(4) Stating the promotional period and post-promotional rate or fee. 12 CFR Part 1026 - Truth in Lending (Regulation Z) Most recently amended Jan. 1, 2023 Regulation Z protects people when they use consumer credit. See interpretation of Paragraph 16(b)(2) in Supplement I. (iv) The amount of any finance charge. An advertisement that refers to deductibility for tax purposes is not misleading if it includes a statement such as consult a tax advisor regarding the deductibility of interest. An advertisement distributed in paper form or through the Internet (rather than by radio or television) that states that the advertised extension of credit may exceed the fair market value of the consumer's dwelling is not misleading if it clearly and conspicuously states the required information in 1026.16(d)(4)(i) and (d)(4)(ii). Learn more about the program and find out if you qualify. Rate per mile. Log In: . If one of the statements does not appear on the front side of the first page of a document, then the first listing of one of these statements is the most prominent listing of a statement on the subsequent pages of the document. If any of the following terms is set forth in an advertisement, the advertisement shall meet the requirements of paragraph (d)(2) of this section: (i) The amount or percentage of any downpayment. Required Use of NMLS ID - NMLS Resource Center If any annual percentage rate or fee that may be applied to the account is an introductory rate or introductory fee, the term introductory or intro must be in immediate proximity to each listing of the introductory rate or introductory fee in a written or electronic advertisement. Requirements for over-the-limit transactions. It is not an official legal edition of the CFR. See interpretation of 16(c) Catalogs or Other Multiple-Page Advertisements; Electronic Advertisements in Supplement I. 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. (d) Advertisement of terms that require additional disclosures(1) Triggering terms. 1333 New Hampshire Avenue NWWashington, DC 20036, ABA/ABA Financial Crimes Enforcement Conference, Onboarding and Workplace Essentials Online Training, Marketing & Communications Online Training, Certified Financial Marketing Professional, Environmental Social and Governance Network, Americans with Disabilities Act Peer Group, Community Engagement and Reinvestment Committee, Cyber and Information Security Working Group, Diversity, Equity, and Inclusion Advisory Group, Diversity, Equity, and Inclusion Open Forum, Environmental Social and Governance Working Group, Minority Depository Institution Advisory Council, Moderate or Limited Trading Assets Working Group, Mortgage Markets & Lending Technology Committee, Risk Metrics/Key Risk Indicator Working Group, Telephone Consumer Protection Act Working Group, ABA Risk and Compliance Magazine Overview, Ability to Repay and "Qualified Mortgage" Exemption, Affordable Housing and Community Investment, Bank Secrecy Act / Anti-Money Laundering (BSA/AML) Reform, Current Expected Credit Loss Standards (CECL), Fiduciary Regulation by the Department of Labor, Flood Insurance Reauthorization and Reform, Community Development & Affordable Housing, Describe general advertising rules that comply with Regulation Z, Explain advertising requirements for closed-end credit, Explain special rules for closed-end credit advertising for loans secured by a dwelling, Explain advertising requirements for open-end credit, Explain special rules for open-end credit advertising for loans secured by a dwelling, Identify the special rules that apply to advertising mortgages, private education loans, and credit cards. Inapplicability of closed-end rules. Regulation Z: Advertising . 1026.58 Internet posting of credit card agreements. 1. Prominent location closely proximate. Regulation Z Comment 25 (c) (3)-2 (a) General rule. Negative as well as affirmative references trigger the requirement for additional information. PDF Truth in Lending Act (Regulation Z) - NCUA Implicit terms. Negative as well as affirmative references trigger the requirement for additional information. (1026.15), and advertising (1026.16). For advertisements in electronic form it was in effect within 30 days before the advertisement is sent to a consumer's email address, or in the case of an advertisement made on an Internet Web site, when viewed by the public; or. See interpretation of 16(g) Promotional Rates and Fees in Supplement I. 1026.56 Requirements for over-the-limit transactions. An advertisement shall not: Official interpretation of 8 (a) Misleading or inaccurate advertisements. (7) Misleading foreign-language advertisements. The following definitions apply for purposes of paragraph (d)(6) of this section: (A) Promotional rate. Definition. Special rules apply to credit card transactions only, such as certain . 1026.48 Limitations on private education loans. PDF Credit Card Account Management Examination Procedures L. 90-321). Misleading terms prohibited. Only positive periodic payment amounts trigger the additional disclosures under 1026.16(b)(2). 