Are you allowed to charge a prepayment penalty on a variable rate HELOC in Wisconsin? I noticed WBA form 457 has language hard coded on the back that states the Right to Prepay without penalty and I was just wondering if that is there due to a state statute.

Yes. Under 138.056(3m)states you would also need to offer a program without a prepay penalty. So why go through the hassle. The WCA generally prohibits a prepay penalty as well.

The only time it is worthwhile is on commercial loans.

Charlie Geimer, CRCM, AMLCA

Thank you!