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Do we need to disclose initial HELOC fees that we pay and that are not charged to the borrower, such as flood determination fees? – IBA Compliance Connection

IBA Compliance Connection

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Do we need to disclose initial HELOC fees that we pay and that are not charged to the borrower, such as flood determination fees?

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We do not believe that you are required to disclose any fees paid by the lender in a home equity line of credit (HELOC) disclosure. Regulation Z’s disclosure requirements for HELOCs (12 CFR 1026.40) require that you disclose fees “to open, use, or maintain the plan” that are imposed by the creditor or by third parties. 12 CFR 1026.40(d)(7), (8). There is no requirement to disclose fees that are not paid by the borrower. However, note that you must disclose any fees that you may require the borrower to refund on an early cancellation of the HELOC. 12 CFR 1026.40(d)(4)(i).