Sometimes we do a renewal on a current loan and add new money to it. We use the same loan number but just add money to the balance. Do we need to do a new determination to verify if the borrower is on active duty or does the determination made at the time of the original loan still apply?
Per 32 CFR 232: A creditor may conclusively determine whether credit is offered or extended to a covered borrower, and thus may be subject to 10 U.S.C. 987 and the requirements of this part, by assessing the status of a consumer in accordance with this paragraph (b).
Covered borrower means a consumer who, at the time the consumer becomes obligated on a consumer credit transaction or establishes an account for consumer credit, is a covered member (as defined in paragraph (g)(2) of this section) or a dependent (as defined in paragraph (g)(3) of this section) of a covered member.
You first need to determine if the transaction is a new transaction (e.g. refinancing rather than renewal of existing obligation). Look to Regulation Z, 1026.20 to determine if the transaction is a refinance (see 1026.20(a)(4) regarding new amounts financed). If the transaction is not a new transaction and is simply a renewal then I don’t believe this would be considered a new obligation or extension of credit and would not require a new covered borrower determination. However, if there is any question surrounding whether a transaction is actually a renewal or a refinance I recommend taking the conservative approach and do the covered borrower determination.