OK, doesn't look like anyone else took the inititive so here is what I just emailed to the FDIC.
The stance the FDIC has taken that requires the amortization to be disclosed versus the loan term has caused quite a stir in the compliance industry and I have to admit that I agree with those that consider the interpretation to be in error.
In one area you are telling the consumer the term of their loan is for 30 years but in another area you are telling them they must pay the loan in full in 5 years. This is going to cause great confusion for the consumer. What do you tell them, is their loan for 30 years or 5 years?
It has well been an industry standard that the loan term was the period between consummation and the date the loan was due to be repaid. A Google search on "loan terms" will also produce several business definition of loan term concurring with that interpretation.
The following is the definition taken from: http://www.businessdictionary.com/definition/loan-term.html
Period over which a loan agreement is in force, and before or at the end of which the loan should either be repaid or negotiated for another term.
Also if you refer to the help section of the FFIEC rate spread calculator for the questions concerning loan term it will instruct you to input the "term" of the loan, not the amortization period. The following is taken from the Help section: http://www.ffiec.gov/ratespread/newcalchelp.aspx#9
If the amortization period of a loan is longer than the term of the loan – i.e., because the loan has a balloon feature- the lender should use the term when selecting the applicable yield. For example, in the case of a five-year loan that has a balloon payment because the payments are amortized over 30 years, the term of five years must be used.
This is also the interpretation that all major documentation software vendors have taken. In order to put in the "amortization" period in this category will cause major software changes and/or the manual completion of the GFE.
To the best of my knowledge the FDIC is the only one that is interpreting the loan term to mean the amortization period.
I would respectfully request the FDIC reconsider this interpretation.
I am also copying HUD in hopes that they might render an opinion on this matter.