1026.14 Determination of annual percentage rate. Section 1026.16(a) is not intended to inhibit the promotion of new credit programs, but to bar the advertising of terms that are not and will not be available. If an advertisement is for credit secured by a dwelling, the advertisement shall not state any other rate, except that a simple annual rate that is applied to an unpaid balance may be stated in conjunction with, but not more conspicuously than, the annual percentage rate. Become a brand expert and hone your bank marketing skills. 3. Deferred interest or similar offers do not include offers that allow a consumer to skip payments during a specified period of time, and under which the consumer is not obligated under any circumstances for any interest or other finance charges that could be attributable to that period. February 9, 2015. 7. 1026.9 Subsequent disclosure requirements. Examples of disclosures that could be used to comply with the requirements of 1026.16(h)(3) include: no interest if paid in full within 6 months and no interest if paid in full by December 31, 2010., See interpretation of 16(h) Deferred Interest or Similar Offers in Supplement I. Specific credit terms. Today, I will be examining Regulation Z advertising requirements and exemptions for television and radio advertisements. An advertisement made through television or radio stating any of the terms requiring additional disclosures under paragraphs (b)(1) or (d)(1) of this section may alternatively comply with paragraphs (b)(1) or (d)(1) of this section by stating the information required by paragraphs (b)(1)(ii) or (d)(1)(ii) of this section, as applicable, and listing a toll-free telephone number, or any telephone number that allows a consumer to reverse the phone charges when calling for information, along with a reference that such number may be used by consumers to obtain the additional cost information. The requirements in paragraph (d)(6)(ii) of this section do not apply to an envelope 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. Information disclosed in a footnote will not be considered in a prominent location closely proximate to the listing. 1026.33 Requirements for reverse mortgages. This course is part of ABA Frontline Compliance Training, free to ABA member banks. (c) Catalogs or other multiple-page advertisements; electronic advertisements. (2) A catalog or other multiple-page advertisement or an electronic advertisement (such as an advertisement appearing on an Internet Web site) complies with this paragraph if the table or schedule of terms includes all appropriate disclosures for a representative scale of amounts up to the level of the more commonly sold higher-priced property or services offered. Real Estate Advertising Rules - Iowa REALTORS The maximum period from the date the consumer becomes obligated for the balance or transaction until the specified date by which the consumer must pay the balance or transaction in full in order to avoid finance charges, or receive a waiver or refund of finance charges, is the deferred interest period. Deferred interest does not include any finance charges the consumer avoids paying in connection with any recurring grace period. (iii) The fee that will apply after the end of the promotional period. If your bank participates, you can access this course for free. 1026.37 Content of disclosures for certain mortgage transactions (Loan Estimate). See interpretation of 16(b) Advertisement of Terms That Require Additional Disclosures in Supplement I. Consistent with comment 5(a)-2, the information required under 1026.16(h)(4) need not be segregated from other information regarding the deferred interest or similar offer. 1026.35 Requirements for higher-priced mortgage loans. (C) In an advertisement for credit secured by a first lien on a dwelling, the fact that the payments do not include amounts for taxes and insurance premiums, if applicable, and that the actual payment obligation will be greater. 2. 1026.22 Determination of annual percentage rate. A membership fee is not a triggering term nor need it be disclosed under 1026.16(b)(1)(iii) if it is required for participation in the plan whether or not an open-end credit feature is attached. 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. Reg Z Advertisement Trigger Terms Richard Insley: Richard Insley 10K Club Joined: Oct 2000 For example, an advertisement could not state no closing costs or we waive closing costs if consumers may be required to pay any closing costs, such as recordation fees. Any term required to be disclosed under 1026.6(a)(1) or (a)(2) set forth affirmatively or negatively in an advertisement for a home-equity plan subject to the requirements of 1026.40 triggers additional disclosures under this section. 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. (opens new page).) (C) The annual percentage rate for the loan. 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. Sep 17, 2020 By: Amanda L. Knudsen With more people interacting with financial institutions online, there is an opportunity for more online advertising. Rate in effect at the end of the promotional period. In variable-rate transactions, payments that will be determined based on application of an index and margin shall be disclosed based on a reasonably current index and margin. Misleading comparisons in advertisements. Membership fees for open-end (not home-secured) plans. 