The chairman of California's Assembly Committee on Consumer Financial Protection says the nation's largest banks refused to testify at a hearing this week that was set to investigate the banks' practice of suspending and reducing consumers' home equity lines of credit (HELOCs).
Representatives from Chase, Citi, Wells Fargo and Bank of America were invited to speak about their HELOC practices in the state, according to Assemblyman Ted Lieu, D-Torrance. The hearing has since been canceled due to the banks' unwillingness to participate, Lieu says.
"I have heard from many constituents who have had their HELOCs stripped away from them, often without any apparent legitimate basis,’ Lieu says. ‘The banks owe the people of the State of California an explanation for these credit line suspensions that have had significant adverse effects on individuals, families and the California economy. It's very suspicious that the banks would turn down an opportunity to explain themselves."
Large national and regional banks have been suspending HELOCs and reducing credit lines since 2008 as a result of declines in the values of the properties securing those credit lines. According to Lieu, many borrowers and consumer advocates have stated that banks have gone too far, suspending HELOCs en masse and often in the absence of circumstances warranting such suspensions.
SOURCE: Office of Assemblyman Ted Lieu