Olson Burns Lee, P.C. Law Practice

Sept-Oct2006

Page 1

Welcome to the on-line
Sept-Oct2006 issue of the
Community Bankers' Advisor
. . . . . . . . . . .

The Advisor is prepared by attorneys at Olson & Burns P.C. to provide information pertaining to legal developments affecting the field of banking. In order to accomplish this objective, we welcome any comments our readers have regarding the content and format of this publication. Please address your comments to:

Community Bankers' Advisor
c/o Olson & Burns P.C.
PO Box 1180
Minot, ND 58702-1180

olsonpc@minotlaw.com

Also, visit our web site at:
www.minotlaw.com

The attorneys at Olson & Burns represent a wide range of clients in the financial and commercial areas. Our attorneys represent more than 30 banks throughout North Dakota.

September/October, 2006

YOU ARE ASKING. . .

Q: Our bank is handling a purchase loan where one brother signed the note (a closed end mortgage), but both brothers are on the mortgage and the deed. Who has to sign the Truth in Lending disclosure receipts?

A: The Truth in Lending Act and Regulation Z require that you provide the disclosures to the “consumer” in the transaction. The “consumer” is defined as a natural person to whom consumer credit is offered or extended.” In your question, the brother signing the note is the person to whom credit is being extended and would be the consumer. The brother signing only the mortgage would not be a consumer because no credit is being offered or extended to him. Only the “consumer” brother would be entitled to the TILA disclosures and would sign acknowledging receipt of them.

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