Federal credit unions can add a floor rate to variable rate home equity loans if the original agreement disclosed that such an addition is possible, according to an NCUA legal opinion.
NCUA Associate General Counsel Sheila Albin also wrote that an FCU can't change an APR unless the change "is based on a publicly available index that is not under the FCU's control." Those credit unions can make changes if the agreement allows for stepped-rate or preferred rate plans.
She also wrote that the credit union and the borrower can, by written agreement, change the terms of a home equity plan.
Albin wrote the opinion earlier this month in response to a letter from Glenn D. Solomon, an attorney from Owings Mill, Maryland.
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