan, as applicable. Notwithstanding the foregoing, this Regulation requires that certain records be held longer than seven years and gives Institutions the option to hold some records for less than seven years, as set forth in Appendix I.

1.4 This Regulation applies to records created on or after July 1, 2014.

1.5 This Regulation does not apply to those records created prior to July 1, 2014. The retention period applicable to such records shall be the period required at the time such record was created.

SECTION TWO: PROCEDURES

2.1 An Institution shall adopt and implement a written record management policy that includes:

a. retention periods for all of the Institution’s records;

b. the manner of retention;

c. the method of disposal of such records upon expiration of the retention period; and

d. procedures to protect records from theft, fire, vandalism, loss, damage, or unauthorized access.

In addition to the retention requirements, any record that contains confidential information should be treated in accordance with the Institution’s confidentiality, privacy, and security policies.

2.2 Institutions shall retain all records for at least the minimum time period specified in this Regulation.

2.3 If the Institution does not maintain a record enumerated in this Regulation, but maintains a similar record with equivalent information, the Institution's records shall be retained for the period of time specified herein for such equivalent records.

2.4 In the event a retention period imposed by other state laws or regulations, federal laws or regulations, court orders, other governmental agencies, or Institution policies conflicts with the retention period set forth in this Regulation, the longer retention period shall control.

2.5 Records that are not specifically enumerated in this Regulation, but that are subject to retention requirements pursuant to other state laws or regulations, federal laws or regulation, court orders, or Institution policies, shall be retained for the period specified by such applicable requirement.

2.6 Records that are not specifically enumerated in Appendix I of this Regulation and that are not subject to retention requirements pursuant to other state laws or regulations, federal laws or regulation, court orders, or Institution policies may be destroyed at the end of seven (7) years from the date of the transaction or at the end of seven (7) years from the payoff date of a loan, as applicable, upon authorization of the Institution’s governing body.

2.7 Records that are not specifically enumerated in Appendix I, that are not subject to retention requirements pursuant to other state laws or regulations, federal laws or regulations, or court orders, and are not part of an actual transaction or loan may be destroyed at the discretion of the Institution as specified in its record retention policy as authorized by the Institution’s governing body.

2.8 The content of the record and not the medium in which it is sent or received determines the applicable record retention period. (For example, a document received by e-mail may be correspondence, a promissory note, or a casualty liability policy depending on the content of the e-mail.)

2.9 All records must be maintained in a form and manner that is consistent with reasonable business practices and with any applicable law or regulation. Without limiting the foregoing, records may be maintained in original form, as a copy thereof, or in a manner that can accurately produce, regenerate, or transmit the original record. Records retained in paper, photograph, microprocess, magnetic, digital, mechanical or electronic media, or in or by any other information storage device or process which forms a durable medium shall be treated as the equivalent of original records for purposes of compliance with this Regulation.

2.10 Institutions shall dispose of records in accordance with the Vermont Document Safe Destruction Act, 9 V.S.A. Chapter 62, subchapter 4, or any successor to such Act, to the extent such Act applies to the Institution.

SECTION THREE: ELECTRONIC DATA PROCESSING

3.1 Retention periods specified for records listed in this Regulation apply to equivalent records produced or maintained by means of electronic data processing.

3.2 An Institution shall adopt and implement a written policy to protect electronic data processing files from theft, fire, vandalism, loss, damage, or unauthorized access.

SECTION FOUR: SANCTIONS

4.1 In addition to any other sanctions available to the Commissioner, violations of this Regulation are subject to the provisions of 8 V.S.A. Chapter 201, subchapter 6.


APPENDIX I

RECORDS THAT REQUIRE PERMANENT RETENTION

Articles of Incorporation or Other Association, Bylaws and Other Records of Organization, Amendments, etc.

Permanent

Administration - General

Capital Stock Certificates - Cancelled

Permanent

Administration - General

Capital Stock Certificate Records and/or Stubs

Permanent

Administration - General

Capital Stock Ledger (Shareholders)

Permanent

Administration - General

Capital Stock Transfer Ledger/Register

Permanent

Administration - General

Certificates of Authority/Approval, Charter

Permanent

Administration - General

Charged-off Asset Records

Permanent

Investments, Loans, Loans - Real Estate

General Ledger (Income & Expense, Statement of Condition)

Permanent

Accounting & Auditing, General Ledger

Member Lists - Non-profit, Cooperative, Limited Liability and Mutual Entities

Permanent

Administration - General

Minutes Book of Meetings (Stockholder, Members, Directors)

Permanent

Administration - General

Minutes of Audit, Credit & Supervisory Committee Meetings

Permanent

Administration - General

Minutes of Investment &Trust Committee Meetings

Permanent

Administration - General

Reports of Examination and Responses – State and Federal

Permanent

Administration - General

Surety Bond

Permanent

Administration - General

Unclaimed or Escheated Property Report

Permanent

Correspondent Accounts, Deposits - Savings & Time, Deposits - Transaction, Individual Retirement Accounts, Safe Deposit & Safekeeping


 

 

TRUST RECORDS

TRUST RECORDS

MINIMUM RECORD RETENTION PERIODS

ACCOUNTING & AUDITING

Deposit Confirmations

3 Years

General Ledger (Income & Expense, Statement of Condition)

Permanent

Loan Confirmations

3 Years

Reconcilements to General Ledger

3 Years

ADMINISTRATION (CORPORATE)

General

Articles of Incorporation or Other Association, Bylaws and Other Records of Organization, Amendments, etc.

