[TheBank]

We are wanting to change our home equity lines of credit terms on new lines going forward from having a set interest rate floor of a certain % across the board to the initial interest rate on each individual HELOC (priced using a rate matrix) to being the floor. We are having an issue with getting our early HELOC program disclosure to show this properly. We use Laser Pro Software. Has anyone had this issue? Are we only allowed to disclose an actual interest rate floor, or can we state something like “the interest rate floor is the initial interest rate at origination”? If so how can this wording be added?
OR
Would we have to state the interest rate floor, it’s not specifically mentioned in Z, but inferred under terms of the account.

[jholzknecht]

You have hit upon an oddity in the open-end credit rules of Regulation Z. The rules require the disclosure of rate caps but not rate floors. We believe that floors should be disclosed as part of the contract terms and contract terms and disclosures are generally intermingled for open-end credit.

You will need to contact LaserPro regarding the language that appears in your document. Would it be difficult to key the rate into the rate field and into the floor field at the same time?

[Author]

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