Short term loans Wyoming

Board staff has been considering the issue of home equity lending Texas same day loans within the context of Truth in Digitized by VjOOQIC 70 Lending disclosure requirements.

Specifically, the staff has focused on the content, timing, and format of the disclosures required under Regulation Z as possible candidates for regulatory change. Board staff is preparing a proposal that would amend Regulation Z to address these issues and expects to present their recommendations to the Board sometime next month. Although the review is still in process, and neither the staff nor the Board has made any firm decisions about what can and should be done, installment loans online Iowa I would like to share with you some of the particular issues we have been con elder ing. Under current requirements, when a home equity plan is opened, a creditor need only give those general disclosures that I previously outlined.

Creditors are not required to disclose certain items, such as their right to unilaterally change the terms and conditions of the plan, or the possibility that a balloon payment may be required as part of the plan. It is conceivable that Regulation Z could be amended to require disclosure of these features. There also may be a need to require more disclosures in home equity line advertisements. Some questions raised in this regard include whether "teaser" Digitized by VjOOQIC 71 6 - rates are adequately disclosed as only lasting for a limited time period and whether disclosing a payment term in an advertisement should require disclosure of other material terms, such as the annual percentage rate or fees to be charged under the plan. Another area we have identified as one to look into concerns North Dakota payday loans online the timing of disclosures.

Regulation Z currently permits open-end credit disclosures to be given anytime prior to the first transaction. In the case of home equity lines of credit, therefore, consumers, in many cases, do not receive disclosures about the terms and conditions of the plan until closing. Since most home equity credit plans involve large up- front fees and tend to be more complex than other types of open-end credit, an argument can be made for requiring disclosure of the fees, terms, and conditions of such plans at an earlier time in the credit process. Finally, concern has been expressed that consumers may not fully understand the terms and conditions of the programs. This concern may be due, in part, to the complexity of these plans and the fact that the underlying contracts could run several pages in length. Currently, Regulation Z does not require any special format for open-end disclosures. As a Digitized by VjOOQIC 72 7 - result, in most cases, the disclosures given for these plans are not segregated from the contractual provisions or highlighted in any standard manner. We believe that consumers should be aler-ted to the most important terms and conditions of the plans for which they contract. To the extent that the current regulatory requirements fail to meet this goal, it might be necessary to require that disclosures about these plans be segregated from other information. The Federal Reserve Board shares the goal that consumers receive adequate information at a relevant stage of the credit process when they contract for home equity loans. Therefore, we look forward to working with you on this Important subject.

Home equity loans and lines of credit are proving to be ftmcmg the niost popular and useful financial products In A genera tion. Is that overly restrictive new legislation on home equity credit Is unneeded.

At best, congressional consideration should be limited to minor modlficfl ions of the existing disclosure scheme, such as are proposed fn H,R 3011 introduced by Congressman David Price of North Carolina. ErroTTeous Presumptions Must Be Laid to Rest Initiatives to Impose substantfve restraints on home equity lending practices are based on a number of erroneous presumptions.

These range from mi sirnders landings of tbe nature of open-end lending practices In general and home equUy loans in particular, to outright mistakes and mischaracterlzatlons concerning the applkabflUy of existing state and federal disclosure and consumer protection. They short term loans Wyoming also evidence a pervasive bias that must be laid to rest Immediately. That the notion that home equity borrowers and lenders together are bent on rushing blindly and even Irresponsibly toward the brink of short term loans Wyoming financial ruin. This notion is totally insupportable when one reviews current consumer usage patterns, delinquency and default rates, and industry credit granting standards and practices, educationa efforts and foreclosure experiences. It Is Important to focus on the essence of the home equity line short term loans Wyoming of credit (HELC) relatfonshlp. Digitized by VjOOQIC 74 and deliberation by a financially experienced borrowing public. The demographic profile of this HELC service underscores these points. During the spring of 1987, the Survey Research Center (short term loans Wyoming SRC) of the University of Michigan studied the subject on behalf of the Division of Researcb and Statistics of the Board of Governors of the Federal Reserve System. The results of each survey are strikingly similar where comparable questions were asked. Survey results are parenthetically referenced below by descriptive initials (i.

Less than lOX of the households surveyed by SftC hid e1t)ier appHed for or held a HELC.