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Reply To: Reporting AUS for 2018

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#12071

kowsley
Keymaster

This is a source of confusion in the regulation. The best way to get an understanding on when to report the AUS and the results is by reviewing the scenarios that are provided in the regulation starting in Paragraph 4(a)(35)-1.i through 4(a)(35)-1.iv. Here is a summary of those scenario’s:

If a bank uses an AUS to evaluate an application prior to underwriting, the bank complies by reporting the name of the AUS it used to evaluate the app and the result generated by that system.

If a bank uses an AUS to evaluate an application and intends to sell it but instead decides to hold it in portfolio, the bank complies by reporting the name of the AUS used and the result generated.

Basically, if you run it through an AUS prior to underwriting, you report the AUS.

Paragraph 4(a)(35)-3.i through 4(a)(35)-3.iv runs you through scenarios when utilizing multiple systems. Generally, you report the AUS for the securitizer or insurer who purchases the loan. However, in 3.iv it states if a bank obtains two or more AUS results at the same time (meaning you run the loan through multiple systems simultaneously) the bank complies by reporting the name of all of the AUSs used by the bank to evaluate the application and the results generated by each. You can report up to five on the LAR.