The bank is planning now for the 3rd quarter Home Equity Line Campaign. A suggestion was made to send existing HELOC customers convenience checks ( just like the credit card convenience checks) to increase usage. Some customers do not have checks but rather call in to request a draw. There is a paragraph in the HELOC agreement that indicates which method the borrower wants to use. The question is would it be permissible for the bank to place language on the back of the checks saying that by endorsing the check that the customer agrees to changing the terms of the HELOC to include check access? Don't believe that this is a "change of terms". Some of our customers also have access by Visa credit card so how would that be affected? We're thinking we could use something to the effect "that in using this check you agree to be bound by the terms and conditions of your home equity line agreement". Thank you.

You may want to review the Commentary to 226.5b:

Paragraph 5b(f)(3)(iv)

1. Beneficial changes. After a plan is opened, a creditor may make changes that unequivocally benefit the consumer. Under this provision, a creditor may offer more options to consumers, as long as existing options remain. For example, a creditor may offer the consumer the option of making lower monthly payments or could increase the credit limit. Similarly, a creditor wishing to extend the length of the plan on the same terms may do so. Creditors are permitted to temporarily reduce the rate or fees charged during the plan (though a change in terms notice may be required under §226.9(c) when the rate or fees are returned to their original level). Creditors also may offer an additional means of access to the line, even if fees are associated with using the device, provided the consumer retains the ability to use prior access devices on the original terms.

Thank you Dan for your direction. This was helpful.