FDIC issue guideline to reduce HELOC Limits -- ZT

The Federal Deposit Insurance Corp. recently issued guidance
for lenders and servicers contemplating reducing credit
limits on HELOCs or suspending a borrowers' ability to draw
on their lines.

According to K&L Gates, the agency believes freezing or
suspending HELOCs may be a prudent and appropriate way to
manage credit risk. However, the agency also is reminding
the banks it regulates that they must follow the law
including adhering to the Truth in Lending Act and other
pieces of legislation…