An advertisement made through television or radio stating any of the terms requiring additional disclosures under paragraph (d)(2) of this section may comply with paragraph (d)(2) of this section either by: (1) Stating clearly and conspicuously each of the additional disclosures required under paragraph (d)(2) of this section; or. Truth in Lending Act (TILA)/Reg Z. Understand the compliance issues and risks around advertising with Regulation Z. See interpretation of 16(g) Promotional Rates and Fees in Supplement I. Additional information. If any annual percentage rate that may be applied to a plan is a promotional rate, or if any payment applicable to a plan is a promotional payment, the following must be disclosed in any advertisement, other than television or radio advertisements, in a clear and conspicuous manner with equal prominence and in close proximity to each listing of the promotional rate or payment: (A) The period of time during which the promotional rate or promotional payment will apply; (B) In the case of a promotional rate, any annual percentage rate that will apply under the plan. The term promotional rate means, in a variable-rate plan, any annual percentage rate that is not based on the index and margin that will be used to make rate adjustments under the plan, if that rate is less than a reasonably current annual percentage rate that would be in effect under the index and margin that will be used to make rate adjustments under the plan. Multi-purpose telephone number. State and federal laws and regulators that mandate specific rules when promoting financing include, but are not limited to: UDAAP (Unfair, Deceptive and Abusive Acts & Practices) laws Truth in Lending Act (TILA), including Regulation Z The Federal Trade Commission (FTC) For example, if a payment of $500 results from an assumed $10,000 draw, and the payment would increase to $1,000 if the consumer made an additional $10,000 draw, the payment is not a promotional payment. Advertisement is defined similarly under FDIC advertising rules as: "a commercial message, in any medium, that is designed to attract public attention or patronage to a product or business." . (5) Envelope excluded. This section may require disclosure of several payment amounts, including any balloon payment. (iv) Promotional fee means a fee required to be disclosed under 1026.6(b)(1) and (2) applicable to an open-end (not home-secured) plan, or to one or more balances or transactions on an open-end (not home-secured) plan, for a specified period of time that is lower than the fee that will be in effect at the end of that period for such plan or types of balances or transactions. Real Estate Advertising Rules - Iowa REALTORS 1026.14 Determination of annual percentage rate. An advertisement stating any of the terms in paragraph (d)(1) of this section shall state the following terms, as applicable (an example of one or more typical extensions of credit with a statement of all the terms applicable to each may be used): (i) The amount or percentage of the downpayment. If the promotional rate or promotional fee is not listed on the principal promotional document or there is no principal promotional document, the first listing is the most prominent listing of the rate or fee on the front side of the first page of each document listing the promotional rate or promotional fee. See comment 40(d)(5)(ii)-3 for information not required to be stated in advertisements, and on situations in which the balloon payment requirement does not apply. If, however, the advertised annual percentage rate is not based on (or the advertised payment is not derived from) the index and margin that will be used to make rate (or payment) adjustments, and a reasonably current application of the index and margin would result in a higher annual percentage rate (or, given an assumed balance, a higher payment) then there is a promotional rate or promotional payment. Highlights of General Advertising Rules Unfair or Deceptive Practices Maryland Law Federal Law Truth in Savings Truth in Lending Rules Open-End Credit Closed-End Credit Unfair or DeceptiveActs and Practices Advertisement that has a capacity to deceive. (2) Additional terms. Learn how to enroll, and get started. (i) A statement that interest will be charged from the date the consumer becomes obligated for the balance or transaction subject to the deferred interest offer if the balance or transaction is not paid in full within the deferred interest period; and. Thus, if a creditor states payment information about the repayment phase, this will trigger the duty to provide additional information under 1026.16, but not under 1026.24. Electronic advertisement. (5) Envelope excluded. Z's advertising schemes (open-end: Section 226.16 and closed-end: Section 226.24 .) 1026.16 Advertising. | Consumer Financial Protection Bureau PDF Truth in Lending Act (Regulation Z) - NCUA Discover how to navigate the community reinvestment landscape, all in a new webinar series from ABA. 3. (iii) The amount of any payment. L. 90-321). 