Usage Of Life Time Rate Cap and Floor attributes in product(FFIEC031,041/RC-C/M2)
(Doc ID 2662471.1)
Last updated on APRIL 28, 2020
Applies to:Oracle Financial Services - Regulatory Reporting for US Federal Reserve - Lombard Risk Integration Pack - Version 8.0.8 and later
Information in this document applies to any platform.
line item M2
It requires usage of Rate Cap and Floor Values for which the configuration currently uses attributes N_RATE_CAP_LIFE & N_RATE_FLOOR_LIFE.
The current definition of these fields mention that these attributes store the 'lifetime maximum rate caps and floors'
There are certain data scenarios/types of loans as specified below:
- Where at least the Rate Cap of certain types of Loans changes during the lifetime of the loan which is not the 'maximum' cap or floor during the life of the loan.
-For such loans, the Cap that needs to be taken into account for M2 reporting is the 'currently' existing Cap for Line M2 (and not the maximum lifetime cap that the currently used attribute definition requires).
(The examples of such loans include loans under Servicemembers Civil Relief Act (SCRA). Under this act, various types of financial obligations (e.g.credit cards; automobile, ATV, boat and other vehicle loans; mortgages; home equity loans; and student loans etc) are eligible for max six percent SCRA interest rate cap benefit, for the beneficiaries/borrowers who are in active military service.)
-Thus we can not source such 'concessional cap' rates into the existing used N_RATE_CAP_LIFE attribute and needs a separate field to source such rates and use in the config.
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