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#1068877 - 10/22/08 09:23 PM HELOC Notice
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,258
Florida
There are two provisions in HELOCS - if the bank is going to terminate a plan 226.5(b)(f)(2) and if they are going to prohibit additional extensions until "something clears up" 226.5(b)(f)(3)(vi).

Is there a customer notice requirement for either? and where can it be found?

If there is a notice requirement, and the customer had declared bankruptcy, would the notice go to the attorney?

Any other tidbits would be appreciated.
Thanks
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Lending Compliance
#1068921 - 10/22/08 10:16 PM Re: HELOC Notice Rocky P
Reads Regs Offline
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Joined: Nov 2004
Posts: 2,285
See section 226.9(c)(3) of Reg. Z and the corresponding section of the official staff commentary. I'm not sure whether any notice would be required under Reg. B regarding action taken against an existing account under section 202.9.
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#1069037 - 10/23/08 11:11 AM Re: HELOC Notice Reads Regs
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,258
Florida
RR, thanks. I was looking under ECOA.
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#1069102 - 10/23/08 01:18 PM Re: HELOC Notice Rocky P
Many Hats Offline
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Joined: May 2008
Posts: 915
Orlando, FL
The following FDIC FIL should also be helpful:

http://www.fdic.gov/news/news/financial/2008/fil08058a.html

This is an excerpt pertainint to the notice requirements:

"If a lender reduces or suspends a consumer's HELOC limit as a result of a significant decline in property value or a material change in his or her financial circumstances, the lender must provide written notice to each affected consumer. The notice must be provided not later than three business days after the action is taken, and contain specific reasons for the action. In addition, the notice should explain if the creditor requires the borrower to request reinstatement of credit privileges. If the institution does not require the borrower to request reinstatement, the institution is responsible for monitoring the line to determine when the condition that permitted the reduction or suspension ceases to exist and reinstating the privileges as soon as reasonably possible."

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#1134177 - 02/23/09 05:45 PM Re: HELOC Notice Many Hats
Oviedo Boy Offline
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Joined: May 2006
Posts: 629
Tennessee
"If a lender reduces or suspends a consumer's HELOC limit as a result of a significant decline in property value or a material change in his or her financial circumstances, the lender must provide written notice to each affected consumer."

Does anyone have a sample notice they would be willing to share?
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#1134200 - 02/23/09 06:00 PM Re: HELOC Notice Oviedo Boy
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,568
Galveston, TX
It would be called an "Adverse Action Notice".
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