1. Allocation of payments. It is not an official legal edition of the CFR. v. Conversion option. For written or electronic advertisements, information required to be disclosed in 1026.16(h)(4)(i) and (ii) that is in the same paragraph as the first statement of no interest, no payments, deferred interest, or same as cash or similar term regarding interest or payments during the deferred interest period is deemed to be in a prominent location closely proximate to the statement. (b) Advertisement of terms that require additional disclosures. 8. In variable-rate transactions, payments that will be determined based on the application of the sum of an index and margin shall be disclosed based on a reasonably current index and margin; (B) The period of time during which each payment will apply; and. (5) Misleading claims of debt elimination. Examples: If the credit terms of a plan vary depending on the amount of the balance outstanding, rather than the amount of any property purchased, a table or schedule complies with 1026.16(c)(2) if it includes the required disclosures for representative balances. To the extent that an advertisement mentions specific credit terms, it may state only those terms that the creditor is actually prepared to offer. Application to variable-rate transactions. The disclosure of the total of payments and the time period to repay the obligation must be equally prominent to the statement of the periodic payment amount. (3) Balloon payment. 2. For example, a creditor would disclose that a periodic rate of 1.5% is applied to balances of $500 or less, and a 1% rate is applied to balances greater than $500. Information required to be disclosed in 1026.16(d)(6)(ii) that is in the same type size as the promotional rate or payment is deemed to be equally prominent. (2) Discounted and premium rates. 1. If any deferred interest offer is advertised, the information in paragraphs (h)(4)(i) and (h)(4)(ii) of this section must be stated in the advertisement, in language similar to Sample G-24 in appendix G to this part. PDF Credit Card Account Management Examination Procedures 2014 CFPB Dodd-Frank Mortgage Rules Readiness Guide. The commentary to Regulation Z seems to suggest that there are no specific rules about what satisfies the clear and conspicuous standard with respect to the additional disclosures required by sections 1026.16 (b) (1) (i) through (iii). The Code of Federal Regulations (CFR) is the official legal print publication containing the codification of the general and permanent rules published in the Federal Register by the departments and agencies of the Federal Government. A balloon payment results if paying the minimum periodic payments does not fully amortize the outstanding balance by a specified date or time, and the consumer is required to repay the entire outstanding balance at such time. (ii) Is less than other minimum payments under the plan derived by applying a reasonably current index and margin that will be used to determine the amount of such payments, given an assumed balance. Examples. Payments are made timely so as not to be considered late by the creditor; ii. (e) Alternative disclosures - television or radio advertisements. (3) Stating the term introductory. 1026.59 Reevaluation of rate increases. 4. (1) If a catalog or other multiple-page advertisement, or an electronic advertisement (such as an advertisement appearing on an Internet Web site), gives information in a table or schedule in sufficient detail to permit determination of the disclosures required by paragraph (d)(2) of this section, it shall be considered a single advertisement if: (i) The table or schedule is clearly and conspicuously set forth; and. General. Deferred billing and deferred payment programs. The requirements in paragraph (g)(4) of this section do not apply to an envelope or other enclosure in which an application or solicitation is mailed, or to a banner advertisement or pop-up advertisement, linked to an application or solicitation provided electronically. The Electronic Code of Federal Regulations (eCFR) is a continuously updated online version of the CFR. (4) Stating the terms of the deferred interest or similar offer. 1. No interest rate changes will affect the account; iv. For printed advertisements made available to the general public, including ones contained in a catalog, magazine, or other generally available publication, it was in effect within 30 days before printing. 3. 1026.54 Limitations on the imposition of finance charges. CR17 - Reg Z Advertising Flashcards | Quizlet (ii) A reasonably current annual percentage rate that would have been in effect using the index and margin. If an advertisement for credit secured by a dwelling states a simple annual rate of interest and more than one simple annual rate of interest will apply over the term of the advertised loan, the advertisement shall disclose in a clear and conspicuous manner: (A) Each simple annual rate of interest that will apply. (e) Catalogs or other multiple-page advertisements; electronic advertisements. 7. iii. How is advertising regulated? Prominent location closely proximate. The multiple-page advertisements to which 1026.16(c) refers are advertisements consisting of a series of sequentially numbered pages - for example, a supplement to a newspaper. Some home-equity plans contain a preferred-rate provision, where the rate will increase upon the occurrence of some event, such as the consumer-employee leaving the creditor's employ, the consumer closing an existing deposit account with the creditor, or the consumer revoking an election to make automated payments. 