5. 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. Application to variable-rate transactions. Specific credit terms. (2) Stating clearly and conspicuously the information required by paragraph (d)(2)(iii) of this section 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 additional cost information. Advertisements for home-equity plans are governed solely by the requirements in 1026.16, except 1026.16(g), and not by the closed-end advertising rules in 1026.24. 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. The principal promotional document is the document designed to be seen first by the consumer in a mailing, such as a cover letter or solicitation letter. 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. 2. 7. 5. 1026.9 Subsequent disclosure requirements. Other examples of terms that trigger additional disclosures are: i. 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. 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. Requirements for over-the-limit transactions. (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. (ii) Stating the promotional period and post-promotional rate or payments. Section 1026.16(d)(1)(i) requires a disclosure of any fees imposed by the creditor or a third party to open the plan. 1026.57 Reporting and marketing rules for college student open-end credit. (b) A registered mortgage loan originator shall provide his or her unique identifier to a consumer: (1) Upon request; (2) Before acting . 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. In my last blog post, I discussed advertising requirements under TISA and exemptions for certain media.Today, I will be examining Regulation Z advertising requirements and exemptions for television and radio advertisements. 8. 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. . In particular, under the Truth-In-Lending Act, "Regulation Z", it is clear that if any advertising or ad has any of the following "trigger" terms: The amount or percentage of any down payment, or The number of payments or period of repayment, or The amount of any payment, or The amount of any finance charge 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. ), which was enacted in 1968 as title I of the Consumer Credit Protection Act (Pub. . Our company has Advertising Quick Hits learning Guides available as well as a self-study six week E-Course that will help your team member, or you, become more skilled at becoming an Advertising Compliance Officer for your company. Federal Register :: Mortgage Acts and Practices-Advertising Rule Mortgage Acts and Practices-Advertising A Rule by the Federal Trade Commission on 07/22/2011 Document Details Printed version: PDF Publication Date: 07/22/2011 Agency: Federal Trade Commission Dates: This final rule is effective August 19, 2011. (ii) Clear and conspicuous requirement. 1026.11 Treatment of credit balances; account termination. 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. January 1, 2023. 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. (5) Envelope excluded. ABA's Community Commitment Awards recognize banks that go above and beyond for their customers and communities. 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. Sep 17, 2020 By: Amanda L. Knudsen With more people interacting with financial institutions online, there is an opportunity for more online advertising. (3) Misrepresentations about government endorsement. See interpretation of 16(b) Advertisement of Terms That Require Additional Disclosures in Supplement I. Section 1026.16(d)(6) requires additional disclosures for promotional rates or payments. An advertisement that states that any interest expense incurred under the home-equity plan is or may be tax deductible may not be misleading in this regard. (i) Prohibited acts or practices in advertisements for credit secured by a dwelling. Reach your brand mastery destination at the Bank Marketing Conference. (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: 1. $1.74. 2. Want to Enroll Your Bank in ABA Frontline Compliance? See, 12 CFR Part 1026, Supp. 1026.20 Disclosure requirements regarding post-consummation events. (ii) Includes a clear and conspicuous statement that the person making the advertisement is not associated with, or acting on behalf of, the consumer's current lender. Variable-rate plans. Today, I will be examining Regulation Z advertising requirements and exemptions for television and radio advertisements. 1026.24 Advertising. | Consumer Financial Protection Bureau (ii) Application to variable-rate transactions. 1026.40 Requirements for home equity plans. (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. Reporting and marketing rules for college student open-end credit. PDF Regulation Z Truth in Lending - Federal Reserve Board 1. 