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Created by the U.S. Congress in 1970, the National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions, protects the members who own credit unions, and charters and regulates federal credit unions.
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Cyberattacks and cybersecurity vulnerabilities pose significant risks to the financial system. Because of vulnerabilities within the credit union industry and the broader financial system to potential cyberattacks, cybersecurity is one of the NCUA’s top supervisory priorities and a top-tier risk under the agency’s enterprise risk-management program.

Waiver of Fees on Home Equity Loans

96-0406 / April 1996

Waiver of Fees on Home Equity Loans

Subject

Mortgage Lending

Historic Status

Non-historic

April 29, 1996

Dorothy R. Jedlick, Manager
Irvin Works Federal Credit Union
P.O. Box 250
Dravosburg, PA 15034-0250

Re: Waiver of Fees on Home Equity Loans (Your April 3, 1996, Letter)

Dear Ms. Jedlick:

You have asked whether a federal credit union ("FCU") that waives the fees associated with a home equity loan can require a borrower to reimburse the FCU if the borrower repays his entire loan within six months of origination. As described in the enclosed letters, this practice is permissible when the borrower agrees to only make the scheduled monthly payments for a specified period in return for the FCU waiving the fees. See Letters from Hattie M. Ulan, Associate General Counsel to Beth Ringgenberg, CUNA Mutual Insurance Group, Re: Prepayment Penalties – Loan Incentives, dated June 14, 1993, and to George Poitou, California Credit Union League, Re: Prepayment Penalties – Waiver of Fees, dated March 9, 1993.

I hope that we have been of assistance.

Sincerely,

Richard S. Schulman
Associate General Counsel

GC/JM:bhs
SSIC 3500
96-0406
Enclosures

Last modified on

11/14/24