1026.46 Special disclosure requirements for private education loans. A preferred-rate provision does not, by itself, make the rate or payment under the preferred-rate provision a promotional rate or payment. Membership fees for open-end (not home-secured) plans. (iii) In the case of an advertisement for both variable-rate transactions and non-variable-rate transactions, (A) The phrase Adjustable-Rate Mortgage, Variable-Rate Mortgage, or ARM appears in the advertisement with equal prominence as any use of the term fixed, Fixed-Rate Mortgage, or similar terms; and. Overview. 'Regulation Z: Advertising Rules and Requirements' reviews the rules and requirements surrounding Regulation Z, including history, purpose, coverage, and disclosures. See interpretation of Paragraph 16(b)(2) in Supplement I. (3) Disclosure of payments(i) In general. (1) Scope. The MinBanc program reimburses training costs for minority- and women-owned banks, including training with ABA. However, if the final payment could not be more than twice the amount of other minimum payments, the final payment need not be disclosed. Section 1026.16(d)(1)(i) requires a disclosure of any fees imposed by the creditor or a third party to open the plan. Reg Z Advertisement Trigger Terms | For Bankers. From Bankers If any annual percentage rate that may be applied to the account is a promotional rate under paragraph (g)(2)(i) of this section or any fee that may be applied to the account is a promotional fee under paragraph (g)(2)(iv) of this section, the information in paragraphs (g)(4)(i) and, as applicable, (g)(4)(ii) or (iii) of this section must be stated in a clear and conspicuous manner in the advertisement. 1026.1 Authority, purpose, coverage, organization, enforcement, and liability. See interpretation of 16(b) Advertisement of Terms That Require Additional Disclosures in Supplement I. Regulation Z: Advertising Rules and Requirements - Lorman If an advertisement states an initial annual percentage rate that is not based on the index and margin used to make later rate adjustments in a variable-rate plan, the advertisement also shall state with equal prominence and in close proximity to the initial rate: (i) The period of time such initial rate will be in effect; and. Information disclosed in a footnote will not be considered in a prominent location closely proximate to the listing. . 1026.57 Reporting and marketing rules for college student open-end credit. Format of Regulation Z The rules creditors must follow differ depending on whether the creditor is offering open-end credit, such as credit cards or home-equity lines, or closed-end credit, such as car loans or mortgages. If any of the above terms are in your ad the following additional disclosures must be made: (2) Additional terms. (ii) Any statement of terms set forth in 1026.6 appearing anywhere else in the catalog or advertisement clearly refers to the page or location where the table or schedule begins. Consistent with comment 16(c)-1, a catalog or multiple-page advertisement is considered one document for purposes of 1026.16(h)(4). Making any misleading claim in an advertisement that the mortgage product offered will eliminate debt or result in a waiver or forgiveness of a consumer's existing loan terms with, or obligations to, another creditor. 2. The advertisement includes a clear and conspicuous comparison to the information required to be disclosed under 1026.24(f)(2) and (3); and. Reasonably current index and margin. Specific credit terms. Learn about the ACRE Act, and how your bank can make a difference in rural America with free resources from ABA. Implicit terms. (6) Misleading use of the term counselor. Our team has extensive experience in reviewing mortgage advertisements and advising clients about mortgage compliance issues including use of Compliance Management Systems, State and Federal compliance matters, and running the Legal and Compliance departments of major mortgage banking entities. Regulation Z and TV and Radio Advertisements | NAFCU The requirements of this paragraph apply to any advertisement for credit secured by a dwelling, other than television or radio advertisements, including promotional materials accompanying applications. Regulation Z broadly defines advertisements as any commercial messages that promote consumer credit; and the official commentary to Regulation Z states that the regulation's . Privately Owned Vehicle (POV) Mileage Reimbursement Rates (i) When the promotional rate or promotional fee will end; (ii) The annual percentage rate that will apply after the end of the promotional period. (h) Deferred interest or similar offers . Module 1: Advertising and Marketing . If an advertisement states a rate of finance charge, it shall state the rate as an annual percentage rate, using that term. specific rules for the format of the necessary disclosures, other than the format requirements related to the disclosure of a promotional rate or payment under 1026.16(d)(6), a promotional rate or promotional fee under 1026.16(g), or a deferred .
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