The federal regulators provide guidance addressing the timing & content of communications with consumers obtaining interest-only HELOCs. The agencies are concerned that consumers may not fully understand the product terms & associated risks. Institutions should strive to:
- Focus on info important to consumer decision making;
- Highlight key info so that it will be noticed;
- Employ a user-friendly & readily navigable format for presenting the info; and
- Use plain language, with concrete & realistic examples.
Comparative tables & info describing key features of available loan products, including reduced documentation programs, also may be useful for consumers.
This info should be provided in a timely manner, to assist the consumer in the product selection process. Clear and balanced information should be provided at the time a consumer is shopping for a loan, not just when an application form is provided or at consummation.