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Checkup for your RDC Program;
Susan Orr

September 10
Critical Issues on Certificates of Deposit;
Deborah Crawford

September 16
S.A.F.E. Act - Auditing for Compliance;
Patricia Cashman

September 22
FinCEN's Beneficial Owners Proposal: What It Can Mean for You;
Sonja Kriegsmann and John Burnett

September 23
Bankruptcy 101;
Sam Ott

September 24
Using CPTED to Make Our Banks Safer;
Dana Turner and Carol Dodgen



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#1352288 - 03/04/10 11:27 AM HELOC Reduction/Suspension Notice
kristin09 Offline
Member

Registered: 01/15/09
Posts: 69
Does anyone have a HELOC reduction/suspension letter they are willing to share?
Also, under Reg B, are we required to provide an adverse action notice on this type of action? I am reading conflicting regulatory guidanc on this. OTS guidance is of the opinion that it would not constitute an adverse action under Reg B when the HELOC agreement permits this reduction based on property value significantly declining but FED guidance indicates otherwise?
Any help would be greatly appreciated.

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Lending Compliance
#1352298 - 03/04/10 11:36 AM Re: HELOC Reduction/Suspension Notice [Re: kristin09]
Dan Persfull Offline
10K Club

Registered: 08/28/02
Posts: 40628
Loc: Bloomington, IN
Unless you're regulated by the OTS I would recommend you go with the FED guidance. You are not suspending credit because of delinquency therefore IMO it is AA and requires an AAN.

Here's a letter I just did yesterday suspending the LOC for ability to repay.

RE: Home Equity Line of Credit Account Number

Dear Mr. and Mrs. :

This is to inform you that effective immediately all credit advance privileges for your Home Equity Line of Credit have been suspended.

This suspension is based on a routine evaluation of your outstanding credit with The Peoples State Bank and your ability to service your total debt. Based on our current account review and information obtained in your credit report we have a reasonable belief that you are unable to meet your debt repayment requirements.

For your reference this suspension is being imposed under the provisions of the Home Equity Line of Credit Consumer Open-End Agreement executed by you on September 2, 2004. More specifically Section 12 Subpart B of the agreement.

In order to reinstate your credit privileges under the original terms of the agreement you must send us a written request to that effect. Your credit privileges will only be reinstated if we determine that the condition which caused us to prohibit additional extensions of credit no longer exists and that none of the other provisions for suspension under Section 12 exists. If appraisal or credit report fees are incurred in making the determination, we may (if allowed by applicable law) charge you such fees.

Sincerely,




DISCLOSURE OF USE OF INFORMATION OBTAINED FORM AN OUTSIDE SOURCE

Our credit decision was based in whole or in part on information obtained in a report from the consumer reporting agency listed below. You have a right under the Fair Credit Reporting Act to know the information contained in your file at the consumer reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency.

CREDSTAR
6350 Laurel Canyon Blvd, 4th Floor
North Hollywood, CA 91606
Toll Free Number (8008) 767-8569
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1352303 - 03/04/10 11:40 AM Re: HELOC Reduction/Suspension Notice [Re: Dan Persfull]
kristin09 Offline
Member

Registered: 01/15/09
Posts: 69
Thanks Dan. We are not under OTS which is a good point. We are solely reducing credit limits on the more than 50% decline in property value provisions under Reg Z.
Thanks for providing a sample of your recent letter as well.

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