We currently have one HELOC product and therefore have one HELOC application disclosure. To meet a competitors pricing, one of our Lenders would like to offer a lower rate, a pricing exception for this one applicant. Is this going to be problem since the application disclosure would not have been for that particular pricing?

LTC, I'm not going to opine about the disclosure, but about the pricing exception.

IMHO - Make sure that pricing exceptions are in policy. I usually get scared to death about ANY exceptions, because 99 out of 100 times they are to good customers, a/k/a middle age white guys, to the exclusion of minorities. If the customer asked, make sure that the bank has fully documented the other bank's pricing. Some banks will voluntarily offer all the competitor's rate, since mostly non-minorities are the ones asking, leaving lop-sided statistics for exceptions. If the LO brings up to match the other bank's rate, it should be done for all.

I believe the requirement for the HELOC disclosure is to discuss how the rate is determined (index plus a margin) and to "ask us about" the current rate. Does your current product's disclosure list an actual rate?

It does not, but the historical and maximum payment examples use our current rate.

I really didn't think there was a disclosure issue, but just wanted to be sure.

With regards to any Fair Lending - the risk/compliance department has frequently reminded the LOs, CLO and CCO of the risks of pricing deviations. We can only do so much.

With regards to any Fair Lending - the risk/compliance department has frequently reminded the LOs, CLO and CCO of the risks of pricing deviations. We can only do so much.

I had a wise _ _ _ LO who decided to tell me he made a loan just before the management meeting started:

LO - Hey Rocky, I made an exception to Joe and Cindy and made them a mortgage loan yesterday!
RP - That's nice Ken. How many others did you discriminate against by not giving them the same exception?
LO - Gee, I thought you would be happy.
RP - I will be if the examiners don't look at that loan during the fair lending exam.