On July 1, 2014, the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA) and the Conference of State Bank Supervisors (CSBS) issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their end-of-draw periods. The guidance describes how financial institutions can effectively manage their potential exposures and describes appropriate responses to HELOC borrowers unable to meet their contractual obligations when the draw period ends and the HELOC resets to full repayment. The appropriate accounting and reporting procedures for HELOCs nearing their end-of-draw periods are also discussed. The guidance is arranged under the following topics: • Prudent underwriting for renewals, extensions, and rewrites. • Compliance with pertinent existing guidance. • Use of well-structured and sustainable modification terms. • Appropriate accounting, reporting, and disclosure of troubled debt restructurings.

Complete Memorandum