I have had a request from a lender to place a hold on available funds in a HELOC to cover potential overages on a construction project. Is there a notice that we would need to provide in this case? It isn't adverse action, and Reg. CC doesn't cover this.

Any guidance would be appreciated.

Thanks

The only guidance that will be worth anything is that from your legal counsel. Under what legal authority or covenant in the loan agreements do they plan to do this? You can't just arbitrarily restrict access to a HELOC. You might want to review 1026.40(f).

The only guidance that will be worth anything is that from your legal counsel.

And make sure that legal counsel is very familiar with the restrictions placed on freezing or terminating a HELOC in the section of Reg. Z Randy provided above.

Thank you Dan and Randy for you input.