Permanent

Capital Stock Certificates - Cancelled

Permanent

Capital Stock Certificate Records and/or Stubs

Permanent

Capital Stock Ledger (Shareholders)

Permanent

Capital Stock Transfer Ledger/Register

Permanent

Certificates of Authority/Approval, Charter

Permanent

FDIC Assessment Base Records Determination

5 Years

Member Lists - Non-profit, Cooperative, Limited Liability and Mutual Entities

Permanent

Minutes Book of Meetings (Stockholder, Members, Directors)

Permanent

Minutes of Audit, Credit & Supervisory Committee Meetings

Permanent

Minutes of Investment & Trust Committee Meetings

Permanent

Reports of Examination and Responses – State and Federal

Permanent

Statements of Directors and Principal Officers

3 Years

Insurance

Blanket Bond & Employee Bonds & Fidelity Bonds

21 Years

Bonds of Indemnity

7 Years After Cancellation

Casualty Liability Policies

3 Years

Fire, Accident & Liability Policies

21 Years

Records of All Insurance Policies (Showing Policy Numbers, Premiums Paid, and Amounts Recovered)

3 Years

Surety Bond

Permanent

COLLECTIONS (not related to Debt Collection)

Collection Payment Records

1 Year

Collection Register

1 Year

Coupon Cash Letters (Outgoing)

1 Year

Incoming Collection Letters

1 Year

Incoming Contract or Note Letters

7 Years After Closing

Outgoing Collection Letters and Register

1 Year

Settlement

3 Years

CORRESPONDENT ACCOUNTS (DUE TO & DUE FROM)

Advices & Drafts

3 Years

Incoming Cash Letter Memos

3 Years

Information and Documents Pertaining to Issuance of Duplicate Checks and Drafts

7 Years After Check Draft Paid

Records of Foreign Financial Accounts

7 Years After Account Closed

Resolutions

7 Years After Account Closed

Signature Cards

7 Years After Account Closed

Statements & Reconcilements

3 Years

Unclaimed or Escheated Property Report

Permanent

Unclaimed or Escheated Property – Records of Ownership

10 Years After Surrender of Funds to the State Treasurer’s Office

Undelivered Statements and Canceled Checks

2 Years

CREDIT CARDS/DEBIT CARDS/STORED VALUE

Credit Applications and Information (Declined)

25 Months

Transaction History

7 Years After Account Closed

CUSTOMER SERVICE

Change in Address

1 Year

Correspondence

3 Years

Securities Buy and Sell Orders

3 Years After Date of Order

DEPOSITS - SAVINGS & TIME

Affidavits of Lost Passbooks and Records of Transactions Based Thereon

7 Years After Closing

Certificates of Deposit

7 Years After Closing

Copies of Advices of Deposits

2 Years

Copies of Advices of Debits and Credits

2 Years

Customer Statements

3 Years

Interest Report (Accrual Records)

3 Years

Power of Attorney

7 Years After Closing

Resolutions and Customer Authorizations

7 Years After Closing

Signature Cards, unless escheated

7 Years After Closing

Surety Bond for Lost Certificate

7 Years After Closing

Taxpayer ID# or SS# of Depositor

7 Years After Closing

Unclaimed or Escheated Property Report

Permanent

Unclaimed or Escheated Property – Records of Ownership

10 Years After Surrender of Funds to the State Treasurer’s Office

DEPOSITS - TRANSACTION (CHECKING, SHARE, MONEY MARKET)

Account Analysis (Work Sheets or Cards, Average Balance Cards, Interest Computation Records, Service Charge Records)

2 Years

Bookkeepers Daily List of Checks Charged in Total to Customer Accounts (Short Lists)

