Understanding Intent to Proceed
Looking for some quick answers on this topic? Let's go through my own personal cheat sheet!
Here’s a short cheat sheet on intent to proceed information:
Q: Can a borrower give intent to proceed before receiving an LE?
A: No. Section 1026.19(e)(2)(i)(A) requires the borrower to receive the disclosures before indicating an intent to proceed “with the transaction described by those disclosures.” Only after those events occurred in that order can a fee be imposed (with one exception listed below).
Q: What fees can be imposed or received before a creditor receives an intent to proceed?
A: Section 1026.19(e)(2)(i)(B) allows for a bona fide fee to obtain a consumer’s credit report before the consumer received the LE.
Q: Is signing the LE considered to be intent to proceed?
A: No. The signature lines on an LE are optional, and are only for confirming receipt of the disclosure.
Q: What if we close the loan without ever receiving intent to proceed, isn’t intent to proceed implied?
A: No, it must be expressly given. Comment 2 to § 1026.19(e)(2)(i)(A) states “a consumer’s silence is not indicative of intent because it cannot be documented to satisfy the requirements of § 1026.25.”
Q: How may a consumer indicate intent to proceed?
A: Section 1026.19(e)(2)(i)(A) lets the consumer indicate an intent to proceed in any way the consumer chooses, unless the creditor requires a particular manner. The creditor must document the intent to proceed to satisfy the documentation requirements of § 1026.25.
Q: Do you always need intent to proceed, even if you aren’t charging up front fees?
A: Yes, Comment 5 to § 1026.19(e)(2)(i)(A) states “a fee is ‘imposed by’ a person if the person requires a consumer to provide a method for payment, even if the payment is not made at that time.”
Q: Do you need a new intent to proceed with every new LE?
A: No, only the initial LE.