We currently allow customers to set up a Sweep Transfer Agreement between their home equity lines of credit and a deposit account. Currently we do not charge any fee for this as we do for sweeps between two deposit accounts. Could we, compliantly, charge a fee for sweeps from a HELOC to a deposit account? The account charged for the fee would be the deposit account. Thanks!

Yes, it's a common practice @ $5 - $10 a pop. Compared to an NSF fee, that's a bargain.

There may be a debate over where the fee should be disclosed, but I would say it's "in connection with" the deposit account and should be includied in the TISA disclosure.

Other opinions?

Thanks, Ken. That was my concern, if the fee needs to be disclosed.

Does anyone charge a fee for these sweeps? How do you disclose it and how much is your fee.

If you charge a fee for an advance against the HELOC it is going to be a finance charge regardless of the account that you assess the charge too unless it is less than what would be charge for an overdraft that would have occurred by the transaction (OSC 226.4(b)(2). IMHO - you could also not impose this fee on existing HELOC accounts (again - regardless of where you are taking the charge from) unless agreed to in writing or contracted from in the beginning of the HELOC.

So, would you disclose this on the deposit end, or the loan end? Our fee for the sweep would be much less than what we charge for our NSF fee. I almost think that it should be disclosed on the loan documents.