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HELOC Access Check to Advance Funds

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If a customer uses a HELOC access check to advance funds, does a transaction description other than "Advance" need to appear on the periodic statement?

The requirement is found in Regulation Z section 1026.8(b):

"For each credit transaction not involving the sale of property or services, the creditor must disclose a brief identification of the transaction; the amount of the transaction; and at least one of the following dates: The date of the transaction, the date the transaction was debited to the consumer's account, or, if the consumer signed the credit document, the date appearing on the document. If an actual copy of the receipt or other credit document is provided and that copy shows the amount and at least one of the specified dates, the brief identification may be omitted."

You can use the date the transaction posted to the consumer's HELOC account, and the description can be as simple as "CASH ADVANCE CHECK" or "HELOC CHECK" with or without the check number.

Official Interpretations Comment 8(b)-4 also offers this regarding the sufficiency of identification for a nonsale transaction: :
" The creditor sufficiently identifies a nonsale transaction by describing the type of advance it represents, such as cash advance, loan, overdraft loan, or any readily understandable trade name for the credit program."

Note also that Comment 8(b)-1.iii. lets you treat a HELOC access check transaction as a nonsale transaction even if it's used for the purchase of goods or services:

"The use of a 'supplemental credit device' in the form of a check or draft or the use of the overdraft credit plan accessed by a debit card, even if such use is in connection with a purchase of goods or services."

First published on 06/07/2020

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