Skip to content
BOL Conferences
Thread Options
#68079 - 03/18/03 04:18 PM Reg Z
Princess of Power Offline
Gold Star
Princess of Power
Joined: Aug 2002
Posts: 406
Napa, CA
I know I've seen this here before, but can't seem to find it with a search & unfortunately, my FRB manuals & other goodies are still in transit to catch up to me in my new office. Home Equity Loan with a rate reduction (.25%) for an automatic payment feature is this considered an ARM?? (Customer signing this a.m. & any help appreciated).

Return to Top
Lending Compliance
#68080 - 03/18/03 04:35 PM Re: Reg Z
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
If the rate increased by .25% if the automatic payment is canceled, then yes it would be. You'd have to disclose the conditions and timing of the increase.

5. Examples of variable-rate transactions.

i. The following transactions, if they have a term greater than one year and are secured by the consumer's principal dwelling, constitute variable-rate transactions subject to the disclosure requirements of §226.19(b).

B. Preferred-rate loans where the terms of the legal obligation provide that the initial underlying rate is fixed but will increase upon the occurrence of some event, such as an employee leaving the employ of the creditor, and the note reflects the preferred rate. The disclosures under §§226.19(b)(1) and 226.19(b)(2)(v), (viii), (ix), and (xii) are not applicable to such loans.


_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#68081 - 03/18/03 07:14 PM Re: Reg Z
Princess of Power Offline
Gold Star
Princess of Power
Joined: Aug 2002
Posts: 406
Napa, CA
Thank You for the assist - My boxes just caught up to me, so I'm back in business. (they can take their time with the phone, the quiet is wonderful!!)

Return to Top
#68082 - 03/18/03 07:26 PM Re: Reg Z
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,351
Gee......I wish I had a new office...........
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#68083 - 03/18/03 07:32 PM Re: Reg Z
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
Wait, Dan. This is a Line of Credit. §226.19 only applies to Closed End Credit.
_________________________
Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

Return to Top
#68084 - 03/18/03 07:35 PM Re: Reg Z
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
Shirley, I am even more jealous. I wish I had an office (instead of a cubicle).

Oh well, I guess a cubicle is better than just a table in an open area. We have many people doing that during this refinance tidal wave.
_________________________
Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

Return to Top
#68085 - 03/18/03 07:52 PM Re: Reg Z
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,351
Quote:

Oh well, I guess a cubicle is better than just a table in an open area. We have many people doing that during this refinance tidal wave.




I guess that would depend on what open area the table was in. I used to have an office located in the MARKETING department. Yuck!! I'd rather have a table out in the middle of the lobby. Those are the noisiest people on the face of the earth....even through a closed door!!

Oh, BTW, the original question didn't necessarily pertain to open-end. She just said it was a home equity loan. Maybe it was closed-end???
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#68086 - 03/18/03 07:53 PM Re: Reg Z
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Quote:

Wait, Dan. This is a Line of Credit. §226.19 only applies to Closed End Credit.




Al, the post says a Home Equity Loan, not a Home Equity Line of Credit.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#68087 - 03/18/03 07:57 PM Re: Reg Z
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,351
Dan.....excuse my ignorance, but what is the definition of a "preferred-rate loan?"
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#68088 - 03/18/03 08:04 PM Re: Reg Z
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Shirley, I don't know the regulatory definition but I've considered them to be just that, loans with preferential rates. Such as the example in the reg where an employee gets a lower rate than the general public or you give someone a preferential rate for doing automatic payments, or for maintaining compensating balances, etc. A preferential rate loan is only consider a variable rate loan if the initial (preferential) rate will increase upon a certain condition and that condition must be disclosed.

Maybe someone else can give you a better description.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#68089 - 03/18/03 08:05 PM Re: Reg Z
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Dan - from my understanding you hit it right on the head.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#68090 - 03/18/03 09:05 PM Re: Reg Z
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
Dan, I apologize. I saw the "L" and read it as Line. Maybe if I could shut the door, I could read better. And, I'm surrounded with Marketing people.

I've always said that a poor excuse is better than no excuse at all.
_________________________
Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

Return to Top
#68091 - 03/18/03 09:09 PM Re: Reg Z
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Al, the best excuse in the world for confusion is being surrounded by marketing people.

You're forgiven.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#68092 - 03/18/03 11:52 PM Re: Reg Z
Princess of Power Offline
Gold Star
Princess of Power
Joined: Aug 2002
Posts: 406
Napa, CA
I deserve a new office. About 18 months ago I was booted out of my office (that I had waited 15 years for)into a windowless, poorly lit hallway leading to the bathroom and have been working out of boxs. I know it really bugged the CEO to have a VP working with examiners/auditors in what sounded like the "bowels" of the building. I now have 3 big windows, chairs, a real door and he even bought me a desk stereo system for being a good sport the last 18 months.

Return to Top
#68093 - 03/19/03 01:19 AM Re: Reg Z
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
I am so jealous......
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#68094 - 03/19/03 02:26 PM Re: Reg Z
swiggles Offline
Power Poster
swiggles
Joined: Aug 2001
Posts: 7,351
OK,OK!!! Here's the truth. I used to have a private office, small but with a huge window, floor to ceiling. The bank started a remodeling project and had to move me, so now I share a small office with my partner. It's a storeroom next the men's bathroom in the basement. At least it's well lit and has carpet on the floor. Oh yes, and they did remove the storage shelves too.
_________________________
The more you sweat in training, the less you bleed in battle.......

Return to Top
#68095 - 03/19/03 02:36 PM Re: Reg Z
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
MAN! Remind me NEVER to complain...I've always as long as I can remember, even before compliance had a nice private office! The things we can take for granted until we hear of others situations!
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#68096 - 03/19/03 11:30 PM Re: Reg Z
Princess Romeo Offline

Power Poster
Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
Wow - a disturbing trend - compliance officers being situated next to bathrooms. Are they trying to tell us something?

BTW - are all the lightbulbs lit? If not, I know of a warehouse in Nigeria.....
_________________________
CRCM,CAMS
Regulations are a poor substitute for ethics.
Just sayin'

Return to Top
#68097 - 03/20/03 08:53 PM Re: Reg Z
c.a.r Offline
Gold Star
c.a.r
Joined: Oct 2002
Posts: 377
Texas, USA
I have a 7 X 9 closet as we like to call it. the rest of the area belongs to the note dept for their files... NO WINDOW either
_________________________
There will be no crises next week. My schedule is already full...

Return to Top
#68098 - 07/10/03 10:54 PM Re: Reg Z
jpbanker Offline
New Poster
Joined: Jul 2003
Posts: 3
Does anyone out their have an EXAMPLE of a disclosure they sent out only for a Preferred Rate that triggers the ARM disclosure requirement?

Return to Top
#68099 - 08/21/03 12:54 AM Re: Reg Z
Anonymous
Unregistered

I would also be interested in an example, if anyone has one to share.

Return to Top

Moderator:  Andy_Z