Change in terms and decreased credit limits

Answered by:

Question:

Since credit limit is not one of the terms that is required to be disclosed, if we decrease the credit limit on a consumer’s credit line, do we need to provide a change in terms notification?

Answer:

If the line of credit is not secured by a consumer’s dwelling, advance notification is not required by Regulation Z unless the consumer could incur an over-the-limit fee or penalty rate as a result of the consumer exceeding the new credit limit, in which case 45 day advance notice would be required.

-----------------------------

Learn more about Nancy Derr-Castiglione’s webinar Change in Terms – Regulatory Issues for Deposit and Loan Accounts