Trying to determine if a letter of credit is directly covered by Regulation B. Typically in my experience a letter of credit is tied to either a loan or a hold on a deposit account. In most instances it is tied to a line of credit and if the letter of credit was ever presented for payment a bank would be obligated to pay and would in turn draw down from the line indebting the borrower for that amount. In this scenario are both the letter of credit and line of credit covered by Regulation B? It seems as if it should just be the line of credit that is covered, but I can't find a specific exclusion in Reg B for the letter of credit (unless you say the right to defer payment is actually tied to the line and not the letter).
1. General. Regulation B covers a wider range of credit transactions than Regulation Z (Truth in Lending). Under Regulation B, a transaction is credit if there is a right to defer payment of a debt—regardless of whether the credit is for personal or commercial purposes, the number of installments required for repayment, or whether the transaction is subject to a finance charge.