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. . 1026.11 Treatment of credit balances; account termination. References to payment terms include references to the draw period or any repayment period, to the length of the plan, to how the minimum payments are determined and to the timing of such payments. $1.74. Any social media communication in which a creditor advertises credit products must comply with Regulation Z's advertising provisions. What You'll Learn After completing this course, students will be able to: 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. (b) Clear and conspicuous standard. (5) Envelope excluded. (f) Disclosure of rates and payments in advertisements for credit secured by a dwelling(1) Scope. Membership fees. I, Comment 16-1. (2) The consumer should consult a tax adviser for further information regarding the deductibility of interest and charges. For a plan other than a variable-rate plan, if an advertised payment is calculated in the same way as other payments based on an assumed balance, the fact that the minimum payment could increase solely if the consumer made an additional draw does not make the payment a promotional payment. Advertising an overdraft program as a line of credit, unless the program actually falls under Regulation Z. (2) A catalog or other multiple-page advertisement or an electronic advertisement (such as an advertisement appearing on an Internet Web site) complies with paragraph (d)(2) of this section if the table or schedule of terms includes all appropriate disclosures for a representative scale of amounts up to the level of the more commonly sold higher-priced property or services offered. (ii) Any statement of the credit terms in paragraph (d)(1) of this section appearing anywhere else in the catalog or advertisement clearly refers to the page or location where the table or schedule begins. 1026.57. If such rate is variable, the annual percentage rate must comply with the accuracy standards in 1026.60(c)(2), 1026.60(d)(3), 1026.60(e)(4), or 1026.16(b)(1)(ii), as applicable. List of self-paced online course reviews and revision updates. (4) Stating the terms of the deferred interest or similar offer. 5. (ii) A statement, if applicable, that interest will be charged from the date the consumer incurs the balance or transaction subject to the deferred interest offer if the account is in default before the end of the deferred interest period. 1026.2 Definitions and rules of construction. . 1026.20 Disclosure requirements regarding post-consummation events. Prohibited acts or practices in advertisements for credit secured by a dwelling. If the promotional rate or promotional fee does not appear on the front side of the first page of a document, then the first listing of the promotional rate or promotional fee is the most prominent listing of the rate or fee on the subsequent pages of the document. (a) Actually available terms. (e) Catalogs or other multiple-page advertisements; electronic advertisements. Regulation Z, Section 1026.16(b) and (d) require additional disclosures if an advertisement mentions the following key terms: 1) "Any term required to be disclosed under . (iii) The amount of any payment. Deferred interest or similar offers also do not include 0% annual percentage rate offers where a consumer is not obligated under any circumstances for interest attributable to the time period the 0% annual percentage rate was in effect, though such offers may be considered promotional rates under 1026.16(g)(2)(i). If one of the statements is not listed on the principal promotional document or there is no principal promotional document, the first listing of one of these statements is the most prominent listing of the statement on the front side of the first page of each document containing one of these statements. If an electronic advertisement (such as an advertisement appearing on an Internet Web site) contains the table or schedule permitted under 1026.16(c)(1), any statement of terms set forth in 1026.6 appearing anywhere else in the advertisement must clearly direct the consumer to the location where the table or schedule begins. 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. (4) Envelope excluded. Module 1: Advertising and Marketing . Airplane*. 1026.36 Prohibited acts or practices and certain requirements for credit secured by a dwelling. i. Variable-rate plans. The advertisement need not include the end of an informal courtesy period in disclosing the deferred interest period under 1026.16(h)(3). The correct answer is D. A, B, and C are incorrect because they are not triggering terms under Reg Z's closed-end advertising rules. 