Question:
Our third-party fees increased a while back but were not updated in our HELOC Application Disclosure. We're seeking resources and help to better understand our regulatory obligations in this scenario:
- For third-party fee refunds, can the refund be applied directly to the HELOC account (if still open) or does Reg Z require that we give the borrower the option by issuing the funds to them instead?
- Does it make a difference if the fee was paid up front vs. financed?
- Would a letter of explanation to impacted borrowers be sufficient notification or would you include a copy of the corrected HELOC Application Disclosure with the letter?
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