Banking

A: If you submit a complaint about a Kansas state-chartered bank, this office will only act as an intermediary to facilitate communication between the consumer you and the financial institution and/or the exchange of relevant documents. Once a complaint is filed using the Consumer Assistance form is received, the OSBC will contact the bank. Our office will review the information and documentation provided by both parties and follow up with our determination.

 

The Office of the State Bank Commissioner is responsible for administering the Kansas Banking Code, K.S.A. 9-501 et seq. Our office examines Kansas state-chartered banks for safety and soundness concerns. The Office of the State Bank Commissioner has no authority to legally represent a consumer. We cannot offer legal advice, adjudicate contractual disputes, or determine monetary liability between the financial institution and its customers.

A: Unfortunately some information generated from examining and supervising the bank is confidential and we are not permitted by statute to disclose the information. If you are interested in knowing if our office has taken any formal enforcement action against a state-chartered bank, we can disclose that information.

 

A: The best thing for you to do is to contact the financial institution that issued the CD.

 

A: Contact the company or the company’s successor. The company’s transfer agent is responsible for keeping track of the ownership of stocks and bonds.

A: Yes, the bank has information they have to report to the Internal Revenue Service and the Department of Treasury’s Financial Crimes Enforcement Network on large and/or suspicious transactions. A large transaction is defined as a single transaction or a series of transactions totaling more than $10,000.

 

A: Yes, banks can place “holds” on checks for a variety of reasons. Banks may hold a check because the collection of the money may be in doubt or the check looks suspicious. Holds may also be placed when a large dollar amount is deposited or when funds are deposited into a new customer’s account. You may wish to review the account agreement you received when you opened your account for details about your bank’s funds availability policies and procedures. A bank must give you a copy of its deposit availability disclosure upon request.

 

A: There is no law that requires a bank to cash a check, even government checks. Some banks only cash checks if you have an account at that bank. Other banks will cash checks for non-customers but may charge a fee to do so.

 

A: Yes. A bank is required by law to verify and form a “reasonable belief” that it knows your true identity. You may also be asked to provide a copy of a government issued identification, such as a driver’s license or passport, and other verification, which may include verifying your place of employment or other references with other financial institutions.

 

A: The main difference is whether the authority to do business as a bank was granted by the state government or the federal government. Whenever a new bank is organized, the owners apply for either a state or national (federal) bank charter. Both types of banks offer FDIC insured deposits and both are regulated in much the same manner. The important difference for bank customers and other consumers is where they should go for regulatory assistance. To see if your bank is a state chartered bank, please visit our OSBC Online Institution Lookup.

Consumer & Mortgage Lending

A: If you are a Kansas Consumer, review the File a Complaint page including which entities we regulate.  If we regulate the company, complete the Consumer Assistance Form and we will investigate. Please remember to include copies of all available supporting documents.

A: APR is the Annual Percentage Rate. It represents the true cost of borrowing, expressed as a percentage, and will take into consideration the total finance charges paid over the life of the loan, not just the interest rate.

A: The formula to figure APR is:
Finance Charge X 365 / Amount Financed / Number of Loan Days X 100 = APR

A: There are several reasons your mortgage payment may increase. Some common reasons are:

  • An increase in property taxes or homeowner’s insurance can increase the amount you need to pay into your escrow account.
  • Do the terms of your loan stipulate or allow for an increase? For example, if you have an Adjustable Rate Mortgage (ARM) the interest rate may adjust to a higher rate, causing an increased payment amount.
  • Were you charged fees that increased the amount due?


You may find an explanation on the monthly statement, escrow analysis, or other information sent from your mortgage company. Or you can contact them with your questions.

A: After you have paid on a loan to the equivalent of the 20% down payment, you can contact the lender and request PMI be cancelled. The lender will likely have requirements you must fulfil to complete the request. If you are current on payments, the lender must terminate PMI when the loan balance reaches 78% of the original value of the home.

A: Most Credit Cards are issued by National Banks who are regulated by the Office of the Comptroller of Currency. You can find answers to common questions and contact information here.

Payday and Other Small Loans

A: A Payday Loan is a consumer loan transaction with the following qualities:

  • The loan amount is equal to or less than $500
  • The payment term is between 7 and 30 days
  • The lender anticipates a single repayment.

A licensed Supervised Lender can charge no more than 15% of the amount of the loan. Remember that depending upon the term and amount of the loan, 15% of the amount financed can calculate to an APR of much higher. For example, the APR for a $100 payday loan, with a finance charge of 15%, and a term of 14 days, is 391.07%.

 

$15.00 X 365 / $100.00 / 14 X 100 = 391%
Finance Charge X 365 / Amount Financed / Number of loan days X 100 = APR

 

A: A licensed payday lender can charge one NSF (non-sufficient funds) fee and 3% per month of the outstanding loan amount. For example – after the maturity date of a $300 payday loan, the lender can charge an additional $9 per month.

 

A: A Title Loan is a consumer loan in which the borrower allows the lender to place a lien on their vehicle title in exchange for a loan amount. When the loan is repaid, the lien is removed. However, if the borrower defaults, the lender may repossess the vehicle and sell it to repay the outstanding debt. In Kansas, a Title Loan is written as an Open End Line of Credit.

 

A: A licensed Supervised Lender may charge a finance charge at any rate agreed to by the parties for an Open End Line of Credit.

