Disclosure of HELOC Early Termination Fee

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Question:

We charge an early termination fee on our HELOCs. However, we do not disclose the fee on our early disclosure (only the final loan documents). Are we in compliance? I thought if the fee was not disclosed on the early disclosure we could not charge it.

Answer:

The early termination fee, unless it is a fee you can charge if you as the financial institution terminates the account early, is not required in the HELOC Plan Disclosure. See the Commentary to 226.5b(d)(4)(i).

First published on BankersOnline.com 2/25/08