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. Appendix A to Part 1026 Effect on State Laws, Appendix B to Part 1026 State Exemptions, Appendix C to Part 1026 Issuance of Official Interpretations, Appendix D to Part 1026 Multiple Advance Construction Loans, Appendix E to Part 1026 Rules for Card Issuers That Bill on a Transaction-by-Transaction Basis, Appendix F to Part 1026 Optional Annual Percentage Rate Computations for Creditors Offering Open-End Credit Plans Secured by a Consumer's Dwelling, Appendix G to Part 1026 Open-End Model Forms and Clauses, Appendix H to Part 1026 Closed-End Model Forms and Clauses, Appendix J to Part 1026 Annual Percentage Rate Computations for Closed-End Credit Transactions, Appendix K to Part 1026 Total Annual Loan Cost Rate Computations for Reverse Mortgage Transactions, Appendix L to Part 1026 Assumed Loan Periods for Computations of Total Annual Loan Cost Rates, Appendix M1 to Part 1026 Repayment Disclosures, Appendix M2 to Part 1026 Sample Calculations of Repayment Disclosures, Appendix N to Part 1026 Higher-Priced Mortgage Loan Appraisal Safe Harbor Review, Appendix O to Part 1026 Illustrative Written Source Documents for Higher-Priced Mortgage Loan Appraisal Rules, Comment for 1026.1 - Authority, Purpose, Coverage, Organization, Enforcement and Liability, Comment for 1026.2 - Definitions and Rules of Construction, Comment for 1026.5 - General Disclosure Requirements, Comment for 1026.6 - Account-Opening Disclosures, Comment for 1026.8 - Identifying Transactions on Periodic Statements, Comment for 1026.9 - Subsequent Disclosure Requirements, Comment for 1026.11 - Treatment of Credit Balances; Account Termination, Comment for 1026.12 - Special Credit Card Provisions, Comment for 1026.13 - Billing Error Resolution, Comment for 1026.14 - Determination of Annual Percentage Rate, Comment for 1026.15 - Right of Rescission, Comment for 1026.17 - General Disclosure Requirements, Comment for 1026.18 - Content of Disclosures, Comment for 1026.19 - Certain Mortgage and Variable-Rate Transactions, Comment for 1026.20 Disclosure Requirements Regarding Post-Consummation Events, Comment for 1026.21 - Treatment of Credit Balances, Comment for 1026.22 - Determination of Annual Percentage Rate, Comment for 1026.23 - Right of Rescission, Comment for 1026.26 - Use of Annual Percentage Rate in Oral Disclosures, Comment for 1026.27 - Language of Disclosures, Comment for 1026.28 - Effect on State Laws, Comment for 1026.30 - Limitation on Rates, Comment for 1026.32 - Requirements for High-Cost Mortgages, Comment for 1026.33 - Requirements for Reverse Mortgages, Comment for 1026.34 - Prohibited Acts or Practices in Connection With High-Cost Mortgages, Comment for 1026.35 - Requirements for Higher-Priced Mortgage Loans, Comment for 1026.36 - Prohibited Acts or Practices and Certain Requirements for Credit Secured by a Dwelling, Comment for 1026.37 - Content of Disclosures for Certain Mortgage Transactions (Loan Estimate), Comment for 1026.38 - Content of Disclosures for Certain Mortgage Transactions (Closing Disclosure), Comment for 1026.39 - Mortgage Transfer Disclosures, Comment for 1026.40 - Requirements for Home-Equity Plans, Comment for 1026.41 - Periodic Statements for Residential Mortgage Loans, Comment for 1026.42 - Valuation Independence, Comment for 1026.43 - Minimum Standards for Transactions Secured by a Dwelling, Comment for 1026.46 - Special Disclosure Requirements for Private Education Loans, Comment for 1026.47 - Content of Disclosures, Comment for 1026.48 - Limitations on Private Education Loans, Comment for 1026.52 - Limitations on Fees, Comment for 1026.53 - Allocation of Payments, Comment for 1026.54 - Limitations on the Imposition of Finance Charges, Comment for 1026.55 - Limitations on Increasing Annual Percentage Rates, Fees, and Charges, Comment for 1026.56 - Requirements for Over-the-Limit Transactions, Comment for 1026.57 - Reporting and Marketing Rules for College Student Open-End Credit, Comment for 1026.58 - Internet Posting of Credit Card Agreements, Comment for 1026.59 - Reevaluation of Rate Increases, Comment for 1026.60 - Credit and Charge Card Applications and Solicitations, Comment for 1026.61 - Hybrid Prepaid-Credit Cards, Comment for Appendix A - Effect on State Laws, Comment for Appendix B - State Exemptions, Comment for Appendix C - Issuance of Official Interpretations, Comment for Appendix D - Multiple-Advance Construction Loans, Comment for Appendix F - Optional Annual Percentage Rate Computations for Creditors Offering Open-End Credit Plans Secured by a Consumer's Dwelling, Comment for Appendix G - Open-End Model Forms and Clauses, Appendices G and H - Open-End and Closed-End Model Forms and Clauses, Comment for Appendix H - Closed-End Forms and Clauses, Comment for Appendix J - Annual Percentage Rate Computations for Closed-End Credit Transactions, Comment for Appendix K - Total Annual Loan Cost Rate Computations for Reverse Mortgage Transactions, Comment for Appendix L - Assumed Loan Periods for Computations of Total Annual Loan Cost Rates, Comment for Appendix O - Illustrative Written Source Documents for Higher-Priced Mortgage Loan Appraisal Rules. 