We are going to decrease a line of credit attached to a checking account from $10,000 limit to $5,000. Do we need to send out a notice to the customer. The guidance that I am finding says we don't have to when the change regards a credit limit. But usually when I think one way, it actually turns out to be the other way so I want to make sure.

It appears you are taking adverse action. Reg. B would require an AAN.

Yes, probably an adverse action. But what about respects to Reg Z and the notice. My understanding is that we do not need to send out a 45 day notice to the customer unless the lowering of the credit limit would result in a penalty rate or fee. In that case a 45 day notice would have to be mailed before any fee or rate could be imposed. Is this a good understanding of what the Reg is saying?