2 Years

Copies of Advices of Deposits

2 Years

Copies of Advices of Debits and Credits

2 Years

Customer Statements

3 Years

Daily Reports of Overdrafts

6 Months

Individual Ledgers

2 Years

Kiting Suspect Report

6 Months

Partnership Agreement and Authority

7 Years After Closing

Resolutions and Customer Authorizations

7 Years After Closing

Service Charges

2 Years

Signature Cards, unless escheated

7 Years After Closing

Statement Mailing Order

1 Year

Statement Receipt Cards

1 Year

Stop Payment Order

1 Year

Transaction Journal

3 Years

Unclaimed or Escheated Property Report

Permanent

Unclaimed or Escheated Property – Records of Ownership

10 Years After Surrender of Funds to the State Treasurer’s Office

GENERAL

Correspondence

3 Years

Night Depository Agreements

7 Years After Termination of Agreement

Securitization

7 Years After Termination

Vault Records, Openings and Closings

1 Year

GENERAL LEDGER

Income & Expense Statement

Permanent

Statement of Condition

Permanent

INTERNATIONAL DEPARTMENT/WIRE/MONEY TRANSFER

Foreign Asset Control Records

3 Years

Foreign Draft Applications

5 Years

Foreign Mail Transfer Applications

5 Years

Letters of Credit Applications

7 Years After Payment in Full

INDIVIDUAL RETIREMENT ACCOUNTS

Account Agreements

7 Years After Last Distribution

Customer Statements

3 Years

Signature Cards, unless escheated

7 Years After Closing

Taxpayer ID# or SS# of Depositor

7 Years After Closing

Unclaimed or Escheated Property Report

Permanent

Unclaimed or Escheated Property - Records of Ownership

10 Years After Surrender of Funds to the State Treasurer’s Office

INVESTMENTS

Charged-off Asset Records

Permanent

Credit Information Regarding Securities Underwritten or Purchased for Own Account

7 Years After Closing

LOANS (excluding REAL ESTATE LOANS)

Charged-off Asset Records

Permanent

Correspondence

3 Years

Credit Applications and Information (Declined)

25 Months

Credit Files

7 Years After Closing

Evidence of Compliance With Fair Credit Reporting Act

2 Years After Closing

Evidence of Compliance with Regulation Z Truth in Lending

3 Years After Each Required Disclosure

Letter of Credit Applications

7 Years After Payment in Full

Note or Discount Register (If Used as Book of Original Entry With Descriptions)

6 Years After Termination of Account

Resolutions for Commercial Loans

7 Years After Closing

Statement Regarding Loan Secured by Stock

7 Years After Closing

Transaction History

7 Years After Closing

LOANS - REAL ESTATE

Charged-off Asset Records

Permanent

Evidence of Compliance with Fair Credit Reporting Act

2 Years

Evidence of Compliance with Regulation Z Truth in Lending

3 Years After Each Required Disclosure

Guaranteed Loans Complete Files

7 Years After Termination

Home Mortgage Disclosure Act Information

5 Years

Ledger Cards

7 Years After Termination

Record of Deeds

40 Years

RESPA Settlement Statements

2 Years After Closing Account

PERSONNEL

Advertisements and Notices

1 Year After Personnel Action

Attendance Records (Time Cards)

3 Years

Employment Application (Rejected)

1 Year

Occupational Safety and Health Act (OSHA) Forms

5 Years

PROOF, CLEARING, AND TRANSIT

Copies of Advices of Corrections

3 Years

Incoming Cash Letters

3 Years

In-clearing Proof Sheets and/or Tapes

3 Years

Out-clearing Proof Sheets and/or Tapes

3 Years

Outgoing Cash Letters

3 Years

SAFE DEPOSIT & SAFEKEEPING

Leases or Contracts, Closed Accounts

7 Years After Closing

Signature Cards, unless escheated

7 Years After Closing

Taxpayer ID# or SS# of Depositor

7 Years After Closing

Unclaimed or Escheated Property Report

Permanent

Unclaimed or Escheated Property - Records of Ownership

10 Years After Surrender of Funds to the State Treasurer’s Office

TELLERS

ATM & Night Deposit Envelopes

3 Months

Cash Item Register

2 Years

Cashier, Certified, Official, Treasurers Checks

7 Years After Clearing

Tellers’ Blotter of Journals

1 Year

Tellers’ Difference Record

1 Year

Vault Records, Openings and Closings

1 Year

TRUST RECORDS

Corporate Trusts & Employee Benefit Plans

Accounting of Other Fiduciaries and Decrees, Receipts, or Releases Settling Accounts

7 Years After Termination of Trust Account

Bond Ledger

7 Years After Termination of Trust Account

Brokers’ Purchase and Sale Confirmation

3 Years

Brokers’ Statements

3 Years

Buy and Sell Orders

3 Years

Corporate Trust Ledger

21 Years

Correspondence

7 Years After Termination of Trust Account

Governing Instruments

21 Years After Termination of Trust Account

Receipts or Disposition for Canceled Stock Certificates, Canceled Bonds and Coupons

7 Years After Termination of Trust Account

Records of Stock Issuance & Transfer

7 Years After Termination of Trust Account

Registration Journals

7 Years After Termination of Trust Account

Trust Asset Records

7 Years After Termination of Trust Account

Trust Journals (If Source of Original Entry)

7 Years After Termination of Trust Account

Personal Trusts And Agency Relationships

Accounting of Other Fiduciaries and Decrees, Receipts, or Releases Settling Accounts

7 Years After Termination of Trust Account

Brokers’ Confirmations

3 Years

Brokers’ Statements

3 Years

Buy and Sell Orders

3 Years

Correspondence

7 Years After Termination of Trust Account

Governing Instruments

21 Years After Termination of Trust Account

Inventory Records

7 Years After Termination of Trust Account

Letters of Appointment

7 Years After Termination of Appointment

Probate Records

7 Years After Termination of Trust Account

Receipts or Disposition for Canceled Stock Certificates, Canceled Bonds and Coupons

