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#2114697 - 01/19/17 03:40 PM Reg Z Advertisement Trigger Terms
swiggles Offline
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swiggles
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....wasn't sure whether to post this here because it hinges upon Regulation Z advertising requirements....or the Marketing Forum.

Anyway, I am looking at an advertisement for a lot loan. The marketing department wants to disclose the down payment percentage, thus triggering disclosures under 1026.24(d). So we will use an example. The commentary has the below guidance for an "example." What I am stuck on is that it says "examples for typical transactions." Our rates are tiered based on credit score. So do I choose a median rate example. I am betting the marketing department will want to use the lowest rate possible which is probably not attainable for most applicants. We also offer three different lengths of terms...for example 5 years....15 years. Do I have to include an example of each one?

5. Use of examples. A creditor may use illustrative credit transactions to make the necessary disclosures under §1026.24(d)(2). That is, where a range of possible combinations of credit terms is offered, the advertisement may use examples of typical transactions, so long as each example contains all of the applicable terms required by §1026.24(d). The examples must be labeled as such and must reflect representative credit terms made available by the creditor to present and prospective customers.
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#2114713 - 01/19/17 04:38 PM Re: Reg Z Advertisement Trigger Terms swiggles
rlcarey Offline
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Galveston, TX
Unless the bank owns the lots - see below:

24(d)(1) Triggering Terms

1. Downpayment. i. The dollar amount of a downpayment or a statement of the downpayment as a percentage of the price requires further information. By virtue of the definition of downpayment in §1026.2, this triggering term is limited to credit sale transactions.
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#2114736 - 01/19/17 06:03 PM Re: Reg Z Advertisement Trigger Terms swiggles
swiggles Offline
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swiggles
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OK....so if the down payment is not to the seller, where the seller is also the creditor, then it is not a trigger term???? Did I read that correctly?
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#2114739 - 01/19/17 06:07 PM Re: Reg Z Advertisement Trigger Terms swiggles
rlcarey Offline
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Galveston, TX
Yes - not a trigger unless a credit sale.
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#2114744 - 01/19/17 06:20 PM Re: Reg Z Advertisement Trigger Terms swiggles
swiggles Offline
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Glory hallelujah!!!
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#2114800 - 01/19/17 09:25 PM Re: Reg Z Advertisement Trigger Terms swiggles
Richard Insley Offline
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Toano, VA
Only applies when you're financing disposal of repos or foreclosures.
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#2114863 - 01/20/17 02:40 PM Re: Reg Z Advertisement Trigger Terms Richard Insley
swiggles Offline
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I found this 2014 Q&A from a very reliable source....not trying to argue....just looking for response.

Question: So then if you say the number of payments or period of repayment or amount of any payment; amount of any finance charge is a trigger term, you mean that is true regardless if "credit sale" or not?

Answer: If you mention any one of: 1) the number of payments or periods of repayment; 2) the amount of any payment; or, 3) the amount of any finance charge in an advertisement for a closed-end loan, you trigger the additional disclosures regardless of whether the loan being advertised is a "credit sale" (where the bank is both the seller and creditor - for example a car repo). If the closed-end loan being advertised is a credit sale situation, the additional disclosures are required if you mention any one of 1-3 above or the amount or percentage of any down payment.
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#2114866 - 01/20/17 02:43 PM Re: Reg Z Advertisement Trigger Terms swiggles
#12 Offline
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That Q&A says the same thing that Randy and Richard said.
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#2114873 - 01/20/17 02:55 PM Re: Reg Z Advertisement Trigger Terms Richard Insley
Richard Insley Offline
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Toano, VA
Maybe my comment is causing some confusion. Replacing the implied "it" might help:

(The rule requiring you to treat references to the 'downpayment' as a 'triggering term') only applies when you're financing disposal of repos or foreclosures.
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#2114919 - 01/20/17 03:59 PM Re: Reg Z Advertisement Trigger Terms swiggles
swiggles Offline
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swiggles
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OK....I feel stupid....I completely mis-read---mis-interpreted the answer to the question....sorry. I see now. Thanks everyone!!
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