Home equity lines of credit are giving banks a headache. National City Corp. apparently wants to limit the potential pain: The institution is offering cash incentives to some customers if they close unused HELOCs, rather than charging customary penalties. Press reports say the thank you comes in a $200 check.
National City is trying hard not to make a splash about the offer. There was nothing on the corporate website about the deal as this newsletter was being posted, and the bank was mum on details and specific procedures. “We are offering selected customers who have home equity lines that have no balance and have not been drawn down the opportunity to close them without penalty and with a financial reward,” says National City spokesperson Kelly Wagner Amen. The bank will reallocate the funds required to maintain the dormant HELOCs.
The offer “doesn’t include all customers,” Amen emphasizes. “There’s a deadline spelled out in a letter specific to each qualified customer. We continue to evaluate the program’s effectiveness and are pleased with the results so far.” National City may expand the program at some point.