[kmeade]

For HELOCs and consumer non-home secured revolving lines of credit we use the B statement from 1026.7(b) for the periodic statement rules. On the initial periodic statement (using the B statement), what fees are required to be listed and how? Do you only have to list prepaid fees, or do you have to list all fee shown on the credit agreement, like attorney fees, appraisal fees, recording fees, etc.?

[rcooper]

Kathy,
I think you would include the fees based on the language below. I’ll ask Jack to review.
Thanks for your patience!

1026.7(b)(6)
(iii) Fees. Charges imposed as part of the plan other than charges attributable to periodic interest rates must be grouped together under the heading Fees, identified consistent with the feature or type, and itemized, and a total of charges, using the term Fees, must be disclosed for the statement period and calendar year to date, using a format substantially similar to Sample G–18(A) in Appendix G to this part.

Official Interpretation
7(b)(6) Charges Imposed
1. Examples of charges. See commentary to §1026.6(b)(3

**
1026.6(b)(3)(ii) Charges imposed as part of the plan are:

(A) Finance charges identified under §1026.4(a) and §1026.4(b).

(B) Charges resulting from the consumer’s failure to use the plan as agreed, except amounts payable for collection activity after default, attorney’s fees whether or not automatically imposed, and post-judgment interest rates permitted by law.

(C) Taxes imposed on the credit transaction by a state or other governmental body, such as documentary stamp taxes on cash advances.

(D) Charges for which the payment, or nonpayment, affect the consumer’s access to the plan, the duration of the plan, the amount of credit extended, the period for which credit is extended, or the timing or method of billing or payment.

(E) Charges imposed for terminating a plan.

(F) Charges for voluntary credit insurance, debt cancellation or debt suspension.

Official Interpretation
Paragraph 6(b)(3)(ii)
1. Failure to use the plan as agreed. Late payment fees, over-the-limit fees, and fees for payments returned unpaid are examples of charges resulting from consumers’ failure to use the plan as agreed.

2. Examples of fees that affect the plan. Examples of charges the payment, or nonpayment, of which affects the consumer’s account are:

i. Access to the plan. Fees for using the card at the creditor’s ATM to obtain a cash advance, fees to obtain additional cards including replacements for lost or stolen cards, fees to expedite delivery of cards or other credit devices, application and membership fees, and annual or other participation fees identified in §1026.4(c)(4).

ii. Amount of credit extended. Fees for increasing the credit limit on the account, whether at the consumer’s request or unilaterally by the creditor.

iii. Timing or method of billing or payment. Fees to pay by telephone or via the Internet.

3. Threshold test. If the creditor is unsure whether a particular charge is a cost imposed as part of the plan, the creditor may at its option consider such charges as a cost imposed as part of the plan for purposes of the Truth in Lending Act.

[kmeade]

The reason I question this is because the fees listed in Sample G–18(A) in Appendix G only shows prepaid fees. This example does not show third party fees.

[rcooper]

After looking at the requirements and discussing this further, we believe the safest approach maybe to include fees paid out of the first draw (this would be in line with the HELOC rules in section 1026.7(a)(6)(i)-8 which is the closest thing we have to insight into what can be on a HELOC stmt).

[Author]

Posts