Does anyone have any references to good resources to use for wording disclosures in advertising of loan products? (we are working an ARM product right now that I am finding to be very challening). I'm using Reg. Z (of course) plus the FTC Guide on How to Advertise Consumer Credit. Is there anything else that will help? (maybe something with more complex examples)

Look to see what the competition is doing and brainstorm with other Compliance Professionals. The real problems in advertising are "bait and switch" and "unfair or deceptive practices" and both of those are vague concepts.

Thanks Al! Yes, I've looked to the others to see what they are advertising, and I want to be very careful. I'm concerned because it looks like we are going to have a discounted rate for the first year (with caps on % of increase) - I can't tell if that is what the competitors are doing, and I read Reg. Z as having special disclosures for that, and a requirement of a blended rate APR disclosure, but RE disagrees based upon competitors ads.

Call the competitor and pretend you are a typical uninformed consumer and ask about how the initial rate is determined [usually an index + a margin - a discount (or + a premium) and rounded to the nearest 0.125%]. Ask about rate change caps [is it 6-2-6 or 2-2-6]. Then you can compare apples to apples. Give me a call if you want to discuss it [(510) 790-5825].

Al, you are a life-saver! Thanks for all of your help!

Also be sure to note Section 226.24's "triggering term" principle--if you mention one of the magic words in your ad (like "30 year term", for example), then you must give the APR and repayment schedule for a representative example. Combined with the "bait & switch" prohibition Al mentioned, you find yourself obligated to calculate & quote the stepped payment schedule for a premium or discount ARM that is actually available when the ad is running.