A booklet for home-equity line of credit prospects that is required by the Truth in Lending Act has been updated by the Consumer Financial Protection Bureau.
TILA was expanded by The Home Equity Loan Consumer Protection Act of 1988, which required additional disclosures for “open end consumer credit plans … secured by the consumer’s principal dwelling.”
Among the additional disclosures are pamphlets that must be provided at the time of the application. The booklets provide a general description of open end consumer credit plans secured by the borrower’s primary residence the terms and conditions under which HELOCs are generally extended, and a discussion of potential advantages and disadvantages of HELOCs, a CFPB public filing stated.
On Friday, the financial services watchdog released an updated What You Should Know about Home Equity Lines of Credit.
Among the new features are a table that compares HELOCs with other available products. An expansion of the comparison table is intended to encourage consumers to understand HELOC terms and to shop for the most advantageous offer.
According to the CFPB, this version of the booklet was updated to align with the agency’s educational efforts. In addition, the most-recent iteration is reportedly more concise, readable and usable.