Excluding credit cards, our bank wants to offer zero minimum payments on our open-end lines of credit. I'm concerned with doing so, because of the negative amortization that could occur and the potential criticism from our regulator. Can anyone think of any other concerns for the implementation of a zero minimum payment that I may be missing?

I think you pretty much nailed it. The regulators are not going to be happy with a loan product that once you make the loan the customer never needs to make a payment. How would you ever determine if the customer was past due?? How would you monitor credit quality? What maturities are you suggesting? etc........ Doesn't really sound like the best of ideas IMHO.

If I were your regulator, I'd classify it as a hazardous lending practice and either demand it be stopped or require you to pony up lots more capital to cover the inevitable losses.