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Open-ended home equity loans
by Richard Insley
BIO AND CONTACT INFO

Question: In updating the 15 year historical example for open-ended home equity loans, is there a certain date by which these should be revised in the following year? Such as the date in 2001, that the table should have been updated to include the rates charged in 2000.

Answer: The Reg Z Commentary on Paragraph 5b(d)(12)(xi) states:
"1. Index movement. Index values and annual percentage rates must be shown for the entire 15 years of the historical example and must be based on the most recent 15 years. The example must be updated annually to reflect the most recent 15 years of index values as soon as reasonably possible after the new index value becomes available." (Emphasis added.) While this doesn't give you and your examiners an exact number of days, so you'll have to make your case that your timing was "reasonable." If your index is published in the WSJ and you use a software product to produce these disclosures, then you should be able to handle the update within a few days. Add printing and distribution time, a plug of a week or two (in case you're on vacation or away on business), and any other predictable delays, and you'll most likely come up with about a month. Reduce this deliberation to a policy statement outlining the reasons for the delay, and you should keep the examiners happy.

First published on BankersOnline.com 8/6/01
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