A: The Office of the State Bank Commissioner does not have jurisdiction over entities that are wholly owned by a Native American tribe. However, not all companies that claim to be tribal entities are wholly owned by the tribe. Please complete and submit the Consumer Assistance Form and we will investigate. Remember to include copies of all available supporting documents.

Credit Service Organizations

A: A Credit Service Organization is willing to engage in one, or all, of the following debt management services:

  • Receive funds from a consumer for the purpose of distributing the funds among creditors
  • Improve a customer’s credit record, history, or rating
  • Negotiate to defer or reduce a consumer’s obligations

A: A licensed CSO may only charge the following:

  • A one-time $75 consultation fee
  • The lesser of, a $40 total monthly maintenance fee or $5 per month for each creditor listed in the debt management services agreement.

Financial Terminology and Definitions

Annual Percentage Rate (APR)
The true cost of borrowing expressed as a percentage. APR includes fees and additional costs associated with the transaction so it provides consumers with a number they can easily compare when shopping around for a loan product. APR does not take compounding into account.


Interest Rate
The amount a lender charges for taking out a loan or the amount earned on an account or investment, expressed as a percentage of the principal.


Adjustable Rate Mortgage (ARM)
A type of mortgage loan where the interest rate can change, usually in relation to an index interest rate.


Fixed-rate Mortgage
A home loan that has a fixed interest rate for the life of the loan. Fixed-rate mortgage loans are sometimes called fully amortized. An amortization schedule can be calculated when the loan is issued showing how much of each payment will be applied to principal and interest throughout the life of the loan.


Amortization
The process of paying off a debt over time with regular payments where a portion is applied to principal and a portion to interest.


Amortization Schedule
A table that lists all payments for the life of a loan and shows the allocation of each payment to principal and interest. At the beginning of a loan, more of each payment is applied toward interest, but later the majority of each payment covers the principal amount of the loan. An amortization schedule also shows a borrower’s total principal and interest payment amounts for the entire term of a loan.


Simple Interest Mortgage / Loan
Simple interest is calculated by multiplying the daily interest rate by the number of days between payments. This method is typically used on shorter term loans, but some mortgages use this method. If you pay early, or at least on time, this type of loan can be beneficial, but if you pay late by even one day, you will pay additional interest.


Balloon Loan
A balloon loan does not fully amortize by the end of its term. A larger (balloon) payment is required at the end to pay the remainder of the principal balance.


Interest-only Loan
Payments are only applied to the interest of the loan. The payments are usually lower to begin but eventually, you are required to pay the entire balance as a lump sum or begin making larger monthly payments that include principal and interest.


Home Equity Installment Loan
A loan using the equity in your home as collateral. Home equity installment loans tend to have a fixed-rate and the loan amount is based upon the difference between the current market value and the homeowner’s mortgage balance due.


Home Equity Line of Credit (HELOC)
A revolving line of credit using the equity in your home as collateral. A HELOC begins with a draw period when you can draw, payback, and draw again as needed, followed by a repayment period when draws are not allowed. HELOCs generally have a variable interest rate.


Reverse Mortgage
A type of home loan for homeowners age 62 or over, that converts equity into funds they can receive as a lump sum, monthly payments, or line of credit. A reverse mortgage does not require the homeowner to make payments, but the entire loan balance becomes due and payable when the borrower dies, moves, or sells. HUD approved counseling is required before signing a loan application for a reverse mortgage.


Escrow Account (Home Mortgage)
Money collected monthly and held to make the periodic payments for property taxes, homeowners’ insurance, and if necessary private mortgage insurance.


Private Mortgage Insurance (PMI)
Insurance required by a lender if the borrower does not have a 20% down payment. If the borrower is current on payments, the lender must terminate PMI when the loan balance reaches 78% of the original value of the home. Or, once a borrower has paid the equivalent of the 20% down payment, they can contact the lender and request the PMI be removed.


Home Equity
The market value of a homeowner’s unencumbered interest in their property. Equity increases as the debtor makes payments against the loan decreasing the principal, or as property value appreciates.


Mortgage Forbearance
An agreement with your mortgage lender or servicer where they allow you to temporarily make lower payments or pause your payments. You will have to pay the difference in payments or the paused payments back later.


Mortgage Loan Modification
A change to the terms of an existing mortgage usually to avoid foreclosure. It may include an extension of the length of repayment, a reduction in payment, a reduction in interest rate, a different type of loan, or a combination of those.


Mortgage Refinance
Replacing your current mortgage with a new mortgage. The new mortgage will pay off the original mortgage and the borrower is bound to the terms of the new mortgage.


Force-placed Insurance
Insurance provided by the lender if the borrower fails to provide or allows insurance for loan collateral to lapse.


Right to Cure
A notice from a lender to consumer of the amount due and time allowed to bring an account current.


Guaranteed Auto Protection (GAP) waiver agreement
An agreement that cancels or waives all or part of the outstanding balance due on a consumer’s finance agreement in the event physical damage insurance does not pay the consumer’s debt in full following a total loss or unrecovered theft of the vehicle.


Principal
The original amount of a loan.


Supervised Loan
A consumer loan, including a loan made pursuant to open end credit, with respect to which the annual percentage rate exceeds 12%.


Automated Clearing House (ACH)
An electronic way to move funds to or from your account. You must authorize the transfer and provide your bank account and routing numbers.


Certificate of Deposit (CD)
A type of bank account that typically provides a higher interest rate in exchange for a customer agreeing to leave their funds in the account for a fixed term. Most depository institutions offer CDs, but terms, rates, and penalties vary.

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