LOC Non-Usage Fees

We are considering adding a non-usage fee to our lines of credit. It has not been decided whether to apply a flat fee or a fee based on the percentage of the unused portion of the line. What are my regulatory issues?

Are these consumer or business purpose? If consumer, are they equity lines or unsecured?

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Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.

They are consumer equity lines. Thanks.

Only changes that unilaterally benefit the customer or are insiginficant or to which the customer agrees in writing can be made on HELOCs originated since ~11/89. See §226.5b(f).

Adding a fee would not fit the requirements.

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Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.