With the first increase in the Prime Rate in almost ten years, those of you with variable-rate loan products (HELOCs, ARMs, etc.) may now have some compliance requirements that you haven’t had to worry about in a quite awhile.
It would be a good time to review the rate change notice requirements in §1026.20 to make sure your rate change notices meet the timing, content and formatting requirements for loans secured by a principal dwelling. Also, make sure that rate changes for both open and closed-end plans match your contract language and any other communications as well as that your systems accurately reflect any change.
In other words, “Do What You Say and Say What You Do”. It seems simple enough but we know that variable rate products can sometimes be anything but simple…especially when you haven’t had to worry about changes to the Prime Rate for quite some time.