June 25, 2004
To The Institution Addressed:
Re: Part 410 of the Superintendent’s Regulations Application Definition
As a result of the new requirement set forth in Part 410 of the Superintendent’s Regulation mandating that mortgage brokers either obtain a surety bond or enter into a deposit agreement, the industry has inquired as to what constitutes an “application” for the purpose of calculating the amount of the bond or deposit. The new requirement becomes effective July 1,2004.
The Mortgage Banking Division has consistently used the definition of “application” that is set forth in Regulation B of the Federal Reserve System (12 CFR 202) (Equal Credit Opportunity). Under Section 202.2(f) of Regulation B, an “application” is defined as “an oral or written request for the extension of credit that is made in accordance with procedures used by a creditor for the type of credit requested.”
Therefore the required dollar amount of the bond or deposit agreement must be calculated utilizing this definition.
Should you have any questions on this please feel free to contact me at 212-709-5540.
Very truly yours,
Deputy Superintendent of Banks