'Regulation Z: Advertising Rules and Requirements' reviews the rules and requirements surrounding Regulation Z, including history, purpose, coverage, and disclosures. (5) Envelope excluded. The Truth in Lending Act (TILA), 15 U.S.C. First listing. If the listing of the promotional rate or promotional fee with the largest type size on the front side of the first page (or subsequent pages if the promotional rate or promotional fee is not listed on the front side of the first page) of the principal promotional document (or each document listing the promotional rate or promotional fee if the promotional rate or promotional fee is not listed on the principal promotional document or there is no principal promotional document) is used as the most prominent listing, it will be deemed to be the first listing. For example, fees to open the plan may be stated as a range. If an advertisement contains information (such as the payment terms) that triggers the duty under 1026.16(d) to state the annual percentage rate, the additional disclosures in 1026.16(b) must be provided in the advertisement. For purposes of 1026.16(g)(4) as it applies to written or electronic advertisements, the first listing of the promotional rate or promotional fee is the most prominent listing of the rate or fee on the front side of the first page of the principal promotional document. Using the word fixed to refer to rates, payments, or the credit transaction in an advertisement for variable-rate transactions or other transactions where the payment will increase, unless: (i) In the case of an advertisement solely for one or more variable-rate transactions, (A) The phrase Adjustable-Rate Mortgage, Variable-Rate Mortgage, or ARM appears in the advertisement before the first use of the word fixed and is at least as conspicuous as any use of the word fixed in the advertisement; and. (See comment 16(d)-4 regarding the use of a phrase such as no closing costs.) Similarly, if property insurance is required to open the plan, a creditor either may estimate the cost of the insurance or provide a statement that such insurance is required. 1. (B) Each use of the word fixed to refer to a rate or payment is accompanied by an equally prominent and closely proximate statement of the time period for which the rate or payment is fixed, and the fact that the rate may vary or the payment may increase after that period; (ii) In the case of an advertisement solely for non-variable-rate transactions where the payment will increase (e.g., a stepped-rate mortgage transaction with an initial lower payment), each use of the word fixed to refer to the payment is accompanied by an equally prominent and closely proximate statement of the time period for which the payment is fixed, and the fact that the payment will increase after that period; or. (b) Advertisement of terms that require additional disclosures. . Using the name of the consumer's current lender in an advertisement that is not sent by or on behalf of the consumer's current lender, unless the advertisement: (i) Discloses with equal prominence the name of the person or creditor making the advertisement; and. Regulation Z - New Advertising Rules for Open-end Credit Inclusion of a statement such as low fees, however, would not trigger the need to state additional information. Learn how to enroll, and get started. (B) Promotional payment. Regulation Z and TV and Radio Advertisements | NAFCU Equal prominence, close proximity. (ii) The consumer should consult a tax adviser for further information regarding the deductibility of interest and charges. ), which was enacted in 1968 as title I of the Consumer Credit Protection Act (Pub. Relation to other sections. Deferred interest means finance charges, accrued on balances or transactions, that a consumer is not obligated to pay or that will be waived or refunded to a consumer if those balances or transactions are paid in full by a specified date. Reg Z Advertisement Trigger Terms | For Bankers. From Bankers 1026.17 General disclosure requirements. 4. (2) Disclosure of rates(i) In general. Disclosure of rates and payments in advertisements for credit secured by a dwelling. 3. (ii) Any periodic rate used to compute the finance charge, expressed as an annual percentage rate as determined under 1026.14(b). Radio Advertising Disclosures | Bankers Online For example, if a creditor states no interest or no annual membership fee in an advertisement, additional information must be provided. (5) Misleading terms. Limitations on increasing annual percentage rates, fees, and charges. If the deferred interest offer is included in a written or electronic advertisement, the information in paragraphs (h)(4)(i) and (h)(4)(ii) of this section must also be stated in a prominent location closely proximate to the first statement of no interest, no payments, deferred interest, same as cash, or similar term regarding interest or payments during the deferred interest period. 