We offer a HELOC product that allows the borrower to convert all or part of the balance to a fixed rate term loan. This option is disclosed in the HELOC disclosure per Reg Z 226.5b. My question is, when the customer elects to convert, are closed-end disclosures required and would the new loan be subject to HMDA.

I believe based on the commentary to 226.5b, comment 5, the new closed end loan would not be subject to new disclosures.

Thanks in advance for any help you can provide.

BUMP

Regulation Z Official Staff Commentary, Comment 17(b)-2 states in part:
Converting open-end to closed-end credit. Except for home equity plans subject to §226.5b in which the agreement provides for a repayment phase, if an open-end credit account is converted to a closed-end transaction under a written agreement with the consumer, the creditor must provide a set of closed-end credit disclosures before consummation of the closed-end transaction.

No - these are just a function of the open end credit line and have to be reflected accordingly on the periodic statements.