This might be an obvious question. Can a consumer have a line of credit? If so, under what conditions? Thank you for any help.

I don't understand the question. A consumer line of credit is very common. What do you mean by under what conditions?

Does it have to be secured or can it be unsecured?

Unsecured consumer lines of credit are quite common, i.e. overdraft lines of credit, credit cards, charge cards, etc.

Ok-here is the example. A line of credit for a consumer-not a credit card, HELOC or overdraft, just a line of credit for the consumer to use upon their discretion. Is that okay?

Unless there is some state law preventing it, those type LOCs are common. They would be governed under Reg. Z's Subsection B, Open-end Credit.

We have some of them, they can be signature loans just based on the credit and relationship of the customer. Quite common in our area. You can also request collateral on it if you wish or if your bank has a policy of no unsecured loans.

But before you offer a line of credit to a consumer you will have to have an appropriate disclosure to provide.

Be sure to check your state law. Texas, for example, now permits HELOCs, but it's so restrictive that a consumer can't really draw simply what and when they want. For example, each draw must be at least $4,000.

Generally, if someone has told you your bank can not give a consumer an unsecured line of credit it is because your system has not been set-up to provide the required monthly statement disclosures required under Reg Z (APR, etc).

Ditto that. The Reg Z requirements for the periodic statement that is required for open end credit are indeed very complex (as are all of the open end rules). You need to thoroughly test and confirm that your system discloses everything correctly before putting such a product in place. Additionally, under certain circumstances (see 226.5a and 226.5b) early disclosures are required. There will be no magic button to push to get what you need on these types of products.