As you are all very much aware, there have been a lot of changes to Regulation Z. Effective July 1st, changes to the Billing Rights Notice became effective. These changes created different model language to be used depending on whether the plan is secured by a dwelling or not.
Appendix G contains two long form notices. G-3 is for home equity plans and G-3A is for non-dwelling secured plans. The long form notices must be provided at closing and annually (unless your institution utilizes the monthly statement option). Appendix G also contains two short form notices (monthly statement option). G-4 is for home equity plans and G-4A is for non-dwelling secured plans. This makes it appear that you are going to have to use different statement paper for dwelling and non-dwelling secured open-end plans (or the back of the statement will be very cluttered!). BUT, if you look at the Commentary to Appendix G you may be able to kill two birds with one stone.
The Commentary states that for home equity plans you may use G-3 or G-3A (long forms) or G-4 or G-4A (short forms). For non-dwelling secured plans, G-3A (long form) or G-4A (short form) must be used. So, if you offer both HELOCs and overdraft lines of credit (and you want to use the same statement paper for both products) you can use G-4A.
Below is the G-4A Model language that may be use for both HELOCs and overdraft lines on the back of the periodic statements:
What to Do If You Think You Find a Mistake on Your StatementIf you think there is an error on your statement, write to us at the address listed on the front of this statement. In your letter, give us the following information:
1. Account information: Your name and account number.
2. Dollar amount: The dollar amount of the suspected error.
3. Description of Problem: If you think there is an error on your bill, describe what you believe is wrong and why you believe it is a mistake.
You must contact us within 60 days after the error appeared on your statement. You must notify us of any potential errors in writing. You may call us, but if you do we are not required to investigate any potential errors and you may have to pay the amount in question. While we investigate whether or not there has been an error, the following are true:
1. We cannot try to collect the amount in question, or report you as delinquent on that amount.
2. The charge in question may remain on your statement, and we may continue to charge you interest on that amount. But, if we determine that we made a mistake, you will not have to pay the amount in question or any interest or other fees related to that amount.
3. While you do not have to pay the amount in question, you are responsible for the remainder of your balance.
4. We can apply any unpaid amount against your credit limit.
For more information on other open-end changes, please see the September issue of our newsletter, Banking on BCC.
David’s banking career began as a field examiner for the FDIC in 1990. He later became a Compliance Officer and Loan Officer for a small bank. In 1993, he established Banker’s Compliance Consulting. Along with his amazingly talented Team, he has written numerous compliance articles for prestigious banking publications and has developed compliance seminars that Banker’s Compliance Consulting produces.
He is an expert in compliance regulations. He is also a motivational speaker and innovative educator. His quick wit and sense of humor transform the usually tiring topic of compliance into an enjoyable educational experience. David is on the faculty of the American Bankers Association National Compliance Schools and has served on the faculty of the Center for Financial Training for many years. He also is a frequent speaker at the ABA’s Regulatory Compliance Conference. He is also a trainer for hundreds of webinars, is a Certified Regulatory Compliance Manager (CRCM), and has been a BankersOnline Guru for many years. The American Bankers Association honored David with their Distinguished Service Award in 2016.
David and his wife Karen have 3 adult children and 2 grandsons (none of whom live at home!) and 3 cats (of which Dave is allergic … the cats, not the children!). They live on a lake in Nebraska and when possible he can be found fishing or making sawdust in his shop. David plays the guitar & piano and enjoys singing with Karen. They occasionally lead worship at their church.