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Advanced Search Board of Governors of the Federal Reserve System The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system. About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Home > News & Events > Press Releases Joint Press Release July 01, 2014 Agencies issue guidance for home equity lines of credit nearing their end-of-draw periods Office of the Comptroller of the Currency Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation National Credit Union Administration Conference of State Bank Supervisors For release at 10:00 a.m. EDT Share Four federal financial institutions regulatory agencies and the Conference of State Bank Supervisors (CSBS) today issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their "end-of-draw" periods, which occurs when the principal amount of the HELOC must begin to be repaid. The guidance encourages financial institutions to effectively communicate with borrowers about the pending reset and provides broad principles for managing risk as HELOCs reach their end-of-draw periods. The agencies and CSBS recognize that financial institutions and borrowers may face challenges as HELOCs near their end-of-draw periods. Many borrowers will continue to meet their contractual obligation when their loan resets to an amortizing payment or reaches a balloon maturity. However, some may find it difficult to make higher payments or to refinance their existing loans due to changes in their financial circumstances or declines in property values. When borrowers experience financial difficulties, financial institutions and borrowers generally find it beneficial to work together to avoid unnecessary Economic Research Data Consumers & Communities defaults. The guidance describes how financial institutions can effectively manage their potential exposures under these circumstances. The guidance promotes an understanding of potential exposures and describes consistent, effective responses to HELOC borrowers unable to meet their contractual obligations. The appropriate accounting and reporting procedures for HELOCs nearing their end-of-draw periods are also discussed. Attachment Media Contacts: Media Contacts: Federal Reserve Susan Stawick FDIC Greg Hernandez NCUA Ben Hardaway OCC Stephanie Collins CSBS Catherine Woody 202-452-2955 202-898-6984 703-518-6333 202-649-6870 202-728-5733 Last Update: July 01, 2014 BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM About the Fed News & Events Monetary Policy Supervision & Regulation Payment Systems Economic Research Data Consumers & Communities Financial Stability TOOLS AND INFORMATION STAY CONNECTED Contact Publications Freedom of Information (FOIA) Office of Inspector General Budget & Performance | Audit No FEAR Act Español Website Policies | Privacy Program Accessibility BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM 20th Street and Constitution Avenue N.W., Washington, DC 20551