7 Years After Termination of Trust Account

Records of Stock Issuance & Transfer

7 Years After Termination of Trust Account

Trust Agreements

7 Years After Date of Last Entry

UNCLAIMED PROPERTY

Unclaimed Deposit Account Withdrawal Tickets or Checks

7 Years After Date Reportable

Unclaimed or Escheated Property Deposit Ledgers (To Include Record of Date of Last Transaction or Communication From Owner)

7 Years After Date Reportable

Unclaimed or Escheated Property Report

Permanent

Unclaimed or Escheated Property - Records of Ownership

10 Years After Surrender of Funds to the State Treasurer’s Office

Regulation B-06-1: Pertaining to State-Chartered Credit Unions

Regulation
Tuesday, July 1, 2014
B-06-1

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Regulation%20B-06-1_Revised_07_01_2014.pdf

Vermont Banking Division

REGULATION B-06-1: Pertaining to State-Chartered Credit Unions

Effective 8/29/07

(Revised effective July 1, 2014)

INTRODUCTION: Regulation B-06-1 supersedes former credit union regulation B-83-1, and is promulgated by the Commissioner under the authority established by 8 V.S.A. Section 30203.

Section I. Minimum Bond Coverage

1. The governing body of each credit union shall acquire and maintain a blanket fidelity bond covering the directors, officers, employees, members of official committees, attorneys at law, and other agents with protection against loss to the credit union caused by dishonesty, burglary, robbery, larceny, theft, holdup, forgery or alteration of instruments, misplacement, or mysterious disappearance and for faithful performance of duty. (See Title 8, V.S.A., Sections 31302(3) and 31602(a)). This Section I prescribes the amount of minimum bond coverage required for all credit unions, which in no way absolves the governing body of their responsibility as noted in this regulation and in applicable statute.

2. The governing body of each credit union shall, at least annually, carefully review the bond and insurance coverage in force in order to ascertain its adequacy in relation to the exposure and potential risks facing the credit union and to the minimum requirements set forth herein by the Department of Banking, Insurance, Securities and Health Care Administration (the “Department”).

3. The form of surety bond, at a minimum, shall satisfy the requirements of 8 V.S.A. §31602.  The credit union shall receive written confirmation from the bonding company that the surety bond, at a minimum, covers the directors, officers, employees, members of official committees, attorneys at law, and other agents and that the bond provides protection against loss caused by dishonesty, burglary, robbery, larceny, theft, holdup, forgery or alteration of instruments, misplacement or mysterious disappearance, and for faithful performance of duty.

4. The following schedule sets forth the minimum coverage and maximum deductible requirements:

Assets Coverage Deductible
0-$1,000,000 lesser of assets or $100,000 $2,000
$1,000,001-$4,000,000 $250,000 $4,000
$4,000,001-$50,000,000 $250,000 plus $50,000 for each million or fraction thereof of assets over $4,000,000 $2,000 plus 1/1000 of the total assets
Over $50,000,000 $2,550,000 plus $10,000 for each million or fraction thereof of assets over $50,000,000 $2,000 plus 1/1000 of the total assets up to a maximum deductible of $200,000

 

 

 

 

 

 

 

 

 

 

It shall be the duty of the governing body to provide proper protection to meet potential risks by obtaining adequate bond and insurance coverage in excess of the above minimum requirements when circumstances require such additional coverage.

5. (a) Notwithstanding the minimum coverage requirements set forth in subsection 4 above, the minimum coverage required under this regulation for a credit union shall be increased to be equal to the greater of either of the following amounts:

(1) The aggregate amount of the daily cash fund (plus maximum anticipated daily money receipts) on the credit union's premises, or

(2) The aggregate amount of the credit union's money placed in transit in any one shipment.

(b) Such increased limits must be obtained no more than 30 days after the discovery of the need for such increase.

(c) Notwithstanding subsection 5(a), no increase in coverage shall be required when a credit union temporarily increases its cash fund because of an unusual event that cannot reasonably be expected to recur. The Commissioner shall determine whether this subsection applies to a given situation.

6. The Commissioner may require additional coverage for any credit union when, in the Commissioner's opinion, the surety bonds in force are inadequate.  The credit union shall obtain such additional coverage within 30 days after the date of written notice.

Section II. Directors Acknowledgment of Report of Examination; Examination Expenses

The Department must receive a properly completed Directors Acknowledgment of Report of Examination, and payment of any invoice for examination expenses, no later than thirty (30) calendar days after the date of the transmittal letter to the credit union accompanying the report of examination or the invoice for examination expenses, as applicable.

Section III. Real Estate Loans

1. A credit union may grant loans or lines of credit secured by an instrument providing a direct lien(s) on real property owned, in whole or in part, by one or more members.

2. Each contract between the credit union and the borrower shall include a provision that the credit union may, at its option, declare immediately due and payable all or any part of the loan if all or any part of the real property securing the loan is sold or transferred by the borrower without the prior written consent of the credit union.

Section IV. Delinquent Loans

A loan shall be deemed delinquent if payment has not been made thereon for a period of two (2) or more months after the most recent contractual payment was due and not paid. In calculating whether a particular loan is delinquent, no consideration is to be given to partial payments, unless in the aggregate they total one or more contractual payment.