2014 CFPB Dodd-Frank Mortgage Rules Readiness Guide. (See comment 6(a)(2)-1 and 1026.6(b)(3)(iii)(B).). 1026.48 Limitations on private education loans. 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. An ABA Frontline Compliance Training Course Free to Participating ABA Member Banks. (ii) Clear and conspicuous requirement. No interest rate changes will affect the account; iv. Amounts and time periods of payments. (1) Scope. Online advertising can be an effective way to communicate quickly with current customers and members and also potential customers and members. If an advertisement contains a statement of any minimum periodic payment and a balloon payment may result if only the minimum periodic payments are made, even if such a payment is uncertain or unlikely, the advertisement also shall state with equal prominence and in close proximity to the minimum periodic payment statement that a balloon payment may result, if applicable. Truth in Lending Act (TILA)/Reg Z. (2) Definitions. Misleading comparisons in advertisements. 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. 1026.57. Information required to be disclosed in 1026.16(d)(6)(ii) that is immediately next to or directly above or below the promotional rate or payment (but not in a footnote) is deemed to be closely proximate to the listing. 1026.1 Authority, purpose, coverage, organization, enforcement, and liability. 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. Understand the compliance issues and risks around advertising with Regulation Z. 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. This section may require disclosure of several payment amounts, including any balloon payment. eCFR :: 12 CFR 1026.24 -- Advertising. 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. 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. (iii) The amount of any payment. PDF Truth in Lending Act (Regulation Z) - NCUA Explore guides to help you plan for big financial goals, Subpart B - Open-End Credit 1026.51026.16, Subpart C - Closed-End Credit 1026.171026.24, Subpart D - Miscellaneous 1026.251026.30, Subpart E - Special Rules for Certain Home Mortgage Transactions 1026.311026.45, Subpart F - Special Rules for Private Education Loans 1026.461026.48, Subpart G - Special Rules Applicable to Credit Card Accounts and Open-End Credit Offered to College Students 1026.511026.61, Supplement I to Part 1026 - Official Interpretations, Official interpretation of 16(a) Actually Available Terms, Official interpretation of 16(b) Advertisement of Terms That Require Additional Disclosures, Official interpretation of Paragraph 16(b)(1), Official interpretation of Paragraph 16(b)(2), Official interpretation of 16(c) Catalogs or Other Multiple-Page Advertisements; Electronic Advertisements, Official interpretation of Paragraph 16(c)(1), Official interpretation of Paragraph 16(c)(2), Official interpretation of 16(d) Additional Requirements for Home-Equity Plans, Official interpretation of 16(e) Alternative Disclosures - Television or Radio Advertisements, Official interpretation of 16(g) Promotional Rates and Fees, Official interpretation of 16(h) Deferred Interest or Similar Offers. 12 CFR Part 1026 - Truth in Lending (Regulation Z) Most recently amended Jan. 1, 2023 Regulation Z protects people when they use consumer credit. Goods or services are delivered on a single date; and. (2) The consumer should consult a tax adviser for further information regarding the deductibility of interest and charges. If the advertisement is for a variable-rate transaction, and the advertised payment or simple annual rate is based on the index and margin that will be used to make subsequent rate or payment adjustments over the term of the loan, the advertisement includes an equally prominent statement in close proximity to the payment or rate that the payment or rate is subject to adjustment and the time period when the first adjustment will occur. (4) Stating the terms of the deferred interest or similar offer. (4) Tax implications. This two-hour webinar reviews the new rules in depth and places the changes in context of the existing Regulation Z advertising requirements. However, a statement such as No interest charges until May or any other statement regarding when interest or finance charges begin to accrue is a triggering term, whether appearing alone or in conjunction with a description of a deferred billing or deferred payment program such as the examples above. 1026.22 Determination of annual percentage rate. See interpretation of 16(a) Actually Available Terms in Supplement I. If the annual percentage rate may be increased after consummation, the advertisement shall state that fact. Radio Advertising Disclosures | Bankers Online (5) Misleading claims of debt elimination. Electronic advertisement. 