APRs and HELOCs

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Question:

Currently our Rate and APR for the HELOC program are the same on the published rate sheet. This is a variable rate loan product, shouldn't the APR be different taking into consideration the floor and cap on the rate for this type of loan?

Answer:

For starters, a HELOC is a line of credit, not a "loan." Reg. Z's rules for APR determination and disclosure are totally different for openend credit than for closedend credit. Review Sections 226.14 and 226.16 for applicable standards.

First published on BankersOnline.com 3/24/03