I only have 15 HELOCs. Can I waive all late fees on them and make their due date what would have been the end of the grace period, not charge any fees, and they would not be reported late until 30 days after their due date for a total of 51 days. We have only collected $30 in late charges for the past year on these. I just don't see changing my cycle for $30. Ofcourse my vendor OSI said I don't have to change anything due to HELOCs not being included.

Dan -

Let me start with the statement that I'm not sure the way we do this today is compliant with even current rules, so . . . . Our overdraft lines accrue interest on an average daily balance methodology. There is no free ride period on the interest piece. We do not assess late charges. Payments are taken automatically from the tied checking account the day after the checking account to which the line is tied cuts its statement. We report to the credit bureaus as delinquent if the payment becomes at least 30 days late (meaning, still no payment after the next month's checking cycle date).

1 - is what we're doing today even in current Reg Z compliance?
2 - if not, I assume we now have to figure out how to do the 21 days on these lines?

Not sure how this got overlooked in every audit / exam before this, but nonetheless, here I am.... Help!?!

I'm not Dan, but,

1 - is what we're doing today even in current Reg Z compliance?

Yes. The current triggers are limited to: in order for the consumer to avoid an additional finance or other charge.

2 - if not, I assume we now have to figure out how to do the 21 days on these lines?

Yes. The new triggers include reporting to a credit bureau.

But then the FDIC issues REVISED FIL 44-2009 that states:

Provisions of the Credit CARD Act generally take effect on February 22, 2010, and the FRB will issue additional implementing regulations. However, the following provisions immediately affect open-end credit plans, including credit cards. On or after August 20, 2009:

Applicable to all open-end consumer credit accounts, including credit cards and home equity lines of credit accessed by a credit card, creditors must mail or deliver periodic statements at least 21 days before the payment is due.

So does this mean that if our HELOC product is NOT accessed by a credit card, these changes would have no impact? It can't be that simple....

Even the proposed rules for HELOCs refer to the 21 day rule. I think the way they worded it is misleading. From the proposed rule:

Section 106(b) of the 2009 Credit Card Act (cited above), amends
TILA Section 163 (15 U.S.C. 1666b) to require that the period between the mailing of the statement and the due date to avoid finance or other charges must be at least 21 days. On July 15, 2009, the Board published an interim final rule amending § 226.5(b)(2)(ii) to implement this provision of the Credit Card Act, which under the legislation becomes effective 90 days after enactment. Accordingly, no proposed amendments to § 226.5(b)(2)(ii) are in this proposal. When this proposal is adopted into a final rule, § 226.5(b)(2)(ii) will reflect the amendments made to implement the Credit Card Act.

KMK, in the beginning of the same sentence you highlighted, it also says

Applicable to all open-end consumer credit accounts

I think it applies to all HELOCs.

Fortunately our HELOCs already have a 25-day billing lead. The only change we need to make is to increase the billing days on our overdraft LOCs from 20 to 25 days. I don't know if it's necessary to notify our customers, but we plan on putting a message in their upcoming billing statement.

Can anyone offer suggested verbiage to include on their bill?

Looks to me like "all" just means all types of open end credit plans....

I really don't want to come across as snarky, honestly I don't....

Some of the new questions being posted have already been addressed. At length. Please, please, take some time to read up on the thread before posting a question. I understand, we are all in panic mode, and it is easier to post a question and hope for a customized answer. However, the people posting to these threads are not here to do our jobs for us. It is our own individual responsibilities to research for the answers, which are often literally just a few posts back. Your knowledge will increase exponentially if you take a few minutes to back up in the threads and read prior discussions. Really it will! Truly, I don't want to squelch the great use of these forums, just encourage the wise use of them.

<<<<< Stepping gingerly off the soapbox

I agree RebekahL CRCM.....very good points.....

I spoke today with the Direct of Consumer Regulations at the OTS (our regulator), who was the contact person on the OTS CEO Memorandum dated June 25. She confirmed that the 21-day periodic statement requirement applies to all open-end credit accounts - including HELOCs (regardless of access method) and overdraft lines of credit.

She also mentioned that they wrote their Memorandum "really fast" and they omitted the fact that the requirement also applied to HELOCs and ODLC's (the memorandum only said "credit card statements").

She also said she's received several questions about applicability. If you have any doubt, make a phone call. I'm glad I did. Perhaps if they get many calls it will help them realize a clarification is in order to help us comply. She said she's received several questions about it since the FDIC letter came out.

I would also point everyone to the actual interim final rule because you can do a statement stuffer or statement message for a "short period of time" that tells them their payment will not be treated as late if we receive it within 21 days after the statement was mailed or delivered. This buys some time until we get our programming in place to change our payment due date. On my version of the rule, it was on page 21.

I'm doing a letter to notify our HELOC customers before their Sept. statements come, and a letter to all ODLC customers of the change. I'll also do a short statement stuffer for both until I can get the changes programmed.