Section V. [Reserved]

Section VI - Community Development Credit Unions

1. For purposes of this section and 8 V.S.A. §30101(3):

(a) "Low income members" shall include (1) those members whose annual income falls at or below the lower level standard of living classification as established by the Bureau of Labor Statistics and as updated by the Employment and Training Administration of the U.S. Department of Labor, (2) those members who are residents of a public housing project who qualify for such residency because of low income, (3) those members who qualify as recipients in a community action program, and (4) those members who are enrolled as full-time or part-time students in a college, university, high school, or vocational school.

(b) "Predominantly" is so defined as a simple majority.

2. A credit union which is designated by the Commissioner as a community development credit union as defined in 8 V.S.A. §30101(3) may receive and hold deposits on account from non-members, provided the National Credit Union Administration concurs with the Commissioner's designation and confirms in writing to the Commissioner that such accounts will be insured to the same extent as member deposits.

3. The burden of demonstrating that a credit union is a community development credit union shall be on the credit union seeking such designation. After receiving such designation, the governing body shall regularly review its membership list, and report on an annual basis to the Commissioner, to ensure that it continues to qualify as a community development credit union.

4. The rate of interest paid on any non-member deposits shall not exceed the rate being paid on member share certificates with similar terms and conditions.

Section VII Fixed Assets

1.  Definitions.  As used in this section VII:

(a) “Abandoned premises” means real property previously used to transact credit union business but no longer used for that purpose and real property originally acquired for future expansion for which the credit union no longer contemplates such use.

(b) “Fixed assets” means premises, furniture, fixtures and equipment.

(c) “Premises” means any office, branch office, service center, parking lot, other facility, or other real property where the credit union transacts or intends to transact business.

(d) “Furniture, fixtures, and equipment” means all office furnishings, office machines, computer hardware and software, automated terminals, and heating and cooling equipment.

2.  (a) A credit union may invest in real property (including both improved or unimproved real property) or leasehold improvements, which the credit union is using or intends to use as its premises, provided the aggregate of all such investments shall not exceed six percent of the credit union’s share accounts and total retained earnings.

(b) Additionally, a credit union may invest in furniture, fixtures, and equipment provided the aggregate of all such investments does not exceed one and one-half percent of the credit union’s share accounts and retained earnings.

3.  A credit union shall not exceed the limitations set forth in this section without the express prior written consent of the Commissioner.

4.  Premises Not Currently Used To Transact Credit Union Business.

(a) When a credit union acquires premises for future expansion and does not fully occupy the space within one year, the credit union must have a board resolution in place by the end of that year with definitive plans for full occupation. Premises are fully occupied when the credit union, or a combination of the credit union, CUSOs, or vendors, use the entire space on a full-time basis. CUSOs and vendors must be using the space primarily to support the credit union or to serve the credit union’s members.  The credit union must make any plans for full occupation available to the Department and its examiner upon request.

(b) When a credit union acquires premises for future expansion, the credit union must partially occupy the premises within one year and must substantially occupy the premises within three years.  Premises are “partially occupied” when the credit union is using some part of the space on a fulltime basis. Premises are “substantially occupied” when the credit union (or combination of credit union, CUSOs, or vendors as described in subsection 4(a) above) occupies at least 60% of the space on a fulltime basis.  The Commissioner may waive this occupation requirement in writing upon written request.

(c) A credit union must make diligent efforts to dispose of abandoned premises and any other real property not intended for use in the conduct of credit union business. The credit union must seek fair market value for the property, and record its efforts to dispose of abandoned premises. After premises have been abandoned for four years, the credit union must publicly advertise the property for sale.  Unless otherwise approved in writing by the Department, the credit union must complete the sale within five years of abandonment.

MLO Reasonable Commuting Distance

Bulletin
Wednesday, November 27, 2013
Banking bulletin #42

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Bulletin%20%2342_MLO%20Reasonable%20Commuting%20Distance.pdf

Banking Bulletin No. 42

(November 27, 2013)

Mortgage Loan Originators

Reasonable Commuting Distance from Residence to Office of Employment

The Department of Financial Regulation (the "Department") accepts applications for Mortgage Loan Originator ("MLO") licenses through the Nationwide Mortgage Licensing System and Registry ("NMLS" or "NMLSR").

A MLO is defined as an individual who: (a) takes a residential mortgage loan application or (b) offers or negotiates the terms of a residential mortgage loan. 8 VSA §2200(17). A MLO must be "an employee actively employed at a licensed location of, and supervised and sponsored by, only one licensed lender or licensed mortgage broker operating in this state." 8 VSA §2201(b)(l)(emphasis added). Alternatively, a MLO may be an individual sole proprietor who is also licensed as a mortgage broker or lender. 8 VSA §2201(b)(2).

Vermont licensed lenders and licensed mortgage brokers are licensed on a location by location basis. 8 VSA §§ 2206, 2208. All MLOs must work from the physical location as it appears on the mortgage broker's or lender's license. Neither statute nor the Department permits a MLO to telecommute. Therefore, the MLO's physical work location must be within a reasonable commuting distance from the MLO's home address as shown on NMLS Form MU4.

