Supervision and Regulation Letters
SR 14-5 / CA 14-4
Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods
SUPERVISION AND REGULATION
AND COMMUNITY AFFAIRS
|SUBJECT:||Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods|
The Federal Reserve, along with the other federal financial institutions regulatory agencies1 and the Conference of State Bank Supervisors, issued the attached guidance to reiterate principles of sound risk management for home equity lines of credit (HELOCs) that have reached or will be reaching their end-of-draw periods. The agencies expect supervised institutions to have adequate risk management practices to monitor, manage, and control the risks in their HELOC portfolios as lines near their end-of-draw periods as well as to promote compliance with applicable laws and regulations.
Building on previously issued guidance, this HELOC guidance describes risk management practices that promote a clear understanding of potential exposures and help guide consistent, effective responses to HELOC borrowers who may be unable to meet contractual obligations at their end-of-draw periods.2 Additionally, the guidance highlights concepts related to financial reporting for HELOCs.
Reserve Banks are asked to distribute this letter to the supervised institutions in their districts and to appropriate supervisory staff. Questions regarding this letter should be directed to the following individuals:
- Division of Banking Supervision and Regulation: David Emmel, Manager, at (202) 912-4602; or Donald Gabbai, Senior Supervisory Financial Analyst, at (202) 452-3358.
- Division of Consumer and Community Affairs: for general questions, Amal Patel, Senior Supervisory Consumer Financial Services Analyst, at (202) 912-7879; and for operational questions, Tim Robertson, Manager, at (202) 452-2565.
In addition, institutions may send questions via the Board's public website.3
Maryann F. Hunter
Division of Banking
Supervision and Regulation
Division of Consumer
and Community Affairs
- The other federal financial institutions regulatory agencies include the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency. Return to text
- The guidance includes references to relevant existing guidance that should be considered by a supervised institution in developing its risk management practices for HELOCs. Return to text
- See http://www.federalreserve.gov/apps/contactus/feedback.aspx Return to text