On the first periodic statement of a HELOC, if the closing fees that include an origination fee and life-of-loan flood fee (finance charges) are not individually itemized and identified (instead, disclosed in a lump amount labeled as an advance, as well as not disclosed within the Finance Charge with the accrued interest during the billing cycle, is this a possible reimbursable violation if the sum of the individual finance charges exceed $100? (I noticed under the Commentary to 226.7(f) that the total finance charge for the plan is not required.)

The Commentary to 226.7(f)(1) simply means you don't have to total the finance charges, but all finance charges still have to be disclosed and itemized.



Not sure where the finance charge exceeding $100 comes from. If you understated the finance charge on an open-end credit plan then you have a reimbursable situation.

Do you then think this is a reimbursable violation?

Yes. We just had this happen in our recent compliance exam by the FDIC.

Same here...had to reimburse within 60 days of discovery. Unlike closed-end loans, there is a zero tolerance for this. We had to go back to our last compliance exam and scrub all loans (ended up being a two year period).

We consulted with our local FDIC office to confirm what had been found in the audit. Our examiner indicated that they would absolutely, 100% be looking for this problem at our next exam (which by the way starts in a month).

Good thing we cleaned this up last year and I have been monitoring ever since. The unfortunate thing is that our vendor's system does not have the capability to disclose this properly on the first periodic statement - supposedly they are working on it, but I've been hearing that for a year now. So in the meantime, we have found a manual way around this (which our examiner has reviewed)...it sucks, but the alternative is worse - if the customer can't pay for the fees outright, then the bank has to either aborb the third party finance charges or not charge one at all.
Good luck!