I work for an in-store branch of a commercial bank. Do I have to disclose the APR when simply advertising our auto or real estate rates? Our compliance officer says "yes". However, it was my understanding that the APR must be disclosed while PROCESSING a particular loan (before closing..although I don't know exactly when). Please advise .

Follow your COs instruction.

§226.26 Use of annual percentage rate in oral disclosures.
(b) Closed-end credit. In an oral response to a consumer’s inquiry about the cost of closed-end credit, only the annual percentage rate shall be stated, except that a simple annual rate or periodic rate also may be stated if it is applied to an unpaid balance. If the annual percentage rate cannot be determined in advance, the annual percentage rate for a sample transaction shall be stated, and other cost information for the consumer’s specific transaction may be given.

I should have been more specific. I have a dry-erase board and wish to advertise our rates (to our target market as opposed to an individual). This is a written advertisement and not oral. Same rules apply?

226.24

(b) Advertisement of rate of finance charge. If an advertisement states a rate of finance charge, it shall state the rate as an "annual percentage rate," using that term. If the annual percentage rate may be increased after consummation, the advertisement shall state that fact. The advertisement shall not state any other rate, except that a simple annual rate or periodic rate that is applied to an unpaid balance may be stated in conjunction with, but not more conspicuously than, the annual percentage rate.

Your CO is still correct, per Robert's cite. Tell him/her, "good job" and that you have confidence in them.

...and don't forget payment schedules to go along with those APRs if you should be quoting your rates as "30 yr. mortgages" or "60 month auto loans."

Thank you for the info. Let us get even more specific, if you please. Suppose I disclose an interest rate along with the calculated APR. Are there specifics in terms of HOW this APR is calculated? (BTW, to which reg does this apply?) For example, I can calculate it for the first year OR I can amortize it for the full term, just like the interest, which, in turn, will make the APR lower. Am I over-obssessing or could there be a violation if not stated correctly?

Of course it matters how you calculate the APR - otherwise, what would be the point of disclosing one? It is calculated exactly the same way you do it for an actual loan. Include the interest rate you are advertising plus all other fees and terms that would apply for the deal you are advertising.

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Am I over-obssessing or could there be a violation if not stated correctly?

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You are wise to "over-obsess" in many of these matters. While you could get a lot of info here on trigger terms, what can and cannot be predominant in the ad, use of examples, etc. I would route your question to your compliance officer. This is likely part of their job and they'll appreciate knowing they have an employee/officer taking an interest in doing it right. They can provide the explanations and guidance of how and why you do what you do.

We use dry erase boards regularly in branches. After having me explain the requirements for "Member FDIC" a few times, and thanking them when I did see it, they decided to just put stickers in the corner with that. This is fine since we don't offer products where this would not be appropriate. While newsprint ads may be reviewed by compliance, the boards in banks can be more difficult for many reasons, yet you want to sell there.

When you state one thing, you may have to state others, there are some things you can't say on these ads and you have to watch how you do say them. Get the guidance from your CO so it can always be compliant.

ADDED: This is under Reg. Z, Truth in Lending. There are very specific formulas for calculating APRs and rules for advertising. You can get to the cites above and all of Reg. Z by looking near the top of the boards at the "Click to read a reg" link.

Like APYs on the deposit side, the rules are intended to allow a consumer to compare apples to apples as they shop for the best deal. That is why there is some standardizations in this. While "Z" is the key component, there are also unfair and deceptive practices to consider and possibly state laws.