We are about to launch a credit card program for business operating line customers. FYI-I read this whole thread but I do not see my question. Will these new rules apply to business credit cards also? I thought they would only apply to consumer cards but is that incorrect?

Yes, that is correct. The rules apply to consumer products covered by Regulation Z.

Can a bank auto debit a minimum payment from a customer's account on the day the statement cycle cuts if they do not charge a late fee, impose a penalty APR or other penalty fee, or report to the credit bureau, or do they still have to comply with the 21 day time to pay rule?

Ok here goes I believe I have it correct. On the ODP-type product you describe if you:
Don't charge a late fee OR Impose a penalty APR (or some other penalty-type fee, etc.)
OR report to any credit bureau you DO NOT have to comply with the 21-day statement requirement.

The Reg Z exemption in the State of Oklahoma is not $25,000 but $45,000. I thought I'd add that for Okies not aware or might not remember that Oklahoma is different.

Laketime - this is what I thought until I attended a PBS phone seminar yesterday. In that call the speaker specifically said (and this was even after a few callers questioned it) that the 21-day statement rule applies to ALL open-end products regardless of whether or not you charge a late fee or report them to the credit bureaus...it's just that you can't charge a late fee or report them late if you don't provide the statement 21 days out. I'm looking at page 36080 in the FR (1st column) it seems to say what you and I were both thinking, BUT, it you look at the actual changes being made to 226.5 (page 36094 1st column 2/3 down) it seems to say what the speaker was referring to..."Creditors must adopt reasonable procedures designed to ensure that periodic statements are mailed or delivered at least 21 days prior to the payment due date and the date on which any grace period expires." PERIOD! it goes on to say that a creditor that fails to provide the statement 21 days out can't charge a last fee, report late, etc.

So now I'm really confused. We don't charge a late fee or report lates on our ODLC's so I was thinking this product was exempt.

I'm thinking a call to my regulator might be in order.Anyone else reading it this way? All of the other posts have suggested you don't have to follow the 21-day rules if you don't report lates or charge a late fee.

I know every "expert" has their own way on interpreting stuff so going to the rule is always best, but if I just rely on what the reg says in the FR, I'm still confused..

travelgirl,

I'm glad you are bringing this to everyone's attention. It appears that we all need to comply with the 21-day rule for open-end credit, but the reguation is giving us an out if we are unable to comply due to certain circumstances. It would have been nice if they had elaborated on this so that we would have a clear understanding.

I understand that all open end home equity plans including HELOC are included not home secured. Does anyone know for sure?

I think the only "out" we have (other than trying to figure out if OD lines apply if we don't have late fees or report to credit bureaus) is a "reasonable time" to comply, BUT the extension past 8/20 only applies if you tell the customer you will not take negative action (charge a late fee, report them late or raise their APR) if their payment isn't made within 21 days.

Otherwise HELOC's, PLOC's, OD lines and credit cards apply. What I'm still struggling with is whether or not the 21 day requirement applies if we don't charge a late fee, raise the APR or report late payments. Do we have to provide the statement 21 days (or 24 for mailing) in advance in these cases?

"Otherwise HELOC's, PLOC's, OD lines and credit cards apply. What I'm still struggling with is whether or not the 21 day requirement applies if we don't charge a late fee, raise the APR or report late payments. Do we have to provide the statement 21 days (or 24 for mailing) in advance in these cases?"

1) The 21 day requirement has absolutely nothing to do with your ability to raise the APR.

2) If you have no late fees, do not offer a grace period before applying additional finance charges or report the late loans to a CB, there is no requirement to meet the 21 day advance timeframe.

Is there any Fiserv banks that have HELOCS and also overdraft line of credit? I'd like to compare what Fiserv has told you. THey keep giving us a go around and not a specific answer. Please pm me.

That's what I've thought all along until the other day during a phone seminar - the callers were told that the 21 day rules applies to all open end credit - period....When I asked what would happen if we don't charge a late fee, don't report to the CB and don't give the 21 day statement, the response was you would most likely have a technical violation for not giving 21 days. In addition, if you don't do 21 days and you charge a late fee and report lates, then you are in bigger trouble.

In reading the Federal Register on page 36094 (under 226.5(b)(2)(ii)) I can see where this logic might be coming from. Kind of makes it sound like you still have to abide by the 21 days regardless and in addition can't charge a late fee or report lates.

Boy, this is so much fun...NOT!

Randy, same facts as in post #1231907 except we accrue interest immediately upon the customer's draw from a HELOC. Does your answer still apply? Are we still obligated to send the statements 21 days in advance of the due date?

This is also what I was told by an ABA staff member today - that it didn't matter whether our HELOCs were treated late in any way - the 21 day rule applied, period.

I am SO confused by all of this. We have not made changes to our HELOCs because we do not charge late fees,etc.

HELP!