In determining a "reasonable commuting distance", the Department considered the following factors: geographic accessibility of the physical work location; the quality of the roads; customarily available sources of transportation; and usual travel time. Having weighed these considerations, the MLO's physical work location must be not more than fifty (50) miles from the MLO's home address.

In cases where the distance is greater than fifty (50) miles, a request for exemption from the "reasonable commuting distance" standard may be submitted by the MLO and the employing firm. An exemption will be granted or denied at the Department's discretion after a careful review of the facts set out in the request for exemption.

Dated this 27th day of November 2013

Susan L. Donegan

Commissioner

Mobile Home Disclosure

Bulletin
Wednesday, November 27, 2013
Banking bulletin #41

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Bulletin%20%2341_Mobile%20Home%20Disclosure.pdf

Banking Bulletin No. 41

(November 27, 2013)

(This Bulletin Supersedes and Replaces Banking Bulletin No. 27)

Mobile Home Retail Installment Contract Disclosure

This Bulletin is issued pursuant to Title 9 V.S.A. § 2603(e), for the purposes of specifying the form and content of the disclosures required by Title 9 V.S.A. § 2603(e) (the "Disclosure"), to increase the flow of information to consumers and encourage them to take advantage of a competitive market. A retail seller shall provide to a potential buyer at the time an application is taken, a written disclosure in a form approved by the Commissioner of the Department of Financial Regulation.

A model disclosure is attached. A retail seller that uses the model disclosure will be deemed to have used a written disclosure in a form approved by the Commissioner. Any changes to this model disclosure must be approved by the Commissioner.

The attached disclosure must be provided to potential buyers beginning February 1, 2014. Any seller wishing to use a customized form must utilize the attached recommended disclosure form until a request for a modification is submitted to the Department and the Commissioner has approved the modified form in writing. The Disclosure shall be printed on a single sheet of colored paper that is easily distinguished from all other disclosures, applications or other documents presented to the buyer of the mobile home. Except as otherwise required herein, the print shall be in a size equal to at least 12 point type.

The Disclosure shall:

A. Contain the following notice in uppercase letters and in a size equal to at least 14 point bold type and otherwise distinguishable from all other text of the Disclosure:

YOU MAY BE ELIGIBLE FOR A LOAN WITH A LOWER INTEREST RATE, AND/OR LESS EXPENSIVE FINANCING COSTS, POINTS, OR FEES FROM ANOTHER LENDER

B. Include a statement informing the borrower(s) that they can obtain a list of lenders participating in Vermont Housing Finance Agency programs and other lenders by contacting the Vermont Department of Financial Regulation at 802-828-3307 or writing to the Department at 89 Main Street, Montpelier, VT 05602-3101. Information may also be accessed via the internet at www.dfr.vermont.gov.

C. Be signed and dated by the seller and the buyers involved in the purchase.


. .

Transition – Prior to February 1, 2014 a retail seller may use either the form attached to Banking

Bulletin No. 27 or the form attached to this Banking Bulletin. Dated this 27th day of November 2013

Susan L. Donegan

Commissioner

 

 

[DISCLOSURE MUST BE PRINTED ON COLORED PAPER]

Mobile Home Retail Installment Contract Disclosure

YOU MAY BE ELIGIBLE FOR A LOAN WITH A LOWER INTEREST RATE, AND/OR LESS EXPENSIVE FINANCING COSTS, POINTS, OR FEES FROM ANOTHER LENDER

A list of lenders licensed or chartered by the State of Vermont may be obtained by calling the Banking Division of the Vermont Department of Financial Regulation at 802-828-3307 or writing to the Department of Financial Regulation at 89 Main Street, Montpelier, VT 05620. Information may also be obtained via the internet at www.dfr.vermont.gov. In addition, a list of nationally and federally chartered lenders with offices in Vermont may be obtained from the Department.

You may also contact the Vermont Housing Finance Agency for a list of lenders participating in VHFA programs. Additional information about VHFA participating lenders can be obtained via the internet at www.vhfa.org/homeownership or by calling 802-864-5743.

You may also contact your local Neighborworks Homeownership Center, www.vthomeownership.org, or you may contact the Champlain Housing Trust (www. champlainhousingtrust.org/announcements/manufactured- home-replacement- program, 802-527-2361) about their Manufactured Home Replacement Program.

_____________________   _________

Buyers                                        Date

_____________________   _________

Buyers                                        Date

_____________________   _________

Seller                                        Date

Vermont Bulletin #41 (Rev. 11/27/2013)

Home Loan Escrow update

Bulletin
Monday, December 9, 2013
Banking bulletin #40

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Bulletin%20%2340_Home%20Loan%20Escrow.pdf

Banking Bulletin No. 40

(December 9, 2013)

(This Bulletin Supersedes and Replaces Banking Bulletin No. 17)

Home Loan Escrow Accounts

. .

This Bulletin is issued pursuant to 8 V.S.A. §10404, which governs home loan escrow accounts in Vermont. For purposes of this Bulletin and 8 V.S.A. §10404, an “escrow account” means an account into which a borrower is required under the terms of a residential real estate loan agreement to make periodic payments of property taxes, insurance premiums or other similar charges." 8 V.S.A. §10404 (a)(2).

