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EFT Disclosures. You have indicated that the Credit Line can be accessed by a telephone call from the Borrower requesting an advance from the Credit Line. Some telephone transfers may be governed by the Electronic Fund Transfer Act. Therefore, you should provide to Borrower all proper EFT disclosures, in addition to the credit agreement and disclosure produced by LASERPRO.
My question is: What are examples of “some telephone transfers” that would require Reg E disclosures for a HELOC draw?
I can’t understand how it would apply.
Reg E defines account as (b)(1) “Account” means a demand deposit (checking), savings, or other consumer asset account (other than an occasional or incidental credit balance in a credit plan) held directly or indirectly by a financial institution and established primarily for personal, family, or household purposes.
Perhaps it is due to the commentary below but I still don’t see how that would be triggered by telephone advances from the LOC since credit accounts aren’t covered by Reg E.
Comment 1005.7(a) states:
7(a) Timing of Disclosures
1. Early disclosures. Disclosures given by a financial institution earlier than the regulation requires (for example, when the consumer opens a checking account) need not be repeated when the consumer later enters into an agreement with a third party to initiate preauthorized transfers to or from the consumer’s account, unless the terms and conditions differ from those that the institution previously disclosed. This interpretation also applies to any notice provided about one-time EFTs from a consumer’s account initiated using information from the consumer’s check. On the other hand, if an agreement for EFT services to be provided by an account- holding institution is directly between the consumer and the account-holding institution, disclosures must be given in close proximity to the event requiring disclosure, for example, when the consumer contracts for a new service.
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