We provide an access device (card) for our HELOC loan customers. Due to lack of activity we have decided to stop offering this feature and close down the current HELOC cards. How much notice do we need to provide our current clients that we will be discontinuing this feature and shutting the card down?
Under the requirements in 1026.9(c)(1) you must provide notice 15 days prior to the effective date of the change on a home equity line. But the rules in 1026.40 do not allow changes to HELOC unless certain conditions exist. Section 1026.40(f)(3)(iii) allows a change if the consumer agrees to the change.
So instead of just providing a notice of change, provide the customer with a notice explaining the change and obtain the consumer’s consent (signature) agreeing with the change.