Section 10404 (b) generally requires that lenders pay interest on the funds deposited into an escrow account.

Section 10404 (g) provides that, "the lender shall provide annually, or upon request of the borrower, financial statements relating to the borrower's escrow account in a manner and on a form approved by the commissioner." (emphasis added)

Lenders that use a form of Annual Escrow Account Disclosure Statement as set forth in the federal Real Estate Settlement Procedures Act ("RESPA") and its applicable regulations will be deemed to have issued an escrow account financial statement in a manner and form approved by the commissioner, provided the statement includes interest, if any, paid into the escrow account.

Lenders are reminded that current Vermont law only permits a one month cushion on escrow accounts, not the two month cushion under RESPA. 8 V.S.A. §10404 (c).

All lenders making loans secured by Vermont residential real estate must comply with the requirements of 8 V.S.A. §10404 and this Bulletin if the lender requires that the borrower maintain an escrow account. This applies to all lenders regardless of the source of the funds.

Lenders are directed to the Vermont Home Loan Escrow Account statute (currently found at 8

V.S.A. §10404) for additional information and restrictions regarding escrow accounts.

Dated this 9th day of December 2013

Susan L. Donegan

Commissioner

Withdraws All Unnecessary Banking Bulletins

Bulletin
Wednesday, November 27, 2013
Banking Bulletin #39

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Bulletin%20%2339_WD%20Unnecessary%20Bulletins.pdf

Banking Bulletin No. 39

(November 27, 2013)

Withdrawal of Unnecessary Banking Bulletins

The Department has reviewed the Banking Bulletins issued by the Commissioner and the Commissioner has determined that a number of existing bulletins are either no longer necessary or have been rendered irrelevant by the passage of time or changed circumstances.

The following Banking Bulletins are WITHDRAWN: Banking Bulletin #1 (Revised) – Payment Order Accounts

Banking Bulletin #3 – Practices by Institutions Regarding Maturing Certificates of Deposit

Banking Bulletin #4 – Negotiable Order of Withdrawal "NOW" Accounts

Banking Bulletin #5 – Loans and Investment Not Otherwise Qualifying or Permitted

Banking Bulletin #6 – Loans to Officers

Banking Bulletin #7 - Loans versus Commitments

Banking Bulletin #8 – State Chartered Credit Unions Rate of Interest

Banking Bulletin #9 – Service Charges on Dormant Accounts

Banking Bulletin #10 – Adjustable Rate Loans Secured by Subordinate Liens on Residential Real Estate of Two Units or Less Which are Owner-Occupied

Banking Bulletin #12 – Permitted Interest Rates on Loans (Credit Unions)

Banking Bulletin #13 – Internal Revenue Service Form 990 (Credit Unions)

Banking Bulletin #14 – Risk Assets (Credit Unions)

Banking Bulletin # 16 – Late Fees on Credit Cards Banking Bulletin #18 – Sale of Annuities

Banking Bulletin #20 – New Charges and Assessment Formula

Banking Bulletin #22 (Revised) – New Minimum Assessment and Loan Production Assessment

Banking Bulletin #24 – Funded Settlements

Banking Bulletin #33 – Motor Vehicle Retail Installment Contract DMV Warranty Fee Federal Car Allowance Rebate System (a/k/a Cash for Clunkers-Program)

Dated this 27th day of November 2013

Susan L. Donegan

Commissioner

Thomas J. Candon

Thomas J. Candon was appointed deputy commissioner of Banking in June 1993 and also served as deputy commissioner of the Securities Division from August 2008 to February 2014.

Mr. Candon has experience with a Vermont bank as a municipal services officer, investment and deposit services officer, mortgage banking manager, and operations division manager.  He held registered securities representative and registered securities principal licenses while at the bank.

Clarification of Declared Rate for 9 V.S.A. §104 (High Rate Loans) and Reg. B-98-2 (High Rate, High Point Notices for Residential Real Estate Loans)

Bulletin
Thursday, November 1, 2012
Banking Bulletin #38

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Banking_Bulletin_%2338.pdf

BANKING BULLETIN #38

November 1, 2012

 

Clarification of Declared Rate for

9 V.S.A. §104 (High Rate Loans) and

Reg. B-98-2 (High Rate, High Point Notices for Residential Real Estate Loans)

This Bulletin clarifies the Declared Rate for purposes of 9 V.S.A. §104 (High Rate Loans) and Regulation B-98-2 (High Rate, High Point Notices for Residential Real Estate Loans).

Both 9 V.S.A. §104 and Regulation B-98-2 refer to 32 V.S.A. §3108 for purposes of establishing the Declared Rate. Title 32 V.S.A. §3108 was amended by Act No. 143 of the 2012 Vermont legislative session. As amended, §3108 establishes an interest rate to be applied to the overpayment of taxes ("overpayment rate'') and then establishes a different interest rate to be applied to the underpayment of taxes ("underpayment rate"). An October 16, 2012 memorandum from the Commissioner of Taxes establishes the overpayment rate at 3.6% and establishes the underpayment rate at 5.6% for calendar year 2013. (A copy of the Commissioner of Taxes memorandum is attached to this Bulletin.)

The establishment of two rates under §3108 could create confusion about which rate applies for purposes of 9 V .S.A. §104 and Regulation B-98-2. To avoid such confusion, the Commissioner declares that the Declared Rate for purposes of 9 V.S.A. §104 and Regulation B-98-2 shall be the overpayment rate established by 32 V.S.A. §3108.

Consequently, for purposes of 9 V.S.A. §104 and Regulation B-98-2 the Declared Rate for calendar year 2013 shall be 3.6%.

Stephen W. Kimbell Commissioner

Vermont Department of Financial Regulation

 

 

MEMORANDUM

TO: Commissioner, Deputy Commissioner, General Counsel, Division Directors, Policy Analysts and Staff Attorneys

FROM: Susan Mesner, Senior Economist

DATE: October 16, 2012

SUBJECT: 2013 Interest Rates

Act 143 (2012) amended the law that governs the calculation of interest rates in Vermont for underpayment and overpayment of tax liabilities. The annual rate for overpayments is now rounded up to the nearest quarter percent, with the quarterly rate rounded to the nearest whole tenth of a percent. The annual rate for underpayments is set at 200 basis points above the rate for overpayments.

The average prime loan rate charged by banks (as determined by the Board of Governors of the Federal Reserve System) for the 12-month period beginning October 1, 2011 and ending September 30, 2012 was 3.25%. Rounded up to the nearest quarter percent, the annual rate for 2012 is 3.25%. When converted to a monthly rate, the result is 0.27% per month.

Under 32 V.S.A. § 3108(a), the monthly rate is rounded up to the nearest whole tenth of a percent, producing aninterest rate in 2013 of 0.3% per month for overpayments, and an annual rate of 3.6%. The 2013 annual interest rate for underpayments is 5.6%, or 0.5% per month.

These rates apply to interest that accrues in calendar year 2013.

Mary Peterson

Commissioner of Taxes

Dated 10/12/2012

Clarification of the application of 8 V.S.A. § 14103 to state-chartered credit unions

Bulletin
Friday, October 5, 2012
Banking Bulletin #37

File attachments: 

http://www.dfr.vermont.gov/sites/default/files/Banking_Bulletin_37_0.pdf

Banking Bulletin No. 37

October 5, 2012

This bulletin is to clarify the application of 8 V.S.A. § 14103 to state-chartered credit unions.

1. A state chartered credit union must not describe itself as a “banking cooperative,” banking co- op,” “bank,” “banking association,” “trust company,” or other similar sounding word or name in its advertising and marketing.

2. Any state chartered credit union using the phrases referred to in ¶ 1 above in its marketing and advertising material must discontinue that use starting November 15, 2012.

3. The Department will not take regulatory action against a state chartered credit union under 8

V.S.A. § 14103 as long as that credit union refrains from referring to itself as a “banking cooperative,” banking co-op, “bank,” “banking association”, “cooperative bank,” “trust company,” or other similar sounding word or name in any future advertisements or marketing materials. As more fully set forth below, a state chartered credit union is not prohibited from using the word “bank” or any derivative of the word “bank” to describe its services or to differentiate itself from a bank.

4. (i) For purposes of this paragraph (4), the term “services” means soliciting, receiving or

accepting money or its equivalent on deposit, extending loans and financing of any kind, escrow services, investment services, and money transfers of all kinds, including without limitation bill- paying and debit card services, Automated Clearing House transfers, and wire transfers.

(ii) For purposes of this paragraph (4), the term “advertisements” is limited to

advertisements ordinarily accessible by or directed to non-members and purchased and placed by or on behalf of a state chartered credit union in print, radio, internet/electronic and television media, hyperlink or search engine designated landing pages supporting electronic media, promotional

material in any media, and pages on a website maintained by or on behalf of a state chartered credit union. The term “advertisements” as used in this paragraph (4) does not include items used solely to promote the state chartered credit union’s brand without reference to services as defined in this paragraph (4). Such excluded items may include, by way of example only, gifts, premiums, and the display of a state chartered credit union’s logo and slogans.

(iii) When a state chartered credit union uses the terms “bank” or “banking” or derivative terms or phrases in advertisements (as limited in this paragraph (4)) in which a state chartered credit union refers to its services (as defined in this paragraph (4)) it will disclose that it is a credit union. The disclosure that a state chartered credit union is a credit union will be clear and conspicuous so that reasonable consumers can read, see or hear and understand the information.

(iv) Notwithstanding any other provision of this paragraph (4), when a state chartered credit

union uses the terms “bank” or “banking” or derivative terms or phrases in the text of hyperlinks or search engine designated links, it need not include the term “credit union” in the text of the link but a state chartered credit union will disclose on the landing page of those links that it is a credit union. The disclosure that a state chartered credit union is a credit union will be clear and conspicuous so that reasonable consumers can read, see or hear and understand the information.

Stephen W. Kimbell, Commissioner

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