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. (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. 1026.8 Identifying transactions on periodic statements. Catalogs or other multiple-page advertisements; electronic advertisements. Truth in Lending Act (TILA/Reg Z) Social Media Guidance - ActiveComply Allocation of payments. Prohibited acts or practices in advertisements for credit secured by a dwelling. (h) Deferred interest or similar offers . Negative as well as affirmative references trigger the requirement for additional information. 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). 1026.55 Limitations on increasing annual percentage rates, fees, and charges. Only positive periodic payment amounts trigger the additional disclosures under 1026.16(b)(2). (a) Actually available terms. No other balances are currently carried or will be carried on the account; v. No taxes or ancillary charges are or will be added to the obligation; vi. 1026.56 Requirements for over-the-limit transactions. Misleading use of the current lender's name. (c) Catalogs or other multiple-page advertisements; electronic advertisements. For example, a term triggering additional disclosures may be accompanied by a link that directly takes the consumer to the additional information. (ii) Any periodic rate that may be applied expressed as an annual percentage rate as determined under 1026.14(b). 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." . Trigger terms. Stay informed with free email bulletins, driven by policy experts, with unique content based on your preferences. 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. 1026.25 Record retention. | Consumer Financial Protection Bureau 2. 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. Although the terms of an advertised deferred interest or similar offer may provide that a creditor may charge the accrued interest if the balance is not paid in full by a certain date, creditors sometimes have an informal policy or practice that delays charging the accrued interest for payment received a brief period of time after the date upon which a creditor has the contractual right to charge the accrued interest. Inapplicability of closed-end rules. (2) Misleading comparisons in advertisements. 9. (3) Balloon payment. Misrepresentations about government endorsement. Deferred interest or similar offers also do not include skip payment programs that have no required minimum payment for one or more billing cycles but where interest continues to accrue and is imposed during that period. Advertising an overdraft program as a line of credit, unless the program actually falls under Regulation Z. 1026.54 Limitations on the imposition of finance charges. The MinBanc program reimburses training costs for minority- and women-owned banks, including training with ABA. The additional requirement in 1026.16(b)(1)(ii) to disclose the variable-rate feature may be satisfied by disclosing that the annual percentage rate may vary or a similar statement, but the advertisement need not include the information required by 1026.6(a)(1)(ii) or (b)(4)(ii). 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. Information disclosed in a footnote is not considered in a prominent location closely proximate to the statement. Regulation Z and TV and Radio Advertisements | NAFCU 1026.21 Treatment of credit balances. These rules do not vary by media. Reg Z Advertisement Trigger Terms Richard Insley: Richard Insley 10K Club Joined: Oct 2000 1601 (opens new window) (You will be leaving NCUA.gov and accessing a non-NCUA website. For example, a creditor may not advertise a very low annual percentage rate that will not in fact be available at any time. 4. 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. 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 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. Post-promotional rate depends on consumer's creditworthiness. Comment for 1026.24 - Advertising - Consumer Financial Protection Bureau Making any comparison in an advertisement between actual or hypothetical credit payments or rates and any payment or simple annual rate that will be available under the advertised product for a period less than the full term of the loan, unless: (i) In general. This course is part of ABA Frontline Compliance Training, free to ABA member banks. For example, fees to open the plan may be stated as a range. (i) The amount or percentage of any down payment. In disclosing the annual percentage rate in an advertisement for a variable-rate plan, as required by 1026.16(b)(1)(ii), the creditor may use an insert showing the current rate; or may give the rate as of a specified recent date.

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