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How Far In Advance to Send HELOC Statements

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Question: 
On home equity lines of credit, how far in advance of payments must the billing statements be sent? If a bank chooses to make a change in the number of days must the customer be notified, and if so, how far in advance?
Answer: 

The answer is found in Regulation Z's Section 1026.5(b)(2)(ii)(B)- (B) Open-end consumer credit plans. For accounts under an open-end consumer credit plan, a creditor must adopt reasonable procedures designed to ensure that: ( 1 ) If a grace period applies to the account: ( i ) Periodic statements are mailed or delivered at least 21 days prior to the date on which the grace period expires; and ( ii ) The creditor does not impose finance charges as a result of the loss of the grace period if a payment that satisfies the terms of the grace period is received by the creditor within 21 days after mailing or delivery of the periodic statement. ( 2 ) Regardless of whether a grace period applies to the account: ( i ) Periodic statements are mailed or delivered at least 14 days prior to the date on which the required minimum periodic payment must be received in order to avoid being treated as late for any purpose; and ( ii ) The creditor does not treat as late for any purpose a required minimum periodic payment received by the creditor within 14 days after mailing or delivery of the periodic statement. ( 3 ) For purposes of paragraph (b)(2)(ii)(B) of this section, "grace period" means a period within which any credit extended may be repaid without incurring a finance charge due to a periodic interest rate. Decreasing the time would IMHO be a significant change. Increasing the time would not.

First published on BankersOnline.com 8/6/12

First published on 08/06/2012

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