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. If any of the terms required to be disclosed under 1026.6(a)(1) or (a)(2) or the payment terms of the plan are set forth, affirmatively or negatively, in an advertisement for a home-equity plan subject to the requirements of 1026.40, the advertisement also shall clearly and conspicuously set forth the following: (i) Any loan fee that is a percentage of the credit limit under the plan and an estimate of any other fees imposed for opening the plan, stated as a single dollar amount or a reasonable range. If an advertisement distributed in paper form or through the Internet (rather than by radio or television) is for a loan secured by the consumer's principal dwelling, and the advertisement states that the advertised extension of credit may exceed the fair market value of the dwelling, the advertisement shall clearly and conspicuously state that: (1) The interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and. If the annual percentage rate that will be in effect at the end of the promotional period (i.e., the post-promotional rate) is a variable rate, the post-promotional rate for purposes of 1026.16(g)(2)(i) is the rate that would have applied at the time the promotional rate was advertised if the promotional rate was not offered, consistent with the accuracy requirements in 1026.60(c)(2) and (e)(4), as applicable. For written or electronic advertisements, including the term introductory or intro in the same phrase as the listing of the introductory rate or introductory fee is deemed to be in immediate proximity of the listing. (i) Definitions. (3) Stating the deferred interest period. If the annual percentage rate may be increased after consummation, the advertisement shall state that fact. Electronic Code of Federal Regulations (e-CFR), CHAPTER XCONSUMER FINANCIAL PROTECTION BUREAU, PART 1026TRUTH IN LENDING (REGULATION Z). Reg Z Advertising | American Bankers Association 1026.43 Minimum standards for transactions secured by a dwelling. Deferred interest or similar offers clarified. Variable-rate plans. Statement accompanying toll free number. If the promotional rate or promotional fee does not appear on the front side of the first page of the principal promotional document, then the first listing of the promotional rate or promotional fee is the most prominent listing of the rate or fee on the subsequent pages of the principal promotional document. 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. 1026.34 Prohibited acts or practices in connection with high-cost mortgages. Truth in Lending Act (TILA)/Reg Z. Access your online courses through ABA's Learning Management System (LMS). (ii) Clear and conspicuous requirement. Statements such as Charge it - you won't be billed until May or You may skip your January payment are not in themselves triggering terms, since the timing for initial billing or for monthly payments are not terms required to be disclosed under 1026.6. If a deferred interest offer is advertised, the deferred interest period must be stated in a clear and conspicuous manner in the advertisement. Deferred interest period clarified. Electronic advertisement. 1. Preferred-rate provisions. 1026.60 Credit and charge card applications and solicitations. Regulation Z Truth in Lending Introduction Background and Summary The Truth in Lending Act (TILA), 15 USC 1601 et seq., was enacted on May 29, 1968, as title I of the Consumer Credit Protection Act (Pub. For example, an issuer may not advertise a very . (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 (b) of this section, it shall be considered a single advertisement if: See, 12 CFR Part 1026, Supp. PDF Regulation Z Advertising - Young & Associates, Inc. A creditor shall retain evidence of compliance with this part (other than advertising requirements under 1026.16 and 1026.24, and other than the requirements under 1026.19 (e) and (f)) for two years after the date disclosures are required to be made or action is required to be taken. 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. 2. Prominent location closely proximate. A promotional period means a period of time, less than the full term of the loan, that the promotional rate or promotional payment may be applicable. Regulation Z Advertising Management Practices | NAFCU 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. Therefore, if the periodic payment amount advertised is not a positive amount (e.g., No payments), the advertisement need not state the total of payments and the time period to repay the obligation. vii. 1026.41 Periodic statements for residential mortgage loans. 'Regulation Z: Advertising Rules and Requirements' reviews the rules and requirements surrounding Regulation Z, including history, purpose, coverage, and disclosures. (a) Actually available terms. (6) Misleading use of the term counselor. 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. Reach your brand mastery destination at the Bank Marketing Conference. (h) Deferred interest or similar offers . 6. Fees to open the plan. (h) Tax implications. 1026.32 Requirements for high-cost mortgages. If the deferred interest offer is included in a written or electronic advertisement, the deferred interest period and, if applicable, the term if paid in full must also be stated in immediate proximity to each statement of no interest, no payments, deferred interest, same as cash, or similar term regarding interest or payments during the deferred interest period.