WASHINGTON—Following questions from members about whether credit unions need to disclose providing gift cards to homebuyers for mortgage milestones, NAFCU said it has been offered guidance by CFPB on how such actions are interpreted under the TILA/RESPA integrated disclosure rule (TRID).
"At one end of a spectrum, a member asked about a promotion where the credit union would provide furniture or hardware gift cards to first-time homebuyers who close their loan at the credit union. At the other, another member asked about quietly sending gift cards to a member after consummation of the mortgage loan, solely as a relationship management effort for the future," explained NAFCU Senior Regulatory Compliance Counsel Elizabeth LaBerge.
LaBerge said credit unions must determine if the gift card is part of the legal obligations of the parties to the loan transaction – which some promotional offers may be considered and therefore would require disclosures.
However, the Bureau indicated that the other scenario – where gift cards are given solely as a "thank you" after the consummation of a mortgage – would likely not be considered part of the transaction and disclosures would not be required.
LaBerge noted that while the Bureau's informal response "will not clarify every possible situation involving a gift card and a TRID-covered mortgage loan, understanding the contours of the analysis does help."
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