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#1515142 - 02/26/11 01:21 AM HELOCs tied to a DDA as an ODP
Tryin-2-Comply Offline
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Joined: Apr 2003
Posts: 202
Hills of TN
We have very few DDA accounts where we have allowed them to tie their HELOC to it as an ODP - so the customer would have access to their HELOC funds in the event their DDA became overdrawn.

I am "thinking" that this was done without any compliance consideration many years ago. So, I am trying to backtrack to figure out what we need to do with these few accounts. I don't think credit card rules apply since this is not direct access with a card. Are there other things we need to ensure we are covered on? DDA disclosures, HELOC disclosures, etc. Does anyone allow this?

Many thanks.

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#1515177 - 02/27/11 01:16 PM Re: HELOCs tied to a DDA as an ODP Tryin-2-Comply
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,617
Galveston, TX
That is a common feature of many HELOCs programs that I have been associated with (although not in Texas, as it would be illegal). As long as that form of access to the HELOC was disclosed in the HELOC agreement and the transfers show appropriately on both the DDA and HELOC statements, I'm not really sure what other problems there might be? Do you have any specific concerns?
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#1515248 - 02/28/11 03:05 PM Re: HELOCs tied to a DDA as an ODP rlcarey
Tryin-2-Comply Offline
100 Club
Joined: Apr 2003
Posts: 202
Hills of TN
Thank you for your response. HELOCs have always been a concern as we seem to always have vendor issues. - we acquired these types of accounts and are trying to ensure we don't have any compliance issues - we do not offer this with our product, but management would like to do so if we can determine that all statement issues are resolved.

Questions:
1. When you state that "tranfers show appropriately on both the DDA and HELOC statements" - for HELOCsare you referring to section 226.8? And for DDAs are referring to 230.6? I just want to make sure there is something buried somewhere i'm not aware of.

Thank you for your help.

Nikki

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