I am under the impression it is against the law in the state of PA to charge a prepayment penalty/early termination fee on a home equity loan or home equity line of credit and a mortgage below the "base figure" amount. Actually, I was told this by an employee of the PA Department of Banking.

However, I see early termination fees in advertisements for home equity lines of credit at other Banks. What are other peoples thoughts on this matter? Did I get bad info from the DOB employee?

I believe the position of the Department of Banking is based upon Act 6 - see citations in: http://www.dobs.pa.gov/Documents/Interpr...age%20loans.pdf

However, there may be some contrary authority under federal law which does permit these prepayment penalties.

I have read that, and frankly, can't understand what it is saying.

Did you ever determine what this is saying? I cannot figure it out either.