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Risk Management of Home Equity Lines of Credit Approaching the End-of-Draw Periods: Interagency Guidance

July 1, 2014


Risk Management of Home Equity Lines of Credit Approaching the End-of-Draw Periods

Date: July 1, 2014

To: Chief Executive Officers of All National Banks, Federal Savings Associations, Federal Branches and Agencies of Foreign Banks, Department and Division Heads, All Examining Personnel, and Other Interested Parties

Description: Interagency Guidance


The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the National Credit Union Administration (collectively, the agencies), in conjunction with the Conference of State Bank Supervisors, have jointly issued supervisory guidance on risk management practices for home equity lines of credit (HELOC) approaching the end-of-draw (EOD) period.


As HELOCs approach scheduled maturity or repayment phases, borrowers could face substantial payment shock when they are required to start amortizing principal. Borrowers may be unable to meet new payment terms or refinance existing debt as economic conditions and property values may have changed since origination. As HELOC draw periods approach expiration, the agencies expect lenders to manage risks in a disciplined, prudent manner; to work with troubled borrowers to avoid unnecessary defaults; and to engage in appropriate risk recognition.

The guidance describes

- five core operating principles that should govern management's oversight of HELOCs nearing their EOD period.

- 10 EOD risk management expectations that promote a clear understanding of potential exposures and help guide consistent, effective responses to HELOC borrowers who may be unable to meet contractual obligations.

See original table at:

Further Information

Please contact your supervisory office or direct questions to Robert Piepergerdes, Director for Retail Credit Risk, at (202) 649-6220.

John C. Lyons Jr.

Senior Deputy Comptroller and Chief National Bank Examiner

- "Interagency Guidance on Home Equity Lines of Credit Nearing Their End-of-Draw Periods" ( (PDF)

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Source: